When to start private practice
Startup Costs of Part Time Private Practice | Start Private Practice on a Budget
What's up guys! So you're thinking about starting a psychotherapy private
practice, but how much does it even cost? I know from experience that it can often
feel like, "Well, I guess you're just supposed to get started,
pay the money, and you'll find out later how much it costs you." But it doesn't
have to be that way! In this video I'm going to break down the cost of starting
a part-time psychotherapy private practice and share some tips for how you
can save money if you're on a budget.
Welcome to Private Practice Skills. I'm Dr. Marie Fang, psychologist in
private practice. I post videos offering tools I learned the hard way about
starting and growing private practice so that you don't have to. Thanks to
everyone who voted on Instagram to request this video. If you're not
following me on the 'gram yet, be sure to do so. I have lots of opportunities for
you to give me feedback about what type of content appears in these videos. I
decided to split this video into a three-part series: the startup costs of
part-time private practice, the startup cost of full-time private practice, and
yearly expenses for full-time private practice. Today's video is going to be
focusing on the start-up costs for part-time private practice, because I
recommend that if you're interested in starting private practice that you
really do start part-time, get your toes wet, save a bunch of money, and see if
private practice is right for you before diving in full-time. Keep in mind that
costs vary widely depending on where you live and how frugal you're wanting to be
as you get started. However, if you go through this checklist of items you
should be able to get a pretty clear idea of how much it'll cost you before
you've had to even pay for anything. First, start with your website. You could
technically actually do this for free if you wanted to, but I recommend you go
with an option that's ad-free and allows you to have your own domain name. If you
build your own website, these kinds of sites can range anywhere from 15 to 35
dollars a month, or you can pay a much higher premium and have somebody else
design a website for you. If you're curious about that I go over that in
much more detail in my video about how to build a website.
Number two: unless you're planning on providing exclusively teletherapy
services, you're going to need an office in order to practice. Now if you're just
starting out I do recommend you go part-time. There's two ways you could do
this: one is you could rent per hour and only pay for however many client
sessions you're using an office space, or sublet one day a week to start. So the
way it works per hour is if you have a colleague or someone within your
networks that's willing to share their space with you, that is the cheapest
option and easiest on-ramp. As an example, in my area to rent per hour is about
15 dollars on the hour, but you only pay if you're using the office. Now if you
sublet one day a week then you know that that space is yours for that full day.
And just as an example, to sublet one day a week, per month you end up spending
about $180 and it goes up from there.
Now that varies widely depending on where you live, so I recommend you check
on Craigslist just to get an idea of how much sublets are going in your area. Also
keep in mind that some spaces will still require a security deposit even if
you're just subletting. Number three: liability insurance. Super important! This
will probably be your biggest expense starting out if you're starting
part-time. However, the good news is a lot of insurance companies have incentives
for people who are just starting out and they charge less when you're in your
early career, probably because they assume you're going to see fewer clients.
And then over time they will charge you more. So I've seen rates as low as four
hundred dollars for the year, but you do have to pay all upfront. But just to give
you an idea, I've been in practice for six years and I have some pretty good
coverage and I'm spending about eight hundred dollars a year on my liability
insurance. Number four: city business license. Now this varies widely depending
on what city you live in, but just as an example I've practiced in three
different cities in the Bay Area and the annual fee ranged from ninety dollars up
to two hundred dollars a year depending on which city I was practicing in, so be
sure to check with your local city the laws and policies to see if you need a
business license and how much it's going to cost you. Number five: you're going to need a
file cabinet, or a practice management system, or possibly both depending on how
you do it. Now despite my love of technology, I'm a bit old school after a
few scarring experiences with practice management systems so I do all paper
files for my client charts. If that's true for you, all you need to do is buy a
small portable file box. I used a small one for my first couple
of years when I was just subletting. It needs to be portable so just make sure
it has a handle and then of course make sure make sure make sure there's a way
for you to lock it in order for you to comply with all of the HIPAA laws. I'll
link to the one that I used early on. It was under $20 and I bought a lock from
the dollar store so this doesn't have to break the bank. Now if you go with a
practice management system it's going to cost you a bit more money, but then you
can do all of your charts online. So for example, simple practice their most basic
subscription service is $39 a month and it goes up from there. Just to put this
out there, I am a rather frugal person and in the
last six years that I've been practicing and not using an online management
system, I've saved nearly three thousand dollars
in that monthly fee. Think about it. I'm going to share a few more things that are
optional costs so they're things that you could either get for free or forego
all together. You might decide though to pay for some of these items as well. Of
course you're going to need a way for clients to call you, so you need a phone
line. Now personally I use Google Voice which is totally free and forwards to my
personal smart phone. Now I don't recommend you use your personal number
as your therapy practice number, though I do know some people who do choose to do
that. But you can pay and have your own separate phone line. Now if you want to
be in the 21st century, then you're probably going to want to have an email
account affiliated with your business as well. Now there are a few diehard therapists
out there that still don't have an email address. And if that's you, more
power to you, but I think I would go crazy playing phone tag with all of my
clients. I already have a lot of trouble with that as it is. If you're going to get
an email account, there certainly are free options and
you're free to do that. However, you run up against some
issues with HIPAA compliance if you do that. I use G suite which costs only five
dollars a month and with a little bit of tweaking in the settings you can make
your email HIPAA compliant, which is fantastic. I will need to put a video
about that up sometime so that you can be HIPAA compliant your email. whoo yeah.
I don't know what that what that was. Carrying on! You may also consider whether
you'd like to have business cards. Now these days business cards really aren't
that necessary and honestly I have business cards and when I go to pass
them to someone more often than not they just take a picture of my business card
on their phone and let me keep my business card because they think they're
going to lose it. So if you want to get business cards, the cheapest option for
that is probably vistaprint and if you keep an eye out they frequently have 50%
off promotions and you can probably get a pack of like a hundred for maybe like
8 bucks if you get a good deal with one of their sales. So you might try that.
Start with the smallest box you can find because honestly if you're subletting
you're probably going to be moving in not very long, and how sad would it be to
have like 400 business cards with an address that you haven't been working at
for years. So stick with a small box. The last item you might consider paying for
is being listed in online directories. Now if you do go this route you could do
Psychology Today. They offer a six month free trial so it seems totally worth it
to go ahead and try it and see later - six months down the road - if you'd like to
keep that open and pay for it. But you can skip this step and save yourself
that money of course. I've offered this as all of the costs of private practice
with the assumption that you have access to some type of online device and some
type of internet. So putting all of that together, if you're really frugal like me
and you wanted to start a part-time practice in the city that I live in, you
could get everything started up and running for just over eight hundred
dollars upfront cost, and then a monthly cost of about a hundred and ninety five
dollars each month after that. So just think about it: you could reasonably
probably save that money up and spend it all at once without needing to go into
any debt, and that's super awesome! This is the exact same strategy that I used
when I started private practice in my current city and I recouped all of my
costs within the first two months of starting private practice. I hope you
found this video helpful to give you an idea of the start-up cost of a part-time
private practice. Stay tuned for more videos in this series down the road and
until next time, from one therapist to another,
I wish you well. Recommend that you oh ooh! My cat tried to attack a
squirrel that's on the fence which is outside.
There's a window in between. And my dog...
