A Few Thoughts on Starting a Private Practice

Starting a private practice can seem like there are SO many things you need to know, and if you miss one of them, you’re going to fail, get in trouble, or experience some kind of deep and enduring shame.

At least, that’s how it can feel.

This intensity and the unknown nature of business ownership can keep many of us from even seriously considering private practice as an option truly available to us.

There are absolutely things you need to know. There are legal and ethical requirements. There are taxes to pay and records to keep and forms your clients need to sign.

But there is no one right way to build a private practice. You do not need to know how to do all of it before you begin. You will learn as you go. I promise!

Here are some of the questions I often get from colleagues considering this option:

How do I do it?

I made you a checklist. It’s pretty thorough. Feel free to email me (arianalloydlcsw@gmail.com) if you get stuck on any of the steps or you’re not sure what I mean.

→ Download: Oregon + Washington Private Practice To-Do List

Also, consider getting a business mentor (for free) through the Small Business Administration SCORE department. I worked with my mentor for about 8 years, meeting once a month for one hour. It really made all the difference for me.

How much will I make?

Good question! Important question.

I generally encourage folks to build their projections around a 40 work-week year. We’re subtracting 12 weeks for sick days, vacation days and client cancellations. You’ll likely work more weeks in the year, but we’re being generous and under-estimating, so you’re more likely to be pleasantly surprised by what you earn. I learned this way of thinking about it from one of my business mentors, Annie Schuessler-Zam (who hosts a very cool podcast).

Annie taught me to simplify, and to consider what kind of structure a business needs to have to make a certain amount. They taught me how to simply calculate and play around with numbers, so I was certain that the amount I was charging really would meet me/my family’s needs.

Have fun with this one. To be honest, in the first few years of my practice, I would pull up this spreadsheet whenever I got nervous. I learned to rely on the numbers for reassurance, and they are very effective in doing that!

→ Download: Private Practice Income Calculator

What about taxes?

Honestly, taxes are simpler than I realized. My current system is to save about 30% (an over-estimate for me, usually) of income each month in a high-yield savings account. Then I pay estimated quarterly taxes by going on the IRS website and making a direct payment. (I have, many times at this point, forgotten to do this. What happens? An annoying but not bank-breaking penalty. And embarassment, but the recovery is quick :). There are a million business owners making a million mistakes every day. We’re all just doing our best).

Annual taxes as a single-member LLC or sole proprietor (they are generally taxed the same) are pretty straightforward as well, and many business owners DIY it through something like turbo tax. I now pay for a CPA which is expensive and probably unnecessary for a lot of straightforward solo practices, but it’s become worth it for me because I have multiple businesses. If you do go the CPA route, you’ll want to secure someone by fall (at the latest) of the year before the April tax season. I work with this guy (luke.barrett@kingfishertax.com).

What do I actually need to do legally?

This is another category where it can start to feel like there must be some secret list everyone else received.

There isn’t.

You’ll need to think about things like your business structure (sole proprietor, LLC, etc.), registering your business with city and state (I highly recommend calling your Secretary of State and Department of Revenue to ask any questions…I’ve found them to be really kind and knowledgeable people!), professional liability insurance (I use this), banking, and the requirements associated with your particular license and where you practice.

Oregon and Washington are also different, which is why I put the state-specific information I know into the to-do spreadsheet rather than trying to reproduce all of it here.

Before seeing your first client, you'll want to make sure the basic requirements for your practice are in place: appropriate business registration/licensing, professional liability coverage, your informed consent and other required disclosures, a secure way to maintain records, and whatever else is required by your license and jurisdiction. Some of the other business infrastructure can continue to develop as you go.

What about documentation?

Your informed consent is one of the first documents I would get really thoughtful about. It explains the relationship you’re entering into with your clients, including fees, confidentiality, communication, cancellations, telehealth, records, emergencies, etc. It’s an important document that holds your practice policies.

I took my own informed consent, removed my identifying information and practice-specific policies, and updated it as an Oregon/Washington template:

→ Download: Example Oregon + Washington Informed Consent Template

Feel free to put in your own specifics. You’ll want to add your practice philosophy, rates, cancellation policies, etc.

For documentation more broadly, I also really appreciate the work and trainings of Maelisa McCaffrey and Barbara Griswold. If this is something that stresses you out (and it does for many people), taking a training will help.

How do I choose an EHR?

I would not spend weeks on this decision. For many people I know, the question comes down to a choice between Simple Practice or Sessions Health (I use the latter). There are more options, but these seem to be the most-used two.

Things I would highly consider: cost, customer support, billing/claims if needed, telehealth, forms, client experience, and what they're doing with AI and client data.

And just know, if you don’t like your EHR, you can change it later. It’s not fun, but it’s also very do-able.

Do I need a niche?

No. To be honest, people ask me what mine is and I still don’t have one specific thing that I’ve decided is my one and only. I’m sure this will change, and I’m ok with that happening on its own.

Some clinicians know right away what they want to focus on. Others take time. Both are just fine.

A niche can make it easier for people to understand what you do and can make marketing easier. It can also develop over time.

You can start a practice, see who comes through the door, pay attention to who you really enjoy working with and what kind of work feels especially meaningful to you, and let your practice evolve.

You are not choosing your professional identity for the rest of your life.

I will say, though, that if you are committed to being private pay only (which at the time of this writing, is running about $150-250 a session in OR/WA), you’ll likely need to specialize. People will need a really good reason for going outside of their insurance benefits to see you.

What if I become unable to work?

This one used to keep me up at night. I have two under-18 kids who rely on me financially.

When you work for a large employer, there are a lot of things happening quietly in the background: health insurance, PTO, sick leave, retirement contributions, disability insurance.

When you work for yourself, you become the background.

If possible, I like the idea of eventually having 3–6 months of expenses in a high-yield savings account in case you become unable to work. Disability insurance is also worth looking into, though I’ve learned that many policies exclude a lot of pre-existing conditions, so check into that. And if you’re considering leaving an employed position, actually figure out what it will cost to replace your health insurance and other benefits.

None of this means you need six months of savings and a flawless retirement plan before you’re allowed to start seeing three private practice clients.

It just means these things deserve to be part of the calculation.

How do I stay engaged in social justice work?

I think this is a really important question for social workers in particular. It’s something I have thought about a lot. I like helping people on an individual basis, but I also want to contribute to larger systemic change.

Private practice can bring up complicated feelings about leaving community or institutional work, who gets access to our services, and whether we are still living out the values that brought us into social work in the first place.

I don’t think there is one morally correct answer to this.

You might reserve sliding-scale spots (Open Path is great for this). Take Medicaid. Take other insurances (you can pay for help to get paneled, if needed). Provide supervision. Teach. Organize. Volunteer. Donate money. Advocate for policy change. Keep a small amount of institutional or community-based work. Use some of the autonomy, energy, or income private practice gives you to support work you deeply care about.

The idea that private practice precludes community and systemic work doesn’t really seem to hold up. For me, I’ve found that the life, purpose, meaning, and income that private practice gives me have made it possible to contribute more than I could when working full-time for someone else.

A few final thoughts:

You don’t need to do all of this at once. You don’t even need to do it by yourself. There are so many resources out there (including Zynnyme, which I like—you can hear me on their podcast here). You can take it one step at a time and still trust it will work out. The pace may be what you expect, and it may be its own thing altogether. That’s ok too.

You also don’t need to decide whether private practice is right for you forever. You can just decide what you want to be doing for the next 12 months. You can experiment with it. 3 clients a week. One private practice day. Keep your job, and do a bit of moonlighting. See what happens.

I’m very excited for you to consider this option. Even more so, I’m happy that you’re giving yourself permission to do what you want, what you feel most deeply drawn to. I think that’s what we’re here for.