How to Start a Private Practice as a Therapist: Lessons from Nearly 20 Years In

Most therapists leave graduate school knowing how to sit with a client in crisis and not knowing what a quarterly tax payment is. Travis Heath, PhD, host of the Psychotherapy.net podcast Therapist Confidential, learned about quarterly taxes from his mother, years after he’d started seeing clients. He describes his early private practice as jumping off a cliff and building wings on the way down. He had a generous mentor who let him use her office for almost nothing, and he started with two or three clients while holding an academic job that covered his salary and health insurance. It worked, but he’s the first to say he was teaching himself on the fly. 

That experience is common. Gordon Brewer, LMFT, has been in private practice since 2006 and now leads Kingsport Counseling Associates in Northeast Tennessee, a group practice with five clinicians and one administrative staff member. He hosts The Practice of Therapy podcast, which he started in 2017, and consults with clinicians who are launching or growing a practice. On a recent episode of Therapist Confidential, he and Travis talked through what private practice actually requires, from finances and referrals to money mindset and burnout. 

What does starting a private practice actually involve? 

Starting a private practice means going from employee to business owner, with all the financial, marketing, and administrative responsibility that comes with it. Brewer notes that graduate programs do a good job teaching clinical skills, but when he trained there was no coursework at all on how to run a practice. He believes the more useful way to think about it is: you are starting a business, and that includes the legal and ethical responsibilities of owning one. 

Many clinicians also carry a quiet belief that business and compassionate care don’t belong together, as if treating the work as a business makes it less human. Brewer disagrees. In his experience, the freedom of private practice is often what allows clinicians to sharpen their clinical skills and focus on the specialty they care about most, and that focus is one of the key factors in building a successful practice. 

Should you quit your agency job to start a private practice? 

Autonomy is a big part of the appeal, especially for clinicians coming out of agency or nonprofit work. “You don’t have too much control over your caseloads and also just the types of clients that you see,” Brewer says of agency settings. “You really kind of get it all and it gets very overwhelming very quickly.” 

Brewer’s first piece of advice is not to quit your day job too quickly. A common assumption, he says, is that you can hang out a shingle, clients will arrive on their own, and your agency salary will carry over without much effort. The reality is more complicated because moving from employee to self-employed changes how you handle taxes, where your referrals come from, and how many clients you need to see just to match what you were earning. 

Before making the leap, Brewer encourages clinicians to get clear on their financial goals and their reasons for going into private practice at all. He points out that private practice can look more glamorous from the outside than it really is, since much of the work happens behind the scenes where agency clinicians rarely see it. Having clarity about what you expect to gain, and a plan for how you’ll get there, makes the transition much steadier. 

For many clinicians, the lower-risk path is to start part time or on the side and build from there. That approach removes the pressure of needing enough money on hand to cover your life while the practice grows. For another experienced perspective on this stage, see our interview with Lynn Grodzki on building a successful private practice. 

How much money should you have saved before starting a private practice? 

Brewer recommends at least three months of reserves, and ideally six months to a year, enough to cover both your personal expenses and your practice overhead even if you saw no clients during that time. He suggests building those reserves from the very beginning, even while the practice is small. Every practice goes through lulls and slower referral seasons, and reserves are what carry you through them without panic. 

For clinicians who start without much of a financial cushion, his message is that you can still build from small to big. “Incremental change is more sustainable than huge leaping changes,” he says. That might mean focusing on seeing a certain number of clients each day, making sure that level of work is profitable, and growing deliberately from there, while steering clear of the self-defeating habits covered in Richard B. Joelson’s article Critical Tips for Building and Maintaining Your Private Practice. 

Should therapists take insurance or go private pay? 

Each model involves a real tradeoff, and Brewer believes a hybrid of the two is a viable option that many clinicians overlook. With private pay, you set your own fee and clients pay you directly, which is a simple way to run a practice. The downside is that you have to work harder on marketing so the right clients can find you, including clients who can afford to pay out of pocket. 

Insurance panels work the other way around. They provide a built-in referral source, since many clients begin by searching for providers who are in network with their plan. The cost is that the insurance company decides what you’re paid. Insurance billing also typically requires a diagnosis and supporting documentation, which puts diagnostic interviewing and treatment planning at the center of the work. 

Brewer’s own practice uses a hybrid model that accepts both insurance and private pay clients. Insurance helps take the pressure off by keeping client flow steadier, while private pay gives the practice some control over income. Conversely, Travis has never taken insurance and acknowledges that it likely slowed his growth in the early years, though much of his referral base came through third-party payment from the criminal legal system instead. This shows how many different ways a practice can come together. 

How long does it take to build a private practice? 

By Brewer’s estimate, most clinicians need about two years before their practice feels fully established, with steady referrals coming in without a great deal of effort. That timeline holds whichever payment model you choose. Joining insurance panels helps, but as Brewer puts it, you don’t just flip a switch and suddenly have a full caseload. 

Travis sees this as a tension of the current moment. People increasingly expect instant results, and large tech platforms now make it possible to start seeing clients almost immediately, something that wasn’t an option twenty years ago. Both hosts note these platforms raise their own legal and ethical questions about client care and how therapists are paid. Yet in Travis’s experience, the strategies that work best over the long run, especially building a reputation through word of mouth, are the ones that require the most patience. 

How do therapists get clients in private practice? 

Brewer suggests replacing the idea of marketing with the idea of positioning, which means making it easy for the people who need your specific help to find you. Many clinicians feel an “ick factor” around marketing because it seems salesy or self-promotional. Thinking of it as helping the right clients locate you tends to feel more consistent with why most of us entered this work. 

Positioning starts with a niche. Brewer recommends identifying the clients and issues you most enjoy working with, then figuring out where those people tend to look for help. That can include social media, professional directories like Psychology Today, community workshops, and podcasts or other media. Travis notes that marketing often happens in ways people don’t recognize as marketing at all. For many clinicians, ongoing training in a specialty such as trauma, couples therapy, or child therapy is part of what makes a niche credible. 

Word of mouth is still one of the strongest referral sources, both from friends of current clients and from former clients who recommend you. Travis compares it to Field of Dreams: do good work and people will come. Brewer agrees and adds one important caveat. “You can build it, but you also have to tell them about it for them to come.” For more on this, see 5 Time-Tested Methods for Attracting New Referrals and Building Your Brand. 

Brewer also sees reasons for optimism about demand. He believes the stigma around mental health care has dropped considerably in recent years, to the point that having a therapist is something people now talk about openly. In his view, there will never be a shortage of people who need what therapists offer, so the real work is making sure they know you exist. 

How do you get comfortable charging for therapy? 

Getting comfortable with your fee usually means examining the beliefs about money you grew up with. Clinicians coming from agencies often never handled payment directly, since the front desk took care of it and they simply received a salary. Yet once a specific dollar amount is attached to a session, Travis says, many therapists start asking whether they are really worth it, even when they know they do good work. 

Brewer hears this constantly and relates to it personally. He grew up in a family where money always seemed scarce, and he says many clinicians carry similar messages, sometimes along with real shame about charging for their work. He describes it as a close relative of imposter syndrome, and something worth working through in your own personal work. 

He offers two reframes that help. First, your fee is what sustains your ability to serve people. It has to cover not only what you pay yourself but also rent, your website, and in a group practice, payroll, and the like. Second, the fear that clients don’t want to pay us is largely a myth. In Brewer’s experience clients generally want to pay for good care and recognize that therapists deserve to be paid for what they do. 

What separates therapists who succeed in private practice from those who struggle? 

The clearest difference Brewer sees is whether a clinician knows their numbers. You don’t need to be a CPA, he says, but you do need a working grasp of bookkeeping, tracking income and expenses, and understanding profit and loss. Brewer describes himself as not naturally a numbers person and says that if he could learn it, anyone can, and that understanding the numbers takes away much of the anxiety around them. 

For clinicians looking for a place to begin, Brewer recommends Profit First by Mike Michalowicz, a book that shaped how he runs his own practice. He also recommends its therapist-specific follow-up, Profit First for Therapists, by Julie Herres of Green Oak Accounting. Both focus on building a practice that stays profitable rather than one that simply stays busy. 

As a practice grows, Brewer adds, clinicians face another decision about how much clinical work they want to do relative to administrative work. Weighing those two sides against each other goes a long way in shaping a practice that is both sustainable and satisfying. Setting realistic expectations for yourself early makes those decisions easier later. 

How can private practice therapists avoid burnout? 

Brewer points to two protective factors: staying connected to colleagues and delegating tasks that don’t require you. He describes burnout as being overwhelmed, trying to juggle too much, and living in a near-constant state of anxiety about the practice. Solo practitioners are especially at risk, because it is easy to go long stretches without meaningful interaction with other clinicians, and regular consultation with peers is one way to stay connected. 

His most practical suggestion is to hire a virtual assistant or intake coordinator to answer phones and schedule clients. Time spent returning calls and managing the calendar doesn’t generate income, and it pulls energy away from clinical work. Brewer calls it one of the easiest places to start, and he also notes that AI tools are beginning to offer new ways to manage parts of practice administration. 

Brewer has seen the value of support firsthand. After his wife passed away in 2023 following a long illness, he needed to step back from his practice for a time. Having already delegated responsibilities to his team, along with the support of close friends in his life outside the office, is what allowed the practice to keep running. Travis’s concurs in the importance of  putting that kind of support in place before you need it. 

Frequently asked questions about starting a private practice 

How long does it take to build a therapy private practice?  

Gordon Brewer, LMFT, estimates that most clinicians need about two years before their practice feels fully established with steady referrals. That timeline applies whether you accept insurance, private pay, or both. Starting part time while keeping a salaried position can make those early years far less stressful. 

How much should a therapist save before starting a private practice?  

Brewer recommends at least three months of reserves and ideally six months to a year. That cushion should cover both personal living expenses and practice overhead, even if you saw no clients during that period. Building reserves from the start helps you ride out the slow seasons every practice experiences. 

Is it better to accept insurance or private pay in private practice?  

Insurance provides a built-in referral source, but the insurer sets your rate. Private pay lets you set your own fee, but it requires more marketing to reach clients who can pay out of pocket. Many practices, including Brewer’s, use a hybrid model that accepts both. 

What is the first thing a therapist should outsource in private practice?  

Brewer suggests starting with a virtual assistant or intake coordinator to manage phone calls and scheduling. That time doesn’t generate income, and delegating it frees you to focus on clinical work. It also reduces the overwhelm that often leads to burnout. 

Keep learning 

The full conversation with Gordon Brewer is available on Therapist Confidential, where he and Travis go deeper into telehealth, the rise of therapy platforms, and what Brewer has learned from hosting hundreds of podcast episodes. It’s a thoughtful listen for anyone considering private practice or already building one. If telehealth is part of your plans, our course on Telehealth: Legal and Ethical Issues and the Perspectives piece The Pros and Cons of Remote Therapy are good next reads. 

Growing a practice also means continuing to grow as a clinician. Psychotherapy.net offers on-demand CE built around real therapy demonstrations, so you can learn from master clinicians in session on your own time. 

Editor’s Note: This article was developed from a conversation originally featured on the Psychotherapy.net Therapist Confidential podcast. AI tools assisted with transcription and editing, and all content was reviewed by the Psychotherapy.net editorial team.