If you're considering going into private practice, it's always smart to talk to other clinicians who have been there. When I opened my practice years ago, I had very little business experience. Luckily, I did a few things right that allowed me to be profitable (and it didn't hurt to be married to a CPA). Over time, I learned that I have a knack for marketing and networking that has allowed my practice to continue to grow, even during a recession. Few private practitioners are armed with small business skills when they venture into private practice. According the U.S. Small Business Administration, around 50% of new businesses will close their doors within 5 years. The realities of making a profit and running a successful private practice can be discouraging and exhausting. If you're considering opening a practice, I think you'll enjoy several seasoned practitioners answer the question,"What do you wish you'd know before starting your private practice?
Private practice is a business
Like most of therapists, Emma K. Viglucci, CFT, LMFT, CIT of New York City didn't really understand what it takes to run a business when she opened her practice. "I had some ideas about running a business as both of my parents owned businesses, and about running a practice from assisting run my graduate program's clinic. But, I didn't know the nuts and bolts of being in business."
It's easy to overestimate profit and underestimate the amount of work it takes to start and build a private practice. Psychologist and professor Karen Sherman, Ph.D. says she wished she'd know that working for herself "wasn't going to be as lucrative" as she thought.
Save for self-employment taxes
When you go into private practice you'll be paying self-employment taxes. If you're used to working for an agency where your taxes are automatically withdrawn each paycheck that catches new practitioners by surprise. Just to give you an idea of how much to save, self-employment taxes for 2011 in the U.S. are around 13% (SBA.gov). Psychologist Roberta Temes, Ph.D learned about taxes the hard way. "My first year I did not diligently deposit half my fees into a bank account earmarked for taxes. That was a learning experience."
Understand managed care
Texas counselor Shannon Purtell MA, LPC, LPC-S, NCC wishes she'd better understood the world of behavioral health insurance before she opened her doors.
Before entering private practice, I wish that I had truly understood behavioral health insurance and Employee Assistance Programs. Trying to learn the ins and outs of insurance while building a private practice was not only frustrating and time consuming, it was costly. Without completely understanding the industry, I failed to negotiate better rates, was unable to qualify for certain panels, and did not always understand the reimbursement structure. Each company had a different way of handling referrals, authorizations, and reimbursement. Unfortunately, I started in private practice prior to electronic billing and online benefit verification/authorization which has dramatically streamlined the process.
Importance of marketing skills
New York City therapist Diane Spear, LCSW-R wished she'd been better armed with marketing know-how when she opened her doors. Spears says, "You can be a terrific therapist and have a tiny practice if you're not good at marketing. And if you're not naturally good at marketing and networking? Practice! A lot."
Developing a niche and area of expertise is what Clinical Psychologist and author Dr. John Duffy wished he'd known before opening his practice.
I wish I had known the importance of establishing a niche when I started, developing a particular expertise. I found that I work well with families, in particular teens, tweens and their parents. Specializing in this area, I've found that I have a strong knowledge base in this area, and I am more and more confident in my work. As a result, I have a full practice, a waiting list of clients, a popular book, speaking engagements. I am also now considered an expert in a number of media outlets.
Stay on top of billing and record keeping
When you're your own boss it's easy to set some of the less enjoyable and often tedious business details on the back burner. Arizona therapist Lisa Gomez MA, LPC wishes she'd known the importance of staying on top of those tedious administrative tasks. Gomez wishes she had understood the importance of staying "on top of your billing and having good records in regards to accounting."
Practice ebbs and flows
Many private practitioners are surprised by the fluidity of referrals and fluctuating direct care hours. My own practice always dips to the lowest number of referrals and fewest client hours every December. I learned through not getting a paycheck one December to save 10% each month throughout the year to cover the holiday lull.
Portland individual and couples counselor Julie Jeske M.S. has also learned by experience to trust the ebb and flow of her private practice. "I wish I had known more about the way things can fluctuate. Some weeks (or times of year) are really busy and others are slower. The first time things slowed down for me I got really nervous, but it always picks up again," Jeske says.
Solo practice can be isolating
When you practice in a clinic or agency it's easy to take social interaction and peer relationships for granted. There's always someone to grab lunch with or to consult with on difficult cases. For many therapists, the transition to private practice often means a loss of built in professional support system, and the need to actively seek social interaction and professional consultation.
When therapist Amy Luster, M.A., LMFT of Santa Monica, CA opened her practice she found solo practice to be isolating. Luster says, "It would have behooved me to learn about the benefits of participating in a group practice while I was in my graduate program."
Importance of setting boundaries
Maryland therapist Dr. Mary Sidhwani wished she'd know the importance of setting boundaries with clients.
Before I began my practice, I wish I would have created healthier boundaries. I wanted to be available for all my new clients and so returned phone calls and emails 24/7. As time went by, it became increasingly difficult to maintain that with the growing practice. I was able to put healthy boundaries in place, however, it would have been much easier if I had done that initially.
Now it's your turn. What do you wish you'd known before starting a private practice? Please post your comments below.