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Writer's pictureEmpathic Team

How to Start a Private Practice

Starting a private practice as a mental health provider is a big step in one's career and is both exciting and challenging. It is a lengthy process that requires dedication to managing several key business and administrative tasks. Once complete, however, your private practice opens doors to.


In this article, we'll discuss some of the decisions you'll make as you prepare to open your private practice.


1. Choosing a Business Name and Structure

Business Name

Selecting a business name is a foundational step in establishing your practice. Your name should reflect your professional identity and resonate with your target audience. Consider names that are memorable, relevant, and convey professionalism. Ensure the name is unique and not being used by checking online business registries and domain availability.


Legal Structure

Decide on the legal structure for your practice. Common options for a private practice are sole proprietorships and limited liability companies (LLCs).

  • Sole Proprietorship: The simplest business structure, where an individual owns and operates the business. The owner is personally responsible for all debts and legal liabilities incurred by the business, meaning personal assets are at risk if the business faces financial trouble or legal issues.

  • Limited Liability Company (LLC): This structure separates the owner's personal assets from their business liabilities and offers flexible management and tax options.

Consult a legal or financial advisor to choose the structure that best aligns with your goals and needs.


2. Getting the Necessary Licensing

Before opening your practice, ensure you have the required licenses and certifications. This typically includes:

  • State licensure: Obtain the necessary state licensure for your specific mental health profession. Check with your state licensing board for requirements and application processes.

  • Business license: Apply for a business license from your local city or county government.

  • Federal Employer Identification Number (EIN): Apply for an EIN from the IRS for tax purposes and to open a business bank account.

  • National Provider Identifier (NPI): An NPI is your unique identification number as a covered healthcare provider for HIPAA transactions. It is required by clearinghouses and insurance companies. Even if you don't plan on accepting insurance, you should still apply for an NPI.

3. Setting Up a Business Website

A professional website will allow potential clients and insurance carriers to learn more about your private practice and its services.

A professional website is crucial for establishing your online presence and attracting clients. Your website should include the following pages:

  • About: Information about your qualifications, services, and approach.

  • Contact information: Easy-to-find details on how clients can reach you.

  • Online scheduling: An option for clients to book appointments online (if you choose to allow this).

  • Blog or resources: Content that showcases your expertise and provides value to potential clients.

Consider hiring a professional web designer to ensure your site is user-friendly and visually appealing.


Empathic offers web-building services. Contact us for a quote.


4. HIPAA-Compliant Email and Communication

Client confidentiality is paramount. Use a HIPAA-compliant email service to protect sensitive information. Ensure your communication systems, including email and any other messaging tools, adhere to HIPAA standards to safeguard client data.


Empathic is a partner of Hushmail, a HIPAA-compliant email provider. Our users receive a lifetime discount on Hushmail services!


5. Setting Up a Business Bank Account

Open a separate business bank account to manage your practice’s finances. This helps in:

  • Tracking expenses and income: Simplifies bookkeeping and tax preparation.

  • Maintaining professionalism: Keeps personal and business finances separate.

  • Building business credit: Helps in establishing a financial history for your practice.

6. Getting a Business Phone Number

Many clients still call to schedule or cancel appointments. Your private practice will benefit from a dedicated phone number.

A dedicated business phone number enhances professionalism and separates work calls from personal ones. Consider options like:

  • Landline: Provides a stable and reliable way for clients to reach you.

  • Virtual phone system: Allows you to manage calls and messages from multiple devices and provides features like voicemail and call forwarding to your cell phone.

7. Choosing an Office Space

When selecting an office space, consider:

  • Location: Choose a location that is convenient for clients and accessible.

  • Size and layout: Ensure the space is adequate for therapy sessions and administrative work. A calming environment is essential for client comfort.

  • Accessibility: Ensure the office complies with ADA regulations and is accessible to all clients.

  • Lease terms: Negotiate terms that allow flexibility for growth or changes in your practice.

If you decide to offer exclusively virtual services, consider dedicating a room in your home or renting out a small office space to ensure privacy.


8. Building a Client List

Your private practice can build a robust client list through a combination of marketing, referrals, and a strong online presence.

To build a client base, employ a mix of strategies:

  • Networking: Connect with other healthcare professionals and community organizations to generate referrals.

  • Online presence: Develop a strong online presence through your website, social media, and professional directories.

  • Marketing: Use targeted marketing strategies such as local advertising, workshops, or seminars to attract clients.

  • Client referrals: Encourage satisfied clients to refer others. Implementing a referral program can incentivize this.


9. Administrative and Operational Considerations

Running a private practice involves several administrative and operational tasks:

  • Billing and insurance: Set up a system for billing clients and managing insurance claims if you accept insurance (read our guide on choosing a revenue system if you're unsure). If within your budget, you may want to hire a biller to manage this time-consuming part of your business.

  • Confidentiality and record-keeping: Implement systems for maintaining confidential client records in compliance with HIPAA. Invest in secure electronic health record (EHR) systems if possible.

  • Office Management: Establish procedures for scheduling, client communication, and managing office supplies. Effective office management contributes to a smooth and professional practice.

  • Professional Development: Stay current with industry trends, continuing education, and best practices to provide high-quality care and maintain your licensure.


With careful planning and consideration, you can create a successful and fulfilling practice. Remember to stay adaptable and open to continuous learning and improvement as you navigate this exciting venture. By laying the foundations for success, you can build a practice that not only serves your professional aspirations but also positively impacts the lives of your clients.

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