What to Include in a Private Practice Business Plan

Takeaway: In private practice, you’re more than a therapist–you’re also a business owner. Whether you’re just starting your private practice or want to revamp it, having a solid business plan can help.

In this post, we’ll answer all your questions about creating a private practice business plan: what it looks like, why you should have one, and what to include.

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Congratulations on your decision to start your own private practice! This is a huge step in your career that deserves to be celebrated.

At the same time, it's okay if you have mixed feelings. I've been in your shoes before, and I'm all too familiar with the anxiety, overwhelm, doubt, and imposter syndrome that can come along with building a counseling private practice.

These feelings don't dictate your worthiness as a therapist or your ability to build the modern practice of your dreams, though. With a solid business plan, you'll have the confidence and inspiration you need to create your private practice.

therapy private practice business plan basics

You might feel a little hesitant or uncertain when thinking about a business plan for your mental health private practice-that is, if you're anything like I was when I was first starting out. After all, our grad school training focuses on providing counseling services, not conducting market research or calculating financial projections for a business.

However, your therapy practice is a business. Like any other company, it needs a business plan to really succeed. Here, we'll cover the business plan basics for your counseling private practice: what it is and why you need one.

what is a business plan for a therapy practice?

A business plan is exactly what it sounds like: a document that outlines all the details of your business. Think of it as your roadmap for starting and growing your practice.

According to the U.S. Small Business Administration (SBA), a traditional business plan usually includes information about your business itself, the services you offer, your marketing plan, and financial information.

Your business plan should be a living document. Your personal, financial, and professional needs may change, and so can your ideal client. Keeping your business plan up to date will make it as effective as possible.

Oftentimes, more detail is better. Having a clear picture of your future practice can help you work toward your business goals and attract more potential clients.

With that being said, there is no right or wrong way to create a business plan for your counseling private practice. You can use whatever format and components make the most sense to you.

why should i have a business plan for therapy practice?

Some therapists might feel resistant to creating business plans. You might wonder what the purpose of writing out your business plan when you've already conceptualized it in your head. You might think that formal business planning feels unnecessary for a counseling private practice. Maybe you simply feel lost and unsure where to begin.

I get it-I've been there. I can say for sure that having a business plan has been super helpful for growing my modern practice-and it has been for the hundreds of therapists I've helped, too. Here are just a few benefits of business planning when building your practice.

1/ it defines your ideal client

When creating your business plan, you'll hone in on your ideal client. This isn't about excluding people from your private practice-it's about identifying who you work best with so you can be the most effective therapist you can be.

Consider what season of life your ideal client is in. Are they in the day-to-day of raising young children, or are they adjusting to an empty nest? Are they navigating the transition out of college, or are they at the peak of their career?

From here, you can gain perspective on what your ideal client's strengths and struggles are. Of course, each individual is different, but it's likely that you see themes amongst the people you work with.

Once you identify your ideal client, you can then formulate a marketing plan to help you reach them. (For more on therapist marketing strategies, read my blog post here!)

2/ it reminds you what you have to offer

Part of your business plan is identifying which services you'll offer. On the surface, this might seem obvious-as a private practice therapist, obviously you're providing therapy services. However, there's more to it than that.

Do you offer therapy for children, adults, or both? Do you offer individual sessions, couples sessions, family therapy sessions, or group sessions? What modalities or approaches do you offer? Will you see clients in person or provide virtual therapy? How long will your sessions be?

Your offerings are unique. Taking the time to write them in your business plan can help recenter you when you lose sight of that.

3/ it gives you a structured financial plan

When you have your own counseling private practice, your cash flow will be much different than if you worked for an agency. Chances are, you won't have the same amount deposited in your bank account every Friday.

This can definitely have its benefits. As a sole practitioner, you get to make all the financial decisions. What are your rates? Will you accept insurance or cash pay only?

I recommend taking the time to make an intentional financial plan as part of your business planning process. This will ensure that you can reach your financial goals instead of just winging it and hoping for the best.

4/ it allows you to return to your business goals as needed

Your mission statement is the cornerstone of your business plan-and your practice. Like any job, having your own business isn't all rainbows and butterflies. There are times when work feels tough and times when it feels lighter-especially as a therapist.

Having a mission statement within your business plan can be incredibly grounding. When you're in a challenging season or just having a rough day, reviewing your business plan can help you remember why you started and where you want to go.

CREATING A BUSINESS PLAN FOR MENTAL HEALTH PRIVATE PRACTICE

Now that you know what they are and why they're important, it's finally time to create your own business plan! Hopefully, these prompts will get your wheels turning and help you visualize the modern private practice you want.

Again, there is no right or wrong way to make a business plan. If you'd like some structure, though, I have a private practice business plan template available as a free download here. In it, I include tons of prompts and brainstorming space to help you make your practice come to life.

what to include in a business plan for your therapy practice

Ready to dive in? Here are some of my top suggestions for things to include in your counseling private practice business plan!

1/ mission statement

Like we discussed, your mission statement is the foundation of your entire therapy practice. It encapsulates your "why": why you started your business, who you want to help, and what your goal is.

Our motivations are often complex. However, I highly recommend boiling your purpose down to one simple sentence. It gives you something to ground yourself throughout the entire process of building your practice. You may even consider keeping your mission statement somewhere you can see it often.

2/ values

I also recommend identifying your values alongside your mission statement. This can just be a bulleted list. For example, do you value accessibility? Maybe you can offer a few sliding-scale spots if so.

3/ information about your ideal clients

Your business plan should also include information about the potential clients you hope to work with. It can be difficult to narrow down your ideal client, especially if you've worked with a variety of populations in the past. However, doing so can give you a clearer picture when growing your practice.

Try to be as specific as possible. Consider their age, gender, location, and other demographics along with their problems, goals, and where they're looking for help.

4/ details of your offer(s)

Again, getting clear about what you offer can help you structure your business-and your marketing plan. Think about where, when, and how you'll meet clients. Will you offer weekly sessions or biweekly sessions?

It's also important to consider the types of therapy you'll offer. Most therapists use a variety of different approaches, but you'll likely resonate with some more than others. Do you need additional training to hone your skills in these areas? This is worth considering as you get up and running.

5/ competitive analysis

I'm a firm believer that there is room for everyone in the counseling private practice space. With that being said, it's wise to get a sense of what your competitors offer. It can help you get a sense of what's currently working in your niche-and what's not.

When thinking about competitors, take a look at their offerings and marketing strategies. What services do they provide? How are clients accessing those services? How are they reaching clients? If you can identify a gap in the market or something you might approach differently, you can use that to your competitive advantage.

6/ legal information

This isn't the most fun part of building your practice, but it's necessary. You can also work with a local attorney to help you through this process.

Start by deciding which type of business entity you'll register as. For example, I started off as a sole proprietor and then formed a Corporation as my business grew. Depending on which business entity you choose, you may also need to get an Employer Identification Number (EIN) through the IRS.

You'll also need to choose your practice's name. Check with your state registry to make sure that the name you want hasn't already been taken.

7/ finances

Finances are an important part of any business plan. Here, you'll decide what your rate is. You'll also make decisions about whether to panel with insurance companies or accept private pay only.

There is no right or wrong choice-do what aligns with your values as well as your professional and personal goals. When setting your rate, you'll also want to consider the cost of running your business, household bills, savings, and other expenses.

You can also factor in a growth plan. Will you increase your rates on a regular basis? How can you diversify your income? Of course, your practice isn't all about the money, but it's an important part of your business-and wellbeing.

8/ logistics

When developing your practice, you'll also need to consider the day-to-day logistics. What practice management software will you use? Do you need to furnish your office? Figuring out these details can help your practice run smoothly.

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GET SUPPORT WITH CREATING YOUR PRIVATE PRACTICE BUSINESS PLAN

Want personalized advice and support as you build your practice? I've helped dozens of other therapists create modern businesses through private practice coaching for therapists. If you're interested, I encourage you to reach out today.

If you’d prefer a self-paced comprehensive roadmap to building a modern private practice, check out my course The Crafted Practice (I also have an Established Therapist Toolkit for the therapist who has already built their practice and is just looking for the modern marketing and diversifying income support!)