How to run a successful private psychology practice

The heart of a private psychology practice is therapy. Therapy is why most of us (psychologists) got into the industry and in order to run a private practice and provide quality therapy we need a full set of special tools.

Like a surgeon operating on a patient needs the support of an entire team—from the nurses and anesthetists to the catering staff and the rehabilitation team—the psychologist needs her team as well.

In our practice we utilize a range of systems and tools to allow psychologists to focus on therapy, not the administration.

Below are some things I believe are essential to running a successful practice (Note: I have left out the names of tools we use because they range so much depending on what you need):

Before appointment:

Calendar management — Your appointment calendar is the backbone of your business. If you are booking multiple appointments throughout the day, you want something that is fast, reliable and available to access anywhere.

Advertising — In order to be able to provide therapy you need clients. There are many options—too many to list—and plenty of businesses ready to sell you advertising services. The absolute minimum should be a decent website and at least one way to generate inquiries. (*Word of advise: Get at least some basic education in the type of advertising you are running. Advertisers don’t care about your business as much as you do.)

Data management / filing system — Go electronic! When I started Strategic Psychology I bought a big filing cabinet, manila folders and LOTS of paper. Since those early days we’ve moved everything online in ‘the cloud’.

Appointment reminders — Clients who don’t show up still take up that appointment slot for someone else in need. Plus, it also costs you money when you aren’t seeing a client. An appointment reminder will help reduce some of those ‘no shows’. You can do this manually—email and SMS—or invest in a tool that does it for you.

Missed appointments — Who follows up with clients when they miss an appointment? In a solo practice it will be the psychologist :( In a bigger practice I recommend it be somebody else. (In my practice we have three admin staff so psychologists can focus on therapy)

Mental Health Care Plans and referrals — This can be a HUGE time suck. Chasing MHCPs from doctors or referral letters from insurance companies is something that can take hours each week. Even if a client has a MHCP sometime they forget it! As soon as possible find someone to do this for you.

Reception — How clients are welcomed to your practice is important. Small things can make a big difference especially when a client is seeing a psychologist for the first time. We offer freshly-ground coffee, tea and water.

The appointment:

Therapy — This is the fun bit! You know what to do (If you are interested in learning Acceptance and Commitment Therapy I have a free training here)

Session notes — Create a file naming convention for your folders and files so you can easily find what you are looking for in the future. This is especially important if you have a goal to grow your practice.

Consulting room — Consider the environment you provide your client. A clean, comfortable environment and chairs is the bare minimum. (Also, don’t eat hot food in your room as it can leave a smell!)

After the appointment:

Payments and receipts — If you are the one taking payments then be sure to allow time for this. If possible, get somebody else to do this. Your sessions should more than cover the cost of basic admin. If you are just starting out, then you may need to do it all to begin with and that’s okay.

Medicare rebates — Decide if you will integrate Medicare rebates with your payment system or if the client will need to get their rebate from a Medicare office.

Subpoenas — If you receive a subpoena and your client files are well organized, your life will be good. If files are here, there and everywhere, get ready for a nightmare!

Appointment follow-ups — Therapy is not a one-time ‘fix it’ session. The number of times you meet with a client varies significantly so make sure to have a process in place to follow up. It’s often the case that a client would like to see you again but hasn’t booked a following appointment for any number of reasons. (Tip: Don’t send text messages from your personal mobile phone.)

Other important things to consider:

Having your own private practice can be amazing—I love it—but I would also caution to consider the many other aspects of a running a business before you start:

Room hire costs — Calculate the cost of your practice. Everything from the actual cost of room and buying furniture to paying for reception services if they are offered.

Competition — If you are in a shared practice with other independent psychologists remember that you are running your own business and some may be competitors. Personally, I believe this is a flawed model and mostly benefits the building / business owner essentially renting out rooms.

Holidays and sick pay — Yes, there are 12 months in the year, but 4 weeks are holidays, 2 weeks are sick leave and 2 more weeks of public holidays. Factor into that you can only bill 10 months per year.

Taxes and superannuation — Wha… !? [crickets] … Yes, taxes. They need to be allocated for and paid so get a good accountant for your business. Superannuation too. Get professional advice for both, it’s important.

Reduced clinical experience — All the “business stuff” will take you away from therapy. Really consider the cost of your reduced clinical experience when starting your own private practice.

Final thoughts:

Your own private practice can be rewarding and fun but be prepared to put in the work.

For the first few years of Strategic Psychology I spent 60 to 80 hours per week grinding it out. Early mornings, late nights, Saturdays—and sometimes admin on Sundays—was normal.

If you are ready to start your own private practice my biggest recommendation is to invest the time to learn the many aspects of running a business. Because therapy—what we psychologists “do”—is just a part of the practice.

I hope this has been helpful :)

Nesh Nikolic
Clinical Psychologist
Managing Director at Strategic Psychology