The Ultimate List of Private Practice Counseling Requirements

Takeaway: Opening your own private practice is a big step. It takes tons of research, time, and consideration to create your business. In this post, I cover all of the private counseling practice requirements you need in order to start this new chapter of your career..

Finally ready to take the leap and create a private practice? Congratulations!

This is an exciting opportunity for you to have more ownership over your work and practice in a way that feels good to you. So often, agencies (even those with the best of intentions) put us in a box that makes it difficult to thrive. Starting your own private counseling practice gives you total freedom.

At the same time, the process of starting a private practice can feel nerve-wracking and overwhelming. You might be confused about where you should start, or have inner roadblocks that make it difficult for you to fully embrace the idea of being a business owner.

I get it-I've been there myself. That's why I'm passionate about helping budding private practitioners like you. Here, I'll cover all of the private counseling practice requirements you need to feel confident taking this next step in your career.

UNDERSTANDING THE REQUIREMENTS FOR PRIVATE PRACTICE COUNSELING

There are tons of considerations that go into building your own practice. To make things even more confusing, some requirements might be different from state to state. I recommend checking into your local laws and state licensing board to make sure you have all your bases covered.

Otherwise, most of the basics for becoming a private practitioner are the same across the board. You'll need to meet certain professional and legal requirements, plus consider the logistics needed to get up and running.

Let's dive in.

professional requirements for private practice counseling

Before taking the leap into private practice, it's important to make sure that you meet the necessary professional requirements. Here, I'll let you know what you need to get started and address any of the misconceptions you may have about what's needed to open your own practice.

1/ level of education

While mental health laws may vary from state to state, private practice therapists generally need a master's degree. Most often, the degree must be from one of the accredited programs recognized by each counselor's profession.

As you probably know, there are different types of professionals who can practice therapy. Clinical social workers, Marriage and Family Therapists, Psychologists, mental health counselors, substance abuse counselors, and art therapists are a few of the professionals who can become private practice therapists.

2/ licensure

Many people think that you need to be a licensed clinician in order to have your own counseling private practice. Again, requirements may vary from state to state or even from profession to profession, but many masters-level clinicians can open a private counseling practice without licensure.

If you are a licensed clinician (such as a licensed professional counselor or licensed psychologist), you can open your practice independently. However, if you are a pre-licensed professional, you may need a clinical supervisor to operate your private practice.

3/ ethical standards

Whether you're a private practice therapist or work for an agency, therapists are bound by ethics. This goes beyond your personal sense of right or wrong. The board for your profession likely has a code of ethics that you're required to follow.

While the code of ethics may vary slightly between professions, most are similar. For example, you're required to get informed consent from your clients when starting your work together. You'll also need to be mindful of conflicts of interest or other ethical dilemmas throughout your time as a private practice therapist.

legal requirements for starting your own private practice

Private counseling practices are like any other business. You're required to register your business, get insurance, and comply with federal, state, and local laws. While that can sound daunting, it's more straightforward than you might imagine. Here are the major legal requirements you need to know when entering private practice.

1/ business entity

In order to establish your own business, you'll need to register your practice. Part of this is deciding which type of business entity you want.

For example, some private practitioners register as a sole proprietorship while other therapists register as a limited liability company (LLC) or a Corporation. In some states, like California, an LLC is not an option so you would choose between sole proprietorship and a Corporation. You can consult with a lawyer if you're not sure which type is best for you.

Since you'll be required to pay taxes, you must register with the IRS as well. You'll need to request an Employer Identification Number (EIN) so the IRS can identify your business. Depending on which type of business you register as, you may be able to use your social security number instead of an EIN.

During this step in the process, you'll also want to decide on your business's name. Many therapists choose to use their own name for their practice, but you can also get as creative as you want. Just check with your state business registry to make sure the name hasn't already been taken!

You may also need to obtain a county business license depending on where you live. To see if you need this type of license, check with your state or county's website or consult with a local attorney. 

2/ professional liability insurance

Insurance is a must for any private practice. You'll want to consider two main types: professional liability coverage and general liability coverage.

Professional liability insurance is also known as malpractice insurance. This type of plan covers litigation costs if a client were to sue you. It can also help you cover the costs associated with providing a deposition for a client.

General liability insurance isn't specific to being a private practitioner. It covers general injuries or incidents. For example, if a client was to slip and fall on the steps into your office, your general liability insurance would come in handy.

3/ hipaa compliance

Therapists in any setting are required to comply with the Health Insurance Portability and Accountability Act of 1996-better known as HIPAA. As you probably know, this law is meant to protect client privacy.

As you set up your private practice, you'll want to consider confidentiality at all times. Does your office space have soundproof walls? Is your video calling software HIPAA-compliant? Do you have a secure record-keeping system?

These are just a few questions to keep in mind when establishing your practice. You have both a legal and ethical obligation to protect your clients' privacy, so it's important to keep it at the forefront of your mind.

LOGISTICAL PRIVATE COUNSELING PRACTICE REQUIREMENTS

Now that you've checked off the business requirements for getting your practice up and running, it's time to move onto the logistics. These are the tangible, day-to-day pieces that make up the nuts and bolts of your counseling practice.

1/ get clear on your business plan

As your own boss, having a business plan is essential. This will provide you with the direction you need to establish and grow the modern private practice that you dream of.

There is a ton of information that goes into creating a solid business plan. A big part is identifying your ideal client and what you bring to the table as a therapist.

Need a little more direction? You can grab a free copy of my business plan template here!

2/ find an office space

When starting a private practice, you'll need to decide where and how to meet your clients. Are you going to see clients in person? Will you offer virtual therapy exclusively? Would a hybrid model be a better fit?

Only you can answer these questions. No matter which option you choose, you'll need to find an office space that works for you. This could be a corner of your spare bedroom if you're opening a virtual therapy practice. If you want to see clients in person, maybe you'll rent an office space full-time or even a couple days a week.

Once you've found your space, you'll be able to get office furniture, decorations, and other supplies you need.

3/ establish your policies

As a private practice owner, you get to set the rules. Finalizing your policies is one of the important business aspects of setting up your practice.

Setting your rate is a big one. How much will you charge per session? Will you join insurance provider panels? If so, you'll need to register for a National Provider Identifier Number.

When considering your rate, make sure to take your needs into account, too. Establishing policies that will support your financial goals can help you avoid burnout in the long run.

You'll also want to get clear on your appointment cancellation policy, privacy policy, social media policy, and more. There are many resources and templates that can help you with these.

4/ secure your own health insurance

Taking the leap into private practice can (unfortunately) mean forgoing insurance and other employer-provided benefits.

You have a few options here. If you're joining a group practice, you may be eligible for certain benefits through them. If your partner has insurance through their employer, you can consider using those benefits.

If these aren't options for you, you'll likely need to go through your state's insurance marketplace for a policy.

5/ choose your practice management software

Having an intuitive, all-in-one practice management software can really help with the business side of things (especially if organization skills aren't your strength).

Softwares like Simple Practice include appointment scheduling, a video platform, templates for therapy notes and treatment plans, payment, and help with administrative tasks like appointment reminders and sending paperwork.

6/ formulate a marketing plan

You've put in all the legwork to establish your private practice-now it's time to start working with clients! You need a solid therapist marketing plan to let people know that you're open for business.

Think about where your ideal client is showing up. Many clients find therapists online, whether that's through social media, a Google search, or therapist directories.

You can also make connections with local providers. For example, if your ideal client is likely working with a registered dietician, do some networking with dieticians in your area. Let them know you have openings so they can refer clients your way.

COACHING CAN HELP YOU NAVIGATE THE REQUIREMENTS FOR PRIVATE PRACTICE COUNSELING

Still feeling unsure about what it takes to build a successful practice? I'm here for you. After navigating my own personal experience creating a business, I've helped hundreds of therapists build the modern private practices of their dreams. I know it's possible for you, too.

My course lays out everything you need to know about becoming a private practice therapist: from setting your own schedule and rates to navigating boundaries and mental health in the world of self employment.

Prefer one-on-one support? I also offer private practice coaching for therapists. We'll hone in on what it looks like for you to be self employed in this space, and I'll provide personalized feedback and tips.

If you're interested in learning more about working together, I encourage you to reach out. My inbox is always open to fellow therapists!