Career Center

When San Diego psychologist Anabel Bejarano, PhD, launched her part-time private practice in 2001, she didn't have much formal business training to draw on. Often, she just had to wing it.

"Even though you may not feel empowered to be a business owner at the beginning, you need almost to pretend it to yourself," says Bejarano, an assistant clinical professor and staff psychologist at Children's Hospital in San Diego. "You have to change your mindset from clinician to business-owner."

Like Bejarano, most graduate students still don't get much training in the business of practice. But that doesn't mean they have to go it alone. Experienced practitioners can offer newcomers advice on everything from business plans to office space to marketing. One theme underlies all their advice: Be prepared.


Begin by assessing yourself, suggests Melba Vasquez, PhD, an independent practitioner in Austin, Texas, and co-author with Kenneth Pope, PhD, of "How to Survive and Thrive as a Therapist: Information, Ideas and Resources for Psychologists in Practice" (APA, 2005).

What kind of work do you want to do? Can you handle solitude? What unique services can you offer to make yourself stand out? What's your financial situation-and your tolerance for uncertainty and risk?

"You need to know whether you can tolerate the ebb and flow of income," emphasizes Vasquez.

Next, create a business plan. Neglecting to think through details ahead of time is a common mistake, says Holly A. Hunt, PhD, a private practitioner in Long Beach, Calif., and author of "Essentials of Private Practice: Streamlining Costs, Procedures and Policies for Less Stress" (Norton, 2005).

The most important step, says Hunt, is to estimate income and all initial and recurring expenses, everything from the business cards and magazine subscriptions to the big-ticket items like rent and insurance.

"Many people get in trouble because they just don't think about these things," says Hunt, adding that the consequences can range from worrying to going out of business. "People often think big. They get a big office, furnish it with the best stuff and assume that clients will just come and cover everything." All too often, say Hunt and other practitioners, new practitioners underestimate expenses and overestimate the speed with which their clients will come.

To avoid that problem, Hunt suggests creating a business plan that includes various scenarios.

"One of the best things you can do-and which people so often don't do-is to estimate your practice expenses in different arrangements and then choose what you can afford," she explains. That way you can make informed decisions about such issues as whether to plunge into full-time private practice or take a more gradual approach, whether to lease a solo office or sublet and whether to accept insurance and join managed-care panels or limit your practice to clients who can pay out of pocket. Once your practice starts to grow, she adds, you can shift to a more appealing option.

Easing into independent practice is one route to consider, says Hunt. Many solo practitioners, she points out, start out with full- or part-time jobs that provide steady income as they build their private practices on the side.


Next, roll up your sleeves and start making your dream a reality. According to experienced practitioners, your to-do list should include the following:

  • Find an office. Choose an environment that reflects your practice and makes it easy for clients to get to you. If you're hoping to attract corporate clients, an office in a downtown high-rise facilitates lunch-hour and after-work appointments. If you're planning a family therapy practice, consider a suburban location that parents can easily find. In any event, make sure your office is safe, properly soundproofed and accessible to clients with disabilities. A location near public transportation or freeway interchanges can be ideal.

  • Build a team. As an independent practitioner, you'll have to manage your own taxes, personnel issues, computer crises and the like. But you don't have to tackle everything yourself. An accountant can explain the quarterly estimated taxes you'll have to pay as a self-employed person, for instance. An attorney can review leases and other contracts. You may also need a bookkeeper. Professional psychological associations can often refer you to those specializing in independent psychology practices and may even offer discounts.

  • Identify colleagues. Become active in local, state, regional and national psychological associations, plus APA's Div. 42 (Independent Practice). Networking helps you overcome isolation and gives you peers who can provide mentoring, consultation and referrals, says Vasquez.

  • Establish policies and procedures. Be upfront with your clients about your phone, cancellation and collection policies. Such policies can save you time, protect your bottom line and even enhance therapy by modeling responsible behavior, says Hunt, who believes so strongly in the power of policies and procedures that she devoted the last third of her book to the topic.

  • Follow professional guidelines, laws and regulations. In addition to the APA Ethics Code, you also need to familiarize yourself with local, state and federal laws and regulations, says David W. Nickelson, PsyD, JD, assistant executive director of technology policy and projects in APA's Practice Directorate.

"HIPAA-the Health Insurance Portability and Accountability Act-is an important one," says Nickelson. "HIPAA's privacy rule gives patients particular rights about who can see and use their information. Its security rule requires practitioners who keep health-care information in any kind of electronic format to take steps to ensure their office, computers and administrative policies and procedures work together to safeguard and prevent unauthorized access to electronic health-care information." For example, he says, the rule requires psychologists to password protect their computer systems and backup electronic patient files and data.

APA's, which is free to practice-oriented graduate students and practitioners who pay the APA Practice Assessment, offers tools to help ensure you're HIPAA-compliant, plus many other resources to start and build a successful practice.

  • Get covered. You'll need malpractice, liability and property insurance, independent practitioners note.

  • Take care of yourself. "Independent practice can be very isolating," says Vasquez. Prevent burnout by exercising, eating right and seeking out support from peers and others.

  • Make a professional will. Identify a colleague or two willing to take on your clients and office affairs in case you become disabled or die, say veteran practitioners.


Once you've got everything in place, let potential clients and referral sources know you're seeking clients.

Develop a "sound-bite" about yourself, recommends Rosalind S. Dorlen, PsyD, a private practitioner in Summit, N.J., who offers workshops on launching practices to PsyD students at Rutgers.

"If you light a match," she says, "you should be able to explain what you do before you burn your fingers." A specialized niche can help referral sources see you as the go-to psychologist in that area, she adds.

Then, take that message to the world, says David W. Ballard, PsyD, assistant executive director for corporate relations and business strategy in APA's Practice Directorate. Send out announcements about your new practice. Invite colleagues, physicians, attorneys and other potential referral sources to lunch or open houses. Get business cards. Develop a brochure. Create a Web site or list your practice on online therapist locator services. Give free talks to community groups, using press releases to announce them. Write letters to the editor or editorials in the local newspaper on topics in your area of expertise. If you decide to accept insurance, identify and learn about joining the better managed-care organizations. Network with colleagues and other professionals who might good referral sources.

Don't think of it as salesmanship, says Ballard, who also holds an MBA. "Marketing is really about building relationships and informing potential clients and referral sources about services that might meet their needs," he says.

Rebecca A. Clay is a writer in Washington, D.C.

All too often, say Hunt and other practitioners, new practitioners underestimate expenses and overestimate the speed with which their clients will come.