Starting a Private Practice: 8 Tips for Psychologists

Starting a private practice was a professional aspiration of mine since I began my Ph.D. program. For me, it symbolized practicing psychology in its purest form, without the bureaucratic burdens that come from working within a hospital, clinic or school. The service rendered seemed pure and authentic, with a lucrative compensation. The flexibility and autonomy were immensely appealing.

My private practice in New York state from 2012-2018, provided with me with the opportunity to realize my goals. This opportunity has expanded into practicing psychology in Moscow, Russia, and starting Psychology Forward to provide high quality psychological services to the international community.

Along this journey mistakes was made and hard lessons were learned. It truly was trial by fire. Most graduate psychology programs will not teach the complicated business side of starting and maintaining a private practice. New psychologists to independent practice will experience a hard learning curve.

This articles seeks to provide valuable tips for psychologists interested in starting a private practice, based on my experience.

1. Begin your preparation early

Use your graduate time to network with faculty practicing psychologists in your graduate program and alumni. Take advantage of this opportunity to “pick their brains” on the business side of practicing independently. You will find that most will be very helpful. Don’t be reticent about asking about sensitive issues such as compensation, burnout, and the challenges of maintaining a practice.

The time spent in graduate school will be the training ground for developing the art of networking.


2. Be smart in your post-doctoral training

I was fortunate enough to work in a private practice to fulfill my post-doctoral licensing hours. This experience was invaluable in learning the ins and outs of the business side of private practice.

Select an experienced supervising psychologist who has experience in running a private practice. This experience may even lead to your first position in a private practice, like it did for me. Some states like New Jersey, allow pre licensed psychologists to work independently under the supervision of a licensed psychologist. Such experience afforded me the opportunity to earn income while completing my post-doctoral training.

Check the requirements for state licensing in New Jersey, here.

3. Network, Network, Network

My post-doctoral supervising psychologist was fond of saying that psychologists should network with “unabashed self-promotion”. The stumbling block for beginning psychologist is not conveying how valuable their services are. This does not suggest to be arrogant. Instead be  confident in the  promotion of your talents.

You have completed your coursework, dissertation, passed your licensing exam, and fulfilled your post-doctoral licensing hours. Relative to other professions, you have far more specialized training in terms. The time has come to disseminate your professional talents with your colleagues and community.

Effective networking involves:

  • Attending professional psychology conferences with other mental health professionals
  • Attending support groups and conferences for parents of special needs children
  • Developing relationships with hospitals, schools, and clinics. It is crucial to develop  referral sources. Other mental health professionals such as psychiatrists, social workers, and community mental health workers are essential professionals to network with. Get the word out about your practice and specialization.


4. Consider specializing

General psychology as a private practice is beyond its heyday. Like most fields, specialization is what most consumers, and in our field, clients seek. Specializing in a particular areas such as Personality Disorders, Autism, Mood Disorders will provide a specific service to the community and will help others associate you with an area of need. General practitioners are not associated with anything and fail to capitalize in niche mental health needs.


5. Recognize the advantages and disadvantages of private practice.

Private practice can be:

  • Lucrative
  • Offers flexibility
  • Creates an autonomous professional life
  • Is prestigious

On the flip side, consider the following about private practice:

  • Usually involves working weekends and nights
  • For success, psychologists must be savoy business people, knowing the ins and outs of insurance, fee collection, and complicated ethical situations such as, when clients cannot afford to pay anymore.
  • Private psychologists are only paid when a fee is collected. There are no paid holidays, sick leave, pension, or medical benefits.
  • Working independently can be isolating and like working in vacuum. One must work hard to maintain colleague support and close professional relationships.


6. Decide on managed care

Becoming a provider for insurance companies is a great way to get started in private practice. Due to cost effectiveness for clients, seeking services from an insurance provider is an option most consider. The distinct disadvantage is the compensation. A psychologist’s contracted pay will be significantly below  the full fee. For example, in 2012 Horizon Blue Cross was paying out at 92 dollars per session in an area where the average full pay  for a psychologist was roughly double than. The compensation also rarely augments, so there will be not raises from insurance companies. In order to be gained employed, a psychologist must become a volume provider which in my opinion, detracts from the full attention required to give to each client.

A second drawback of being an insurance provider is that you will not be able to charge your full fee even if a client is referred to you outside the insurance company, assuming they have health coverage from the company you are a provider for.


7. Choose the right office

In securing office space, psychologists need to consider several factors:

  • Location: choose a location that is both convenient for you and for your potential clients. In my experience, most clients are unwilling to travel more than 30 minutes for a session, unless you are a specialist.
  • When starting out, seek office space that you can pay for by the session. Many psychological and medical practices will rent space out by the day or evening. If you don’t have enough clients to fill this time slot, it will be wasted money. I was fortunate enough to find an office in my desired location where a psychologist rented out the office by the hour. The cost of rent per session will be higher, but you won’t be losing money when you haven’t filled your schedule yet.


8. Advertise

The old saying holds true to you need to spend money to make money. Psychological practice is a bit of an outlier in this regard. Most referrals come from word of mouth from other clients and mental health providers you know personally. However, times are changing and many people in search of psychological help look to the internet to find a suitable therapist.

Advertising through sites like Psychology Today and local professional affiliations are effective ways of promoting your services. Also, consider building a website and blogging on your area of expertise.


Moving forward

Starting a private practice is a big undertaking for a beginning psychologist. Fortunately, psychologist do not have to give up their day job to get started. Private practice affords flexibility and a rewarding career path. It can be quite isolating, so it is vital to stay connect with other psychologists and to seek supervision on cases when needed. This is an important ethical standard that psychologists must adhere to in order to serve our clients properly.

I hope that you found this article helpful. Working in private practice can be one of the most fulfilling roles in a psychologist career. Following these tips will help get started on what I hope is a rewarding career path.

Good luck in embarking on a rewarding professional endeavor


Respectfully submitted,

Joseph Graybill, Ph.D.





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