You did it! You completed graduate school, passed your tests, completed your internship, and now you are officially, independently licensed!
You are ready to start your career as a psychotherapist and want to open your own private practice! Your mind is full of ideas, your heart is racing with anticipation and excitement as you are ready to begin this new phase of your career! You can see it now, an office full of clients ready for change and eager to see you! And then it hits you...graduate school never really prepared me to be a business person/entrepreneur. The questions begin to build in your mind...
What do I do first?
How do I get started?
What do I need to establish my business?
And the list goes on...
I feel you! It can be very confusing to not know where to start and what to do. Many times, we turn to social media sites, group pages, etc. to ask for assistance.
Well look no further! This post will address some of the questions that you have regarding starting a business (yes I said business, not a private practice)! The goal is to get all of you to start treating your practice like a business.
First Things First- Business Name-
Before you can submit your application for your business with the state, you will need to have two things- a business name, and a business address. When naming your business/practice, it is important that you consider your specialty, niche, or clientele. Your business name is also akin to your brand. When people see your business name, what do you want them to know about you, your business, your services, etc.? Many practitioners use their name as the name of their business (ex. Jones Counseling). Doing so, however, does not convey what you do and what your business is about. It just says your name and that you do counseling. Rather, using a name like "HOPE Counseling" conveys a particular message to your potential client(s). Also, when choosing a business name, you have to check with your state to ensure that the business name is not already in use. For example, in the state of Texas, select Check Business Name for a free way to determine if a business name for LLC is already in use.
Just as your business name advertises to your client what you are about, so too does your location. Prior to submitting any documents to get your business registered, a business address is required. Think carefully about where you want your business to be located. Imagine what types of clients you desire to provide your services to. If, for example, you desire to work with children and families, then a location near schools or neighborhoods with young families will be desirable. Alternatively, if your desired clientele or niche happens to be adults who suffer from work related stress, then perhaps an office near major work sectors may prove prudent. Did you know that you can use a realtor to help you find your office location? Yes, you can! And there is no additional cost to you! Better yet, a commercial realtor can negotiate leases and get you better deals than you could negotiate on your own as they know the lingo (NNN vs NN; lease terms, options, etc.) and can explain these terms to you so you get the best deal possible. Also, when searching for an office location, there are more things to consider. Look at my Office Location Do's/Don'ts Infographic for details. Once you determine your location, now you are ready to submit your application to the state to form your business.
This is a tricky aspect of forming your practice. Many people stumble on this aspect. If I had it to do over again, I would have formed a PLLC (not able to do a LLC in Texas if you have a professional license), rather than a dba/Sole Proprietorship. Business structure and formation mostly addresses two things: liability and taxes (among other things). A sole proprietorship offers you no protection so if a client sues you, it will impact not just your business, but your personal finances as well (including your spouse/family, etc.) A LLC/PLLC provides limited liability (i.e., can separate business assets from personal assets and if ever sued, will only involve business assets), as its name implies, and does not require the same stringent guidelines with forming a board of directors that is involved when forming a corporation and becoming incorporated. Moreover, there are some tax advantages as well when forming your business as a LLC/PLLC that doesn't come with a Sole Proprietorship, however, some CPAs suggest that those tax advantages are not practical until your revenues reach as certain threshold (another good reason to consult with a CPA). . As I am NOT a CPA nor business attorney, I leave the specifics up to those professionals. Moreover, consulting with a CPA, business attorney, or your Small Business Administration is helpful as you determine what type of business structure is best for you.
This topic is seldom mentioned when starting a small business/private practice but it is important. This is more than the Malpractice insurance we all carry. Professional liability insurance covers the business owner in case of loss of property (i.e., computers stolen, office burned down or flooded resulting in loss of resources, etc.). Also, there are additional professional liability insurance policies that will cover you for claims arising from your staff/contractor/etc. And, if you ever decide to conduct a workshop, some venues will require that you have this same professional liability insurance and a waiver to protect them from being sued by your business. This type of liability insurance typically is used to cover businesses that are structured as a LLC, corporation, etc. (not a sole proprietor). This is another advantage to determining your business structure from the start as stated earlier, it establishes the framework for protecting yourself and your business. I did not become aware of this until this year! No one ever told me about this type of liability. I was covered for things relating to what I do as a counselor, but not for things that related to my "business" such as loss of property, property damage, etc. You can find out more about this type of insurance at CPH or at Hiscox
Now you have done it! You have started your small business. I know there are lot more things to do, such as marketing your practice which entails defining your niche and ideal client, creating your brand and logo; getting client referrals; determining fee structure; assessing private pay only vs insurance (and types of insurance to accept); hiring administrative staff/virtual assistant; and so much more.
A.P.E.X., LLC stands ready to help you iron out those details and develop a solid blueprint to help build, grow, expand, and optimize your business.
Start thinking like an entrepreneur! Contact Us Now for more details.