LLC & PLLC registration checklist for private practices
If you're figuring out how to start a private practice on the side, this guide walks you through the essentials, from legal setup to your first referrals. SimplePractice teamed up with successful private practitioners to create it.
A private practice involves more than seeing clients. You'll need to find clients, choose practice management software, market your practice, and more. Download the free "How to Start a Private Practice on the Side" eBook to learn what it takes to get started.
What are the first steps?
When starting a private practice therapy business, begin with the essentials. To see clients in your new therapy practice legally, ethically, and functionally, put these foundations in place:
Business name, structure, business license, and clinical license
Business phone number
Business bank account
Professional website
Can your employer block a side practice?
Your employer can potentially block you from starting a private practice therapy business on the side, so read your employment contract before you launch. Some non-compete clauses bar you from working for a competing employer while you're still employed there, and that can include your own private practice. Others restrict where you can practice after you leave, and non-solicitation clauses can limit marketing to your employer's clients and contacts.
Enforceability varies by state, and clause language differs widely. If anything is unclear, have an employment attorney review it. SimplePractice's guide to non-compete clauses for therapists explains the main types.
Why does networking matter in private practice?
Learning how to start a private practice on the side can feel lonely, so a community you can turn to for support and guidance matters.
You can learn a lot about how to start a private practice from other entrepreneurs. Joining an entrepreneur group or seeking private practice consulting gives you support and accountability. A like-minded community to commiserate with can also be comforting in the early stages.
You don't need to limit networking to owners in your own field. A group with many kinds of private practice professionals offers tips on running a business from different perspectives. It can also open referral relationships with speech-language pathologists (SLPs), occupational therapists (OTs), psychiatrists, and psychiatric mental health nurse practitioners (PMHNPs).
What does it cost to start?
When you're thinking about how to start a private practice on the side, startup cost is often one of the first things that comes to mind.
Costs to start a private practice may include legal or accounting fees, business entity setup fees, EHR fees, website fees, and marketing fees. They vary with your location, whether you choose an office or telehealth, and the services you offer. Estimate what you'll spend before you start earning income.
How do you find your ideal clients?
Another step in starting a private practice on the side is deciding who your ideal clients are. It's easy to feel pressured to fill your schedule right away, but taking on every client can backfire.
Finding clients isn't only about clients choosing you. You also choose the people best suited to your style of care. When you're not the right fit, it can mean extra work, poor results, and bad reviews for your new therapy practice.
To avoid those pitfalls when starting a private practice on the side, create an authentic therapy brand that reflects the clients you want to attract.
If you're not sure which niche fits, think about every client you've worked with: in rotations, at previous jobs, and currently, plus the ones you loved helping.
Where should you see clients?
After you've determined your ideal client, the next step in starting a private practice on the side is choosing your practice setting. Your options include clients' homes, your home, a traditional office, or telehealth. Consider how each space fits your business and therapeutic techniques.
For telehealth, use a secure, HIPAA-compliant platform with the features you need, such as a virtual whiteboard to engage clients and background customization for privacy.
For an in-person office, weigh the cost of leasing or renting, and make sure the space is accessible, HIPAA-compliant, and well located. Decor and artwork can make it inviting and calming for clients.
Should you accept health insurance?
Another question when you're learning how to start a private practice on the side is whether to join an insurance payer panel. There's no one right way to bill clients. Consider the makeup of your community and what your competitors do when weighing insurance vs. private pay.
Because insurers list in-network providers in their directories, joining a panel can put your practice in front of more potential clients and may reduce how much marketing for your therapy practice you need to do on your own.
How long does credentialing take?
Joining a panel doesn't happen overnight. Credentialing typically takes 60 to 120 days per insurance company, according to SimplePractice's guide on how long credentialing takes.
When starting a new private practice therapy business, build that timeline into your budget before you count on insurance income. The free insurance credentialing checklist can help you stay organized.
How do you choose an EHR solution?
Once the fundamentals for how to start a private practice therapy business are in place and you're ready to see clients, choose an EHR solution. An EHR can help you manage your time and cut down on administrative work.
As you compare EHR solution options, ask:
Can new and existing clients request appointments online?
Can you automate appointment reminders to reduce no-shows and cancellations?
Do you want a secure messaging system to communicate with clients?
Can you customize paperwork, documents, progress notes, and templates?
Is billing and insurance claim filing integrated into the system?
Does the EHR have a mobile app that lets you access your schedule on the go?
Is email, video, or chat support available if you have questions?
How do you market your practice?
You'll likely need to market your practice, whatever stage you're at in learning how to start a private practice on the side, and you have several tactics to choose from.
First, ask yourself: are you an introvert or an extrovert?
Introverts often work better one-on-one, so a good first step is listing local professionals who work with your ideal client. Email each one to introduce yourself and invite them to meet and share their experience and practice. This builds your network, can bring client referrals, and may earn you advice on how to start a private practice therapy business.
If you're more of an extrovert, still reach out to individuals in your area, and consider giving lectures or hosting meet-ups for local professionals.
Social media is another option. An active online presence can increase your visibility with potential clients, build trust and loyalty, and improve client retention.
How do you grow a therapy practice?
Once you've learned how to start a private practice on the side for mental health, you may consider going full-time or hiring staff. First, take a close look at your budget and make sure you're meeting your goals. Private practice consulting can give you an outside view of your numbers before you decide.
Growth takes time, but working through these steps can help you make the transition smoothly. Download the free eBook to learn more about how to start a private practice on the side.
How SimplePractice streamlines running your practice
SimplePractice is HIPAA-compliant practice management software with everything you need to run your practice built into the platform—from booking and scheduling to insurance and client billing.
If you’ve been considering switching to an EHR system, SimplePractice empowers you to streamline appointment bookings, reminders, and rescheduling and simplify the billing and coding process—so you get more time for the things that matter most to you.
Try SimplePractice free for 30 days. No credit card required.
