Private practice is the top goal for many clinicians. The process can seem challenging, but it doesn’t have to be. Here is a task list, in a very specific order, that will help guide you in your journey towards independence. Follow these steps, one at a time. If you have any questions or you want to schedule a consultation around this topic, please do not hesitate to contact me (mayrena@colorfulresilience.com).
Determine if you want to be a Sole Proprietor (uses SSN) or an LLC (uses EIN).
If you want to be an LLC, this is the moment for you to contact a business lawyer and get that done.
Open three business accounts: One for income (checking), one for expenses (checking), and one for taxes (savings). You need a voided check for the income account and an ATM for the expense account.
Determine if you will be accepting insurance or not.
a) Which insurances, exactly?
b) Will you bill for services yourself or utilize a billing company?
c) Will you do your own or outsource insurance paneling? I highly recommend outsourcing this process.
Obtain liability insurance. Ensure you are insured for the maximum allowed, and Telehealth services are also covered.
If you are taking insurance, you must start the credentialing process NOW. It takes 3-6 months to be completed.
Determine if you are working 100% remotely or if you are seeing clients in person as well.
a) A separate space at home or elsewhere for work is a business tax deduction.
b) Will you have your own office or sublet days at another clinician’s office? (You can consider having your own office and subletting to other clinicians).
Determine who your clients are
a) Demographic you want to work with.
b) Behavioral health presentations you are excited to work with.
c) Treatment modalities you want to advertise as central to your practice.
d) If you make it too broad, you will get many clients you may or may not enjoy working with. If you make it too small, you will not have a big enough pool of clients to fill your schedule.
If you want a website, this is the time to start designing it.
Pick an EMR. I recommend Simple Practice because it does billing, scheduling, and reminder calls, holds medical records, has its own HIPAA-compliant Telehealth platform, and you can take payments electronically via Stripe (built-in).
a) Set up service codes for billing purposes. For a complete list of billing codes, go to https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=57480 (please note not all insurances accept all billing codes. Consult your Fee Schedule for the insurance companies you take once the paneling process is completed).
Prepare all of the documentation you will use for clients: Consent forms, clinical documentation, and assessments.
Determine your schedule.
a) Make sure your schedule makes sense for the populations you will see (if you see couples, you may want to have evening appointments available, for example).
b) Make sure you don’t schedule more than six clients in one day (do not fry your brain!)
c) Make sure your schedule allows time for phone calls to insurance companies and completing clinical documentation.
Once paneling comes in, make your profile as a therapist in Psychology Today. Make sure your picture is there, photos of the space (if you see clients in person), and a very short video of you so clients can “sense your vibe.” If you decide on a website for yourself, this is the time to make it go live.
Find a peer supervision group or an independent clinical supervisor to meet with at least twice a month.
Ensure you complete 15 CEUs yearly to keep up with your license.
Things to keep in mind:
Your business expenses are office rent, electricity, internet, virtual fax, work number/cellphone, Psychology Today (marketing), EMR (electronic medical record), liability insurance, paneling/credentialing service, billing service, accountant/tax person, the equipment you use to work (computer, stand, phone, desk, chair, books), CEUs, and health insurance.
Seeing 20 clients a week, 48 weeks a year, your earnings will be around $115,000. Your average earning potential is $120 per client per session. In reality, you will get sick, or things will come up. Remember that you don’t get paid when you don’t work. Ultimately, your income will be determined by your hustle.
You need to put away 10% of your income for taxes. I recommend doing this weekly. You can pay taxes quarterly or take a minor penalty and pay them on tax day. Consult with an accountant about this.
You need a bookkeeping system to track your income and expenses. I recommend QuickBooks Online. I also recommend the book Profit First by Mike Michalowicz as your guide for all things related to money in your business. I cannot stress this enough: Read the book.
Wishing you great success! Onward!!!
Mayrena Guerrero LMHC (she/her)
Founder and CEO, Colorful Resilience LLC
