Update Jan-27-2022: I decided to split the original article into two parts. This second part is meant to be a resource not just for licensed therapists, but also for others starting practices as healers.
A few things in Part 1 will may be applicable to any practitioner, including business licensees and perhaps disclosure forms. I included the section on billing insurance below, because it flows better, even though that will be of more limited applicability.
Finances
Setting your rates
Know what you are worth!! Partly, this means knowing the going rate for a counselor with your level of experience. When I first wrote this article (in September 2013), I was in practice for almost two and half years, and I charged $90/hour. At the time, I knew colleagues who had been practicing for less than 18 months who had raised their rates from $90 to $100/hr. The other side of this is about how you feel about your abilities. You may feel weird about charging someone $100/hour, wondering if you are worth that much. I strongly encourage you to explore this. It may take a little experience in the chair to understand what a gift you are giving your clients, even if you are not at the level of mastery of your idealized counselor. Part of the reason this is so important is because it affects your relationship with your client. If you are constantly doubting yourself, they may pick up on that, and start to wonder if they could find a better counselor. I’m not saying their isn’t any room for doubt or questioning. Sometimes it can be useful to ask a client “how am I doing?” But when they hand you a check, if you can take it with the genuine knowledge that you helped them, they’ll get that, and that will help them want to come back.
If you are struggling with this (and I think almost every new counselor does), I encourage you to talk to your supervisor or consult group about it.
Adjusted Fee Scale
I encourage you to set sett up adjusted fees to make your services affordable to less-resourced people.
I set up a page with some tools and guidance.
When considering this, you might want to cap the number of adjusted fee clients that you take at one time. See the business plan section below.
Set up a separate bank account
You are legally required to keep your personal funds and assets separate from your business funds and assets. Talk to your bank about creating a separate business account, get checks, and a business credit card.
Track your expenses / taxes
You need to do some basic bookkeeping. When I first started, I kept a Google Doc spreadsheet with all of my transactions: client payments, rent, office supplies, marketing expenses, training/education, taxes and licenses, etc. When it comes time to do your taxes, you can break everything down into the appropriate categories.
After a few years, it made sense for me to get some better bookkeeping software, and the expense wasn’t a big deal. I have been using the Zoho Books basic plan, and I really like it.
You will probably lose money your first year (how’s that for optimism?), which is good from a tax point of view! Be sure to track all of your start-up costs. If you are a Single Member LLC, your business taxes are the same as your personal taxes, meaning if you lose money through the LLC, that comes off of your income from your soon-to-be-obselete-because-your-practice-is-doing-so-well job (right?), so you pay less taxes.
When you start making money, you will need to pay yourself. Record you transfers from your business bank account to your personal bank account as “payment to self”.
Another thing about taxes: as a business, the IRS wants you to pay estimated taxes 4 times a year. You don’t have to pay these taxes until you make a profit. Furthermore, if you don’t make any money the first tax year, you don’t have to submit your quarterly estimated taxes, because those are based off of the previous year’s income. I’m not saying this is a good idea – you may want to pay quarterly anyway, so you aren’t hit by a big tax bill when you finally add everything up at the end of the tax year. [update: my accountant files quarterly tax reports for me now, but I don’t pay anything except end-of-the-year taxes. I’m not sure what rules govern this.]
Familiarize yourself with this stuff, get a bookkeeper if you aren’t good with numbers and/or you don’t have time for bookkeeping. Another option is to use TurboTax. You’ll still have to educate yourself about the nuances of deductions and how to pay estimated taxes.
You will also have to eventually pay Washington State Excise Tax, but probably not until you start making more money than you will make in your first year. I pay a “Services and Other Activities” B&O tax at a rate of 0.015. In 2018, my business got a $530 tax credit – so if I had grossed (made before expenses) less than $35,333 I wouldn’t have to pay B&O tax (but I would still have to file). This article shows current credits.
If your business is in Seattle, you have to make over $100,000 before they start taxing you. At that point, you will probably be paying someone to do your taxes for you, so you hardly have to worry about it. 😊
Make a business plan
This might sound unappealing, but it can be worth it, and it isn’t as hard as you might image. Basically, create a spreadsheet and figure out what your monthly business costs are (including your annual costs spread out over twelve months). For example:
– rent: $250/month
– office supplies: $20/month
– licenses: $25/month
– insurance: $10/month
– supervision: $130/month per 5 clients*
*That’s a made-up figure, but it is based roughly on the idea that some supervisors ask that you spend x hours with them for every y client hours. You may have to spend more on supervision the more clients you have. Fortunately, the more clients you have, the easier it will be to pay for supervision.
So, $320/month. Then figure out how much money you need to live (personal stuff, not business expenses). Let’s say $2000/month. It’s a good idea to break this out into specifics, too. Add up those two numbers: $2320/month.
That tells you how much you will need to make each month to break even. Subtract any income from a second job, and then figure out how many client-hours you will need per month to meet this figure (subtract 20% for taxes – this is an approximation). If you have sliding scale slots, you can have estimate how many of those will be filled at what rates, and leave the highest rate as your variable. Set up the spreadsheet to multiply the client-hours per week times each of the rates, and multiply by four (4 weeks/month). For example:
– x clients/week at $100/hour
– 3 clients/week at $70/hour => $840/month
– 2 clients/week at $55/hour => $440/month
$2320 – ((840 + 440) * 0.8) = $1296
$1296 / 4 * ($100 * 0.8) = 4.1 clients per week at full rate.
(The “0.8” is because Uncle Sam takes 20%.)
So this tells you if you have 5 clients per week at your full rate, plus 5 clients at the sliding scale rates listed above, you will make enough money to live. Of course, client bases tend to ebb and flow, and you won’t have everybody paying those exact rates. Some might even pay more if you decide to offer 75-minute or longer sessions (recommended!). Plus you will probably want to save some money. So perhaps, in this example, shooting for 12-14 clients per week would be a good idea.
These numbers aren’t meant to be hard and fast, they are only meant to give you a sense of what your needs are. Once you meet your break-even point, you can begin to re-evaluate. How many clients do I really want to see a week? Some therapists see upwards of 25 or 30, and for some therapists, that is exhausting. How many sliding scale spots do you want to offer? This can change as time goes on. Do you want to reserve a spot for free clients? Keep revisiting these questions.
Billing Insurance
In order to bill insurance, you have to be paneled with an insurance company. That means you are contracted as a provider with them to provide care for their members – the contract defines the rates at which they pay out, and a bunch of legal stuff. Then you are “in network”. I believe that it is rare for an LMFTA to get paneled. I think I got lucky and got paneled with First Choice before I “dropped the A”. I think they may have been building up their provider base at the time. Maybe you can get lucky, too. I believe OneHealthPort is a good place to start looking into getting paneled with insurance companies.
Do your research. Some insurance companies are easier to work with than others. They offer different rates, and have different response times for paying you. It’s hard to find this information, so you might want to talk to some therapists who have worked with insurance companies.
If you aren’t paneled with the insurance company that your client is a member of, you can give your client a receipt (aka a “superbill”) that lists the date(s) of service, amount paid, the CPT code, a diagnosis, your NPI # and your Washington State License #. Then your client can submit that to their insurance company. You or they can find out ahead of time if their insurance plan will cover out-of-network outpatient therapy, or you and your client can wait and see how they reply to the submitted superbill/claim. The nice thing about that process is you collect the money upfront, so you don’t have to track deductibles or copays.
You could also ask your supervisor if they are willing to let you become their employee so you can bill the insurance plans they are paneled with. I’m not sure how many supervisors do that. I do know that that is often the basis for a group practice, but you often have to give them a cut (like 50%), rather than paying them by the hour (which is standard for supervision).
Google Voice
So you’ve got all your license applications submitted, and you are ready to start marketing yourself. You are going to need a way for people to get in touch with you. I recommend getting a Google Voice number. It’s basically FREE voicemail, no strings attached. For reals. With Google Voice you don’t need to expose your personal telephone number to the world.
The cool thing about Google voice is that it will transcribe voicemails. Or, at least, it will attempt to transcribe voicemails. It isn’t always accurate, but it is often entertaining. For example: “You know I left the message a good luck. Thanks, Hey Hi Mike, you’ll a pick up Latin appointment for a applesauce point okay and I Bank. If you could please keep me at all.” Hours of entertainment. Google Voice will then email and/or text you the message. There are some apps for iPhone (and Android, I’m sure) that allow you to access some more advanced features, or you can use the web interface, or just call it like a regular voicemail service. Keep in mind that if you do this, you will have confidential client information on your phone, and must protect it according to HIPAA regulations. Technically, I’m not sure if it is enough to use a lock screen, so consider this option carefully.
Using your gmail account (which is free if you don’t have one), log in to https://www.google.com/voice . You might not be able to find a number in your area code. Google adds numbers periodically, so if having the right area code is important to you, just wait a few days or weeks and check back.
Google voice has some features that allow you to mask your personal phone as your google voice number when calling out, but I never use that. After an initial client contact has been made through my google voice number, I call my clients with my cell phone. This has never been a problem, though you may feel a greater need for privacy.
A place to hang your shingle
Unless you want to take all your clients on walks around Greenlake, you will probably want to have an office space. Ask your colleagues, look on Craigslist, figure out what the going rates are. You will probably want to start with just sub-leasing a space for one or two days a week. Things to consider: do you need a waiting area? How quiet do you want the space to be? Is easy after-hours access required? Disabled access? Is a view of the entire city and surrounding countryside important? Is a window of any sort important? Will you be providing furniture? Do you want to share an office with another therapist (recommended!), or with any old professional? Will it be unbearably hot in the summer, or freezing in the winter? Obviously you’ll want something you feel comfortable in, and you don’t want to spend massive stacks of cash until your practice is more sustainable. Fortunately, you can move if things don’t work out and your sub-lease isn’t forever. You might consider NOT putting your address on your business card.
Website
The most important part about having a web site is just having a presence. You need to give people a way to contact you, so you will need, at minimum, a page that lists your name, your phone number, your email address, and it would probably be a good idea to mention that you are a mental health counselor. That’s not very effective marketing, though. Take a look at my site and a few others to get an idea of what you want to do.
One decision you need to make is whether or not you want to design and produce the site yourself, or hire a professional (or your tech-savvy teenage niece). You can get someone to help with any or all aspects of web page design. I’m not going to go into too many details here. Personally, I’m pretty good with computers, so I put this whole site together myself, using WordPress. WordPress basically allows you to create a template for all of your pages so you can add pages with ease. It is even capable of hosting a blog, as you can see. If you hire someone to set up your site, you can ask them to do it on WordPress, then in the future you can manage many changes yourself.
You’ll need to host your site somewhere. WordPress.com will do this for you, either for free or for $99/year. I recommend paying so you can get your own domain name and no ads. The free version might be a good way to explore the capabilities of WordPress.
Time to pick a clever domain name! Though something easy to write (short, no punctuation) may be preferable to something clever. Remember, sometimes you’ll have to give out your email address over the phone and you want to minimize the risk of error.
You can also host with any number of popular hosting sites. You can find hosts here. I have been using hostgator.com, and I don’t have any complaints.
When writing the copy for your web page, remember: be yourself. You might be tempted to be appear as generalist as possible so as to attract the most clients, but consider this: if you don’t let some individuality come through, you might attract clients who you aren’t going to enjoy working with.
Go back and refine your copy a few times in your first year of practice, and revisit it periodically throughout your career.
I don’t bother with contact forms. I used to publish my email in an obfuscated form, but spam bots figured that out. I don’t actually publish my email at this point, but rather use a CAPTCHA form that displays my google voice number. I figure, if you really want to talk to me, you can pick up the phone. Also, I never answer that number, I always let it go to voicemail because I get a lot of spam calls.
Make sure your web page is mobile-device friendly. Some WordPress plugins automatically reformat your page for mobile delivery.
Marketing
You will probably want to market yourself. Different folks have different philosophies on marketing, especially when it comes to budgeting. I’m not going to go into the nuances of this, but basically you’re going to want to let people know about you. As your practice builds, you will likely get more and more word-of-mouth advertising and you can eventually drop the online ads.
Online Advertising
I will recommend a few places to market yourself. I get a large portion of my clients from the Psychology Today online directory. As a new practitioner, you should be able to get six months (or a year?) free. It’s $30/month thereafter. If you can let them know I sent you, I think I get a free month. 🙂
Other resources are Theravive, and Wellness.com. If you are lucky, you can get your clients to write reviews for you on Yelp.com, though many consider it unethical to ask clients to do so.
I recommend tracking which sites your clients come to you by (I also track professional referral sources). This will come in handy when you decide which directories you want to continue to pay for.
I never got much out of Google Adwords or any sort of online advertising beyond the directories mentioned above, but then again, I didn’t spend much money on it.
Networking with professional organizations
I recommend attending Seattle Counselors Association monthly meetings. There are opportunities to introduce yourself and practice your elevator speech, mingle with other practitioners, and get continuing education credits. If you purchase an annual membership for $85, you get a directory listing on their web page and a reduced fee for meetings. Even if you aren’t in Seattle, it can be a valuable resource – Seattle-based counselors often times need to refer out to counselors in other parts of Washington.
Marketing for Introverts
One of the presentations at the Seattle Counselors Association was titled “Marketing for Introverts”. The speaker challenged the notion that introverted therapists can’t market themselves. She reminded us that we’re good at relationship building, and at attuning to and joining with others, both valuable skills for giving people a sense of who we are. As therapists, who we are in social situations isn’t far removed from who we are in the chair. You don’t have be a super-polished salesman to let people feel your presence. Just chat with people, ask questions, go out to coffee. “Networking” doesn’t have to involve the unpleasant task of putting on a mask and trying to sell something.
Consultation Groups
I think it was Catherine Johnson who said to the LIOS graduating class of 2012, “find a fierce shelter.” Gather with like-minded colleagues, at least once a month, with the intention of creating a space where you can all be lovingly supported. Find people you can trust with your darkest, most shameful secrets, because you want people you can talk to when your clients bring up your “stuff”. It’s useful to have colleagues you can consult on clients with, and it’s even more useful to work your counter-transference.
Workshops / Working on yourself
I’m something of a workshop junkie. Hakomi, Core Energetics, psychodrama, grief rituals, you name it, I’ve been there. Workshops can be a great way to network, to educate yourself, and to keep working on yourself. A teacher of mine once said that her first question when shopping for a therapist is “are you continuing to work on yourself?”
Part of being a therapist is dedicating yourself to a lifelong path of self-development. Keep learning, keep going deeper, keep meeting your shadow. Everything that you do here will benefit your clients.
I also recommend having some sort of contemplative practice. Meditate, pray, spend time alone in nature. Do what it takes to keep yourself centered and present.
Also, don’t forget, workshops are tax-deductible business expenses.
VIRTUAL MEETINGS
I do a lot of my work over Zoom these days. I’m unsure if it is HIPAA compliant. I’ve heard a number of therapists say good things about SimplePractice, not just as a telehealth platform, but as a note-taking system as well.
Pro-tip: you can set up recurring meetings on Zoom, which don’t have a defined date, but they provide a link that each client can use again and again, so you don’t have to send them new links each time you meet.
SCHEDULING
I use Google Calendar for my appointments. If you are concerned about client privacy, you might want to use client initials instead of full names (just be sure to track their initials somewhere else in case you forget).
After 10 years in practice, I finally subscribed to an online scheduling system, Calendly, and I LOVE it. It saves me so much time, especially when trying to make an appointment with a client asynchronously. The paid version is well worth it, and interfaces nicely with Google Calendar.
Other resources
12 months to your ideal private practice is supposed to be a good workbook.
Having more to do with the clinical side of things, I recommend reading Yalom’s The Gift of Therapy.
Case Lovell’s blog post on what to expect, based on a survey of new therapists: http://www.caselovellcounseling.com/2015/08/11/dont-sell-the-bike-shop/
Here’s a technical article on how to set up Google Calendar and Zapier to send email and text reminders to your clients, for free. [Update Jan 2022: I’m way more into Integromat these days, and use it to schedule Zoom meetings based off Google Calendar entries.]
Greater Seattle Therapists is a fantastic resource for marketing yourself (tastefully), finding referrals, and other resources.
Final thoughts
After spending three months volunteering at the King County Crisis Line, the director took us aside and told us something very important. He said, “the most important thing that you are providing to the callers is your self. Just by being a caring human presence, you are giving people something that they may not have in their life.”
I hope that this post was useful. Again, I welcome feedback.
