How to Start, Grow, and Manage a Private Therapy Practice: 4
Your Service Offerings & Pricing
You’ve decided you want to bite the bullet and start a practice – congrats! Now you’re likely wondering how many clients you need to see and how much to charge to be profitable. Before we go there, let’s talk about your niche and why it’s important to your business strategy.
Determining your niche
Figuring out the exact population you would like to work with makes you more attractive to clients because it shows that you have something special to offer. Most individuals looking for a therapist don’t care about (or understand) CBT vs EMDR. They want to connect with a counselor that can help someone exactly like them tackle the issues they are facing. Take some time to get specific about the type of clients you would like to work with. This will not only make your work more enjoyable, but help you stand out from other therapists. The list of specific niches is endless but here are a few examples:
Parents of children dealing with OCD
Adult children of divorced parents
College students facing the stress of school and planning their future
Cancer survivors
Childhood trauma survivors
Military kids and families
Offering therapy sessions in the evening or on weekends
Pro Tip: Ask around to discover what offerings are missing in your local market. Owning one of these gaps as your niche is a surefire way to set you apart and help fill your schedule in the beginning. Don’t worry – your niche can continue to evolve throughout your career as you identify your passions and long-term goals.
How to figure out what to charge
The exact rate to charge clients your first year is….ha! You think there is a magic number? Of course not. Start by asking yourself some important business, practical, and philosophical questions:
How much do you need to make each month to cover business and personal expenses? Do the math first. Your baseline will help determine your rate and number of clients.
Do you plan to offer pro-bono or sliding scale fees? If so, this needs to be factored into the price of full-paying clients.
Will you accept insurance? Insurance companies dictate what you can charge clients. This contracted rate may be lower than you planned and will influence your fee for clients that pay out of pocket. To understand the complicated world of deductibles, reimbursement, and comparing plans, check out the therapist’s guide to working with insurance.
Pros of insurance: You tend to fill up fast due to referrals from insurance companies.
Cons of insurance: Once you’re on an insurance panel it becomes hard to get off, billable rates are typically lower than what you can charge out of pocket, and it results in much more paperwork.
What are your personal goals? Outline how many hours you’d like to work each week, when you’d like to retire, and how much you’d like to have in savings. Defining clear objectives will always help you make the best decisions for how to run your practice.
How many clients can you handle?
Figuring out the size of your caseload is very subjective and depends on your work-life balance, energy, and financial goals. Some therapists thrive with a full schedule and are energized by seeing 40 clients per week. Others do better work and feel more fulfilled by averaging 15-20 clients per week and taking adequate time for themselves.
When you’re building your private practice, don’t be afraid to start slow. The last thing you want is to get burnt out a few months into your new venture. Decide how much money you need to make and work backwards. Remember that for every client you see there will be additional time spent on notes, paperwork, and billing. For instance, if your goal is to see 25 clients each week, expect about 10 additional hours of admin work, resulting in a 35-40 hour workweek.
Consider your own unique preferences and internal clock when determining your work schedule. Are you an early riser or a night owl? Do you mind working on the weekend? Offering non-traditional hours that accommodate your personal well-being may align with certain clients and be a win-win for securing extra hours.
Pro Tip: Plan for a 20% cancellation rate when calculating your hours and profitability. Clients may have to travel for work, honor family commitments, and tend to unexpected life events.
