Know if Going It Alone Will Work for You
I often talk about the benefits of starting a private practice. However, owning your own business isn’t for everyone, and working for a counseling agency is not an inferior alternative. Listed below are 4 reasons to not start a private practice. If any one of the following applies to you, starting a practice may be a bad fit.
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- I need money now!
I have stated that a licensed counselor can start a practice for as little as a few thousand dollars, and that the practice could become cash flow positive within a few months. This is still true. However, one shouldn’t expect to bring in much net profit in year one. Hence, if you are under-capitalized or need a full time income right away, starting a practice might not be the best career choice.
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- I want to keep my work separate from my life!
Due to the nature of the job, counselors often struggle with leaving their work at the office—if you own the office, multiply that struggle by 10. For the small business owner, work is intertwined with life. It’s like having a child: the business requires constant attention. You will be home with it on Friday nights. You will be up at 4am comforting and feeding your business.
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- I hate business! / I just want to be a counselor!
Running a private practice has little to do with counseling and a lot to do with operations (billing, staffing, administration, etc.). I have never met a successful private practice owner who dislikes business. If you’re starting your practice longing for the day that you can focus exclusively on client care, you should think about joining an agency.
- I don’t want to start from scratch!
When starting a practice, often both the business and the clinician are starting from scratch. Get prepared to enter a whole new world of learning. Successful practice owners have read a library’s worth of business books, and have aggressively sought information and mentorship. In addition, building a company is a gauntlet of successes and failures. If you’re not interested in getting an MBA from the School of Hard Knocks, think agency.
Becoming a High Paid Agency Employee
Some counselors think about working for a counseling agency as a “pay me a wage, an I’ll come to work” situation. In contrast, to become a high paid agency employee, it’s better think about agency work as a partnership where both parties bring value to the table. Traditionally, an agency provides office space, clients, clinical supervision, insurance, branding, and a variety of administrative services in exchange for a share of the money a clinician’s services produce. This is the case regardless of whether one is paid hourly, salary, or a percentage of counseling fees.
Hence, to become a high paid agency employee, a clinician needs to bring more to the table. For example, counselors become more valuable to agencies when they:
- Get the word out about their services instead of asking the agency to market their services for them.
- Speak publicly, and mention the agency.
- Speak with reporters to get quotations in print, or on the news (especially if they use the agency’s name).
- Publish, tweet, and build an online or offline audience.
- Build a reputation that brings in more clients. This is especially true if their reputation also brings in clients for other providers at the agency!
- Offer specialized services. This is valuable to the extent that their presence allows the practice to accept clients they would otherwise need to refer (e.g., children, foreign language speaking, autism).
- Self manage, or request less administrative support from the agency.
- Provide supervision or help to other providers at the agency.
- Are credentialed with various insurance companies (note: some agencies now require clinicians to be on insurance panels to even apply for a position).
Done right, one might find that working for an agency affords more freedom, and sometimes more money, than private practice. Finally, if you’re bringing serious value to the table, and your agency isn’t recognizing it, it might be time to look for a practice that will!
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Anthony Centore
Anthony,
As a teacher and Ed.D. in education, I am seriously considering starting a counseling business, but I honestly do not know where to begin. Besides my doctorate degree, am I still required to have some sort of licensure? Please advise.
LRH
I can’t say if you’re legally required, as it depends on where you want to practice, but for the good of your clients yes, if you’re going to practice professional counseling you should be licensed.
I live in a state with few counselors who specialize in serving Christian clients. It surprises me that there is no organization for them/by them here, and there are no “co-op” type of practices where they can work as a team. I’m also surprised churches don’t take more advantage of their services by providing space, etc. That is one path I’d like to follow, to reach Christian clients (among others) in a private therapy practice. As I have my LCPC-c, I need supervision and someone else to pay me. What if I send out a marketing brochure to the Christian counselors or churches introducing myself and asking if they want to expand their practice by adding me? Or do you have other suggestions for making such connections?
Anthony:
Thanks for posting this great article. I find it a nice counter balance to “How Much Money Can A Counselor In Private Practice Make”. (That was an excellent article by the way.)
I am trying to determine whether or not to stay at my “agency” or start a private practice in my city with a SMSA of 125,00. I’m 62-years-old and have had a private practice before — in the late 1980’s and early 1990’s in the Dallas-Ft. Worth area. So I have a fairly good idea as to the amount of work, financial investment and stress, as well as the personal and professional satisfaction that comes with such a business.
Anyway, I am a W2 employee with an agency which primarily provides Behavioral Health Intervention Services (BHIS) to children and adolescents covered by Medicaid and their families. Part of my job is to supervise a group of eight bachelor’s-level workers who provide remedial services to the clients in their homes. I see 13 – 23 therapy clients a week. They include self-pay sliding fee clients ($55 – $125 an hour); Medicaid ($102.64 for 907901 and $69.82 for 90834); BC/BS ($141.00 for 907901 and $95.00 for 90834); various EAPs ($65.00); and other insurance providers.
I believe I receive fair pay per therapy hour ($45), which is the highest therapist pay in the agency, and as long as I average 20 clients a week I get vacation, sick leave and holiday pay. I started with zero clients and had to develop my own referrals as the agency’s partners do very little marketing. It took me over 18 months to reach a 20 clients/week average. A 401K is offered but there is no employer match. The agency provides the office, but the furniture they had was pretty shabby, so I’ve provided my own except for a desk. The agency also does the billing, provides wireless internet and the business phone as well as pays me for the use of my cell phone and provides a parking garage space.
Not a bad deal, right? Maybe. But maybe not. When I started here two years ago, I found that the agency was known primarily as a BHIS provider, not as a therapy practice. And most of the marketing contacts I’ve made, with the exception of DHS and Juvenile Corrections and a few pediatricians, had never heard of the agency. So I’ve really had to sell myself. I have done play therapy with children aged 3 to 10 since 1986, but now want to phase out of seeing kids and focus on adult survivors of dysfunctional, abusive or substance abusing families. I have started my own website and have a Psychology Today listing, both targeting adults from dysfunctional families. I am also independently providing supervision for post-master’s counselors for their permanent LMHC’s.
It is difficult to position myself separately from the agency, especially now that more than half of my client load are adults. Hence my dilemma: should I stay with the agency, which is in many ways like a protected private practice, and work harder to differentiate myself by writing, speaking, consulting and individual marketing contacts? I’d like to increase my weekly client sessions to a steady 25 per week. Or do I embrace the risks and potential rewards (including higher income) and head out on my own in private practice?
I don’t want you to tell me what to do, I just would appreciate some feedback on the pros and cons of each direction.
Hi Gary,
Thanks for the background. It really helps to get a full picture. I can see why you’re stuck. $45 a session is very good pay in most areas, and you don’t have to deal with billing and a number of other admin tasks. However, since you can get your own clients, you might be leaving some money on the table. How much is the question. I think the only way you’ll truly know what financial choice is right for you is to calculate all the expenses you’ll endure going it alone (rent, reception, insurance, marketing, etc), your volume in the first year or two, and the amount of work you’ll need to do when you no longer have any admin support. You might find that you’re likely to make a little more money gross, but the time and effort to get there is too much. For example, it’s amazing how many hours can be spent on the phone with potential client each week alone. You might be better off seeing more clients at your current place of employment, or seeing if there is anything you can do to get a bump in pay if that’s what you’re really seeking. If you can drive even more volume to the practice through your reputation and work, would your employer be willing to pay some bonuses or increase your per session fee?