How to start a private practice in therapy, step by step

Are you ready for private practice?

• Your license permits independent practice. Why: associate or provisional licenses may require supervision; check your board's rules.
• You know your caseload target. How many sessions a week can you sustain clinically, and how many pay your costs?
• You have savings or part-time income to cover the months while the caseload builds.
• You know your niche. "Anxiety in college students" fills a calendar faster than "individuals and couples."
• You have a consultation plan: a peer group or paid consultation, since you'll lose the built-in supervision of agency work.

Licensure, business entity and liability insurance

• Confirm your license with your state board. Counselors can find each state board through NBCC's state licensure board directory (opens in a new tab); NBCC notes that each state board "administers the application processes and procedures." Social workers can reach state and provincial boards through ASWB's license lookup links (opens in a new tab). Marriage and family therapists and psychologists should go to their state board directly.
• Check licensure for telehealth clients in other states. Why: your board will tell you where you may see clients.
• Form a business entity (often an LLC or PLLC) and get a tax ID. Ask an accountant which fits your state.
• Buy professional liability insurance for private practice, plus general liability if you lease an office.
• Open a business bank account and keep practice money separate.

NPI, insurance panels or private pay

• Get an NPI through NPPES (opens in a new tab). Why: insurers require it, and superbills for out-of-network clients use it.
• Decide your payment model:

• If paneling: complete your CAQH ProView profile and apply to each plan; credentialing often takes several months, so confirm with each payer.
• If private pay: decide whether you'll give superbills for out-of-network reimbursement.

HIPAA, records and telehealth setup

• Choose an EHR built for therapy, and sign its Business Associate Agreement (BAA). HHS says a vendor that handles PHI for you needs a written contract (opens in a new tab).
• Keep psychotherapy notes separate. HHS defines them as notes by a mental health professional documenting or analyzing a private counseling session, kept apart from the rest of the record, and says their disclosure generally requires the client's authorization (opens in a new tab).
• Pick a telehealth platform that signs a BAA. HHS's COVID-era telehealth enforcement discretion (opens in a new tab) expired on May 11, 2023, with a transition period that ended August 9, 2023. Consumer video apps without a BAA are no longer covered by it.
• Secure email, texting and forms, each with a BAA where they hold client information.
• Write your Notice of Privacy Practices and informed consent, including telehealth consent.

This is general information, not legal advice. Confirm how it applies to your practice with a qualified advisor.

Fees, sliding scales and Good Faith Estimates

• Set your full fee from your costs and caseload target, not from what an agency paid you.
• Decide on a sliding scale: how many spots, what criteria, and how you'll document it.
• Give Good Faith Estimates (GFEs) to uninsured and self-pay clients. Under the No Surprises Act rules at 45 CFR 149.610 (opens in a new tab), "self-pay" includes clients who have insurance but don't want claims submitted. CMS's consumer guide (opens in a new tab) gives the timing: scheduled 3–9 business days ahead, an estimate within 1 business day; 10 or more business days ahead, within 3 business days; and within 3 business days of a request. Estimates must be in writing.
• Write a cancellation and late policy and include it in intake paperwork.

Office space or telehealth-only

• Weigh the trade-off. An office costs rent but gives you a local presence and a Google listing. Telehealth-only keeps costs low but limits local visibility.
• Know Google's rule. Google's Business Profile guidelines (opens in a new tab) require a physical location clients can visit; a rented mailing address you don't operate from isn't eligible, and a co-working office needs clear signage. A telehealth-only practice generally can't have a Business Profile.
• Consider a part-time sublet a day or two a week if you want both.
• Soundproof and check privacy in any space: waiting area, walls, and where clients can be overheard.

Getting your first clients

• Build a complete directory profile. A Psychology Today listing is where many clients start; write it about the client's concerns, not your training.
• Launch a clear website with who you help, how you work, fees or insurance, telehealth availability, and a HIPAA-compliant consultation request form.
• Add crisis information to your site and voicemail. You are not a crisis service; point people to the 988 Suicide & Crisis Lifeline (opens in a new tab), which people can call or text at 988, free and around the clock.
• Tell your referral network you have openings: colleagues, physicians, former supervisors, school counselors.
• Follow the testimonial rules. The ACA Code of Ethics, standard C.3.b, says counselors "do not solicit them from current clients, former clients, or any other persons who may be vulnerable to undue influence" (ACA Code (opens in a new tab)). APA Standard 5.05 says psychologists "do not solicit testimonials from current therapy clients/patients" or others vulnerable to undue influence (APA Ethics Code (opens in a new tab)). Check your own profession's code.
• Write ads that don't imply a diagnosis. Meta bars ads that assert or imply personal attributes (opens in a new tab), including mental health: its own examples allow "Depression counseling" but not "Depression getting you down? Get help now."

For the marketing side in depth, see marketing for therapists and getting more therapy clients.

Medfy rebuilds and hosts a practice's website with HIPAA-compliant forms, and its patient CRM and inbox keep every consultation request in one access-controlled place. The base plan is $349 a month, and Medfy signs a BAA with each practice before any client data flows. Start with the free audit and website preview.

Opening a different kind of practice? See starting a medical practice, starting an ABA company, or the overview on how to start a private practice.

Frequently asked questions

How do I start a private practice as a therapist?

Confirm your license allows independent practice in your state, form a business entity and buy professional liability insurance. Get an NPI, decide between insurance panels and private pay, and set up HIPAA-compliant records, email and telehealth with signed Business Associate Agreements. Set fees and Good Faith Estimate procedures for self-pay clients, then build a directory profile, a Google listing if you have an office, and a clear website.

Should a new therapy practice take insurance?

It depends on your market and your runway. Panels bring a steady flow of referrals but take months to join, set your rates and add billing work. Private pay lets you set fees and start sooner, but you must find every client yourself and give Good Faith Estimates. Many therapists start private pay, join one or two panels, and adjust after a year.

Does a therapist in private practice need a website?

Yes. Clients usually find a therapist through a directory or a search, then check the therapist's own site before reaching out. A simple site that says who you help, how you work, your fees or insurance, whether you offer telehealth and how to book a consultation does more than a long one. Any contact form should be HIPAA-compliant.

How do new therapists get their first private practice clients?

Most start with a complete directory profile, such as Psychology Today, plus a Google Business Profile if they have an office clients visit, and a clear website. Tell colleagues, physicians and former supervisors you have openings. Write about the specific concerns you treat. Avoid asking current or former clients for testimonials, which professional ethics codes restrict.