Starting a Private Practice from Scratch | 6 Steps to Start a Private Practice

I'm going to be taking you through a list of 6 things that you should do when you're starting out in Private Practice, so that you can confidently start seeing clients.

One assumption I'm going to make, before we dive in, is that you've already done all of your training and anything that you need to do to become a psychotherapist or a counsellor, as this is not my area of expertise.

I am based in the UK, so some of the steps I talk about will be specific to therapists who are starting a practice in the UK, however, wherever you are in the world, I'm sure that these steps will be useful for you. 

Choose a Legal Structure

The first thing you want to do is decide on a legal structure, which means whether you're going to set up as a Sole Trader or a Limited Company.

If you are just getting started in Private Practice it's really easy to just set yourself up as a Sole Trader. All you would need to do is register and you'll be able to get started in business right away! You can actually start practising and seeing clients before you even set yourself up, but you must register within a certain time frame of starting your business.

Most of the clients I work for have chosen that structure because as a Sole Trader you can do your self-assessment yourself each year so it can save you a lot of money.

Now, I am not a financial advisor,  but as far as I know there is no real benefit to setting up as a Limited Company before you start earning a certain amount of money, so this is why most therapists choose to go down the Sole Trader route.

Once you have chosen what legal structure you want to use you will need to register with the HMRC if you are in the UK. You will receive an Unique Taxpayer Reference number, often called a UTR number. This can take a couple of weeks to get sent to you so I would make sure that that is done sooner rather than later.

Choose a Name

If you are setting yourself up as a Limited Company you would register that company name when you set yourself up. As a Sole Trader you don’t need to register your business name with the HMRC, as long as you personally are registered. What I suggest you do is run the name that you're thinking of for your practice through a few different places. 

Firstly, check Companies House so that you can see if there is another Limited Company with your name, because if there is you aren't going to be able to trade with that name. Even if you're a Sole Trader, if the Limited Company already exists they're more than likely already going to have a domain in that name, and that will mean you won’t be able to use the name online. 

Secondly check the domain itself. I suggest you go to GoDaddy and type in the domain you want and see if it’s available. If it's not available there may be alternatives, so maybe yourname.com isn't available, but maybe yourname.co.uk is and then you can choose whether you want to use that or whether you'd prefer to have a domain which has the .com 

Thirdly check the social media handles. You may not want to start a business page on Facebook or an Instagram account, you may not even want to have LinkedIn or YouTube channel, however you don't know what's going to happen in the future so being able to use your business name as a Facebook page and an Instagram page can be really useful. You can set those pages up so that you keep that name but don't use it. It's always a good idea when you choose a name for your business just to buy the domain and take all of the social media handles that you may need in the future.

Business Address

When it comes to registering a business address you have a few options. If you have decided to rent a room you should be able to use that address as your business address. You will just need to ask the person that you're leasing the room from if that's ok. If you are solely working from home you may want to use your home address, but depending on where you're registering this, people may be able to find out your address which you may not want.

Another option for you when you are solely working from home is using your accountant's address, if you have one. Lots of accountants let you do this. Or if you have a friend that has a brick and mortar business maybe they'll let you use their address as your business address. 

You may also want to consider setting up a virtual office. I was actually doing some research into this for my own business and found a great website where you can buy an address. It's relatively cheap to do and as long as you don't need actual post being sent to the address, other than things from HMRC and your bank it can be well worth it.

Business Bank Account

You really don't want to be confusing your personal finances with your business finances, even if you're a Sole Trader! It’s going to make doing your Self Assessment so much easier if you have a separate bank account. You'll always know how much cash flow you have because you can see what's in your bank account and you're not muddy in the water with mortgage payments and shopping. 

It's really easy to set up a bank account nowadays. I highly recommend Starling. They're so easy to use you can set up an account in five minutes online. Everything is done through an app on your phone and they notify you every time a payment comes in or goes out of your account via a notification which is fantastic. I love feeling like I have control over my finances.

It's also so easy to make payments, set up standing orders and send yourself statements whenever you want so I highly recommend looking into Starling. I'm not an affiliate for them, I'm just recommending them from personal experience.

You want to make sure that all of your payments that are specifically for your practice are coming out of that business bank account. So if you have to pay for room rent, if you have to pay for any directory listings, if you have to pay for anything for your office, you can put that on your business expenses. This can also reduce the amount of tax that you're going to pay at the end of the year. 

Business Insurance

Each business is going to be different, depending on whether clients are coming to your home or a premises that you're leasing or whether you're just seeing them online, there will be a minimum amount of insurance that you need. I would definitely encourage you to do your research into what insurance is right for you. There are a few insurers that do work specifically with therapists such as Balens, Hiscox  and Towergate.

It's a really good idea to speak to other therapists that you know, in real life or online,  to ask about insurance because it's something that's really important that you get sorted. It's a relatively low cost each month or each year, but it's great for your peace of mind.

Registering with ICO

If you are in the UK you also need to register with the ICO. This is for GDPR and data protection. You will be handling clients personal data. You'll be taking their GP details, their date of birth and their addresses so you will need to have that protection and assurance, so that, if there's a data breach, you can follow the protocols as per the ICO's guidelines.

Conclusion

To help with all of this I have a Private Practice Business Setup Guide which goes through everything I've talked about, in a little bit more detail and with lots of links. You can just go through the checklist and do one thing at a time and hopefully you won't feel so overwhelmed when starting your Private Practice. 

All you need to worry about then, is your clients!