Starting a therapy group practice can be incredibly rewarding, from both a business and a financial standpoint. Perhaps even more rewarding, though, is the experience of building and leading a team of therapists – and, by extension, touching the lives of each of their clients. By starting a group practice, you have the opportunity to create a work atmosphere that allows therapists to thrive, be cared for, and feel good about the work they do. This is especially impactful for clinicians who are early in their career, and may have been through demoralizing overwork at an agency or in the field.
That said, building, growing, and managing a group practice requires a completely different skillset than managing your own solo private practice. With a larger team, there’s more responsibility – not only do you support a larger practice caseload, you also support your staff and their needs!
If you are interested in growing your practice, here are 20 steps to follow to make it easier for you to succeed. We start with the “business-y” aspects of setting up a therapy group practice, and then we share tips on building your team. Ready, set, grow!
1. Understand your personal “why”
Before you even begin the work of starting a group practice, reflect on your why. Why do you want to run a group practice? What goal or mission will sustain you through the hard work? Deeply understanding your why in the face of the amount of effort it takes to set up, run, and grow a group practice will help clarify whether this is a good idea for you to pursue at this time, and also help you keep going when the day-to-day of business management gets tough.
Here are some reasons to start a group practice:
- To serve more people in your community, whether through increased affordability of sessions, diversity of clinicians, or greater range of specialization and therapy modalities
- To have diversity of work, delegate administrative work, and decrease your personal clinical burnout.
- To flex your business acumen and increase your earning potential.
- To mentor other therapists, especially early-career clinicians, and build your dream work culture for employees
To clarify your personal drivers, try using tools like the Values Clarification Exercise or follow these steps to identify your purpose. Throughout this reflection process, stoke your motivational fire and feel good about what you decide! It’s an exciting idea and while it takes a huge amount of forethought, being intentional about your mission will help you pull through the first several steps of starting a group practice.
2. Assess whether you’ll enjoy managing a group practice
Consider the realities and responsibilities it takes to manage a successful group practice and ask yourself if you will enjoy the work. You’ll need to:
- Build systems for intake and discharge processes, documentation, accounting, invoicing and payments, cancellations, fees.
- Manage marketing for not just yourself but several other people – for a group practice, personal connections might not be the only way you’ll fill your caseloads.
- Recruit, interview, hire, negotiate salaries, onboard, train, supervise, and let go of employees or contractors.
- Set up robust legal structures and financial processes, including accounting and bookkeeping.
- Be comfortable with the responsibility over someone else’s livelihood. By having a team, your practice’s financials don’t just impact you – the clinicians working for you are also relying on you to make ends meet.
- Figure out how you manage your team, how everyone communicates, and nurture a culture where individual clinicians can thrive.
While some of the more administrative work may eventually be delegated to an office manager or virtual assistant, you’ll likely be the one doing all of this at the beginning. Even if you can afford support from the get-go, you’re likely to be able to best build systems and teach others when you’ve done it yourself first.
Talk with others who have started group practices and hear what their experiences have been like to get a fuller pictures and make an informed decision as to whether the day-to-day of managing a group practice appeal to you.
3. Calculate if starting a group practice is financially beneficial
Now that you’ve reflected on your motivations, it’s time to consider the practical side of starting a group practice – including the financials. You might think that adding more therapists means seeing more clients, which means more profit. While that is true to some extent, it’s also important to consider the administrative costs that lowers each of your clinicians’ return on investment (ROI). Finding a balance is important to building a sustainable path to growth.
At the most simple level, you can think of group practice financials as:
Income your clinicians bring in (determined by session fee, number of clinicians, number of sessions)
– Expenses (payroll, practice management tools, marketing etc.)
= Profit for you and your practice
Consider adding another therapist to your staff as an example. If this person sees 20 clients per week at $150 per session, that’s $9,000 of income for your practice per month. If you pay this new clinician $100 per session, then you’re left with a $50 profit per session, or $3,000 of profit per month. However, any practice management tools you use (such as SimplePractice), marketing investments you make to help fill their caseload, and any supervision time you personally put into supporting the clinician (which potentially means less clinical time for you) take away from this overall profit.
Here are some of the factors that determine the income your practice can generate:
- How many clinicians you want to employ
- How many clients your clinicians see per week
- Session fee per client
- Whether your clinicians are in-network or out-of-network
- Any additional offerings your practice provides, such as therapy groups and support groups
Here are some of the expenses to consider when starting a group practice:
- Billing and practice management tools (billing, therapy notes, scheduling)
- Marketing tools and services (website hosting and creation, online directories, online advertising, business cards)
- Office space
- Legal and accounting costs
- Payroll tools
- Your time, including time you spend supervising your clinicians, completing administrative work, managing employees, and learning about business (all of which take away from your own clinical work and income)
The ultimate goal is that by combining the administrative effort, you can employ more therapists and therefore see more clients — however, note that it may take a bit of time to get to that point if you’re starting your group practice from the very beginning.
Don’t forget to lose sight of how much money you ultimately want to make as well; while your primary motivation for starting a group practice may not be to make money, if you are financially unable to support yourself, the practice will close and your team will unfortunately need to look for other positions. And be sure to pay your therapists what they deserve, too – remember, you want to build a supported team who feels comfortable in their work to avoid high turnover or burn out!
For a more comprehensive picture of private practice ROI, use Zencare’s Therapist Session Fee Calculator.
4. Consider what business model you want to set up
There are a few different options when it comes to the business model of your group practice: sublet or shared office space, contracted or employee providers. Each comes with their own pros and cons, so it’s important to weigh these three options before starting your practice:
- Sublet or shared office space: This means that each therapist is technically running their own private therapy practice; however, everyone pays for the administrative costs, including rent. A therapist who partakes in this type of group practice will continue to complete his or her own billing, fee setting, and intakes.
- Contracted providers: In this structure, you write out a contract that explicitly states how much money the therapist will make per session and the expectations of both parties. Contracted therapists are not employees and will not be taxed as such – and also will not be eligible for employee benefits such as healthcare. The contract will state what percentage of the session fee the therapist receives, while the rest goes to the practice. Contracted therapists are responsible for setting their own hours and providing their own materials such as business cards or forms.
- Employee providers: This is the most complicated business model to follow as a group practice; however it also gives you the opportunity to be more involved in your therapists’ work. As employees, therapists receive a salary and benefits, regardless of how many clients they see each week. As their employer, you’ll be able to set the rules, expectations, and practice guidelines for your team. Because of state and federal requirements to have employees, you will likely have more paperwork. Don’t let this scare you: you’ll also provide your staff with the benefits they need to feel secure in their work.
Depending on what support you offer your clinicians, you may need to structure your practice so that your clinicians are employees, rather than contractors. Be sure to consult with a legal advisor familiar with therapy practices before setting up your business; we know of practices that have had to change employee structures after opening their practice, and that can be a headache!
5. Create a vision board
Now that you know what type of business model you’ll follow, it’s time to consider how you would like your practice to look. Creating a vision board is an excellent way to think through the various aspects of your new business, including your role in it.
Ask yourself the following questions and dream of what ideally your practice will run:
- What’s unique about your practice? Will you specialize in any issue or therapy modality?
- What is your practice’s mission statement? Do you have a personal mission statement as the leader of your business?
- What type of clinicians will work in your practice? What special skills will they bring? How much experience do they have? What identities are important to represent and serve in your practice? Will clinicians offer sessions in-person or online (or both)?
- What will your role be in the group practice? Will you handle all of the administrative work or will your clinicians also be responsible for some administrative work? Will you offer supervision? What type of manager would you like to be?
Thinking through these questions will help you brainstorm the possibilities for your group practice – and hopefully get you even more excited about what you’re doing! As the creator of your group practice, you have control over what you build.
6. Build a business plan
Now that you’ve done quite a bit of pre-work in figuring out what you want your group practice to look like, it’s time to get nitty-gritty with a business plan. A business plan includes the specific practice size including how many clients you see and how many therapists you hire, as well as your mission and what services you will offer. It also analyzes the therapy market in your geography by sharing who your competitors are and how they run their businesses. Make a plan for funding, especially if you are seeking outside funding to cover startup costs, and project your earnings for the first few years. Write out your plans as the manager and the roles for each person on your team.
Putting these details down on paper is a great way to solidify your ideas into actionable steps. It will also be helpful when speaking about your group practice to investors, your bank, or others in your community who offer support.
7. Set up your legal entity
Setting up your legal entity makes your group practice official – hooray! It’s a big step that takes a big decision: LLC or S Corporation?
An LLC is a business recognized by the state. The owner or owners of the LLC pay a self-employment tax and include the financials of the group practice on a separate tax return than their personal tax returns, which decreases liability. An LLC becomes more complicated if your practice is in more than one state, a consideration for group practices providing teletherapy in multiple states.
An S Corporation requires there to be a board of directors that make decisions for the company and oversee the daily management of the practice. As an owner of an S Corporation, you get taxed as if you were an employee of the company, which means that you are liable for the financial health of the group practice. However, an upside of having an S Corporation is that it is easier to gain shareholders or go public, if that’s your goal.
Whichever you choose, be sure to read up on your state’s requirements and policies for setting up a business and what makes sense for the type of group practice you hope to build.
8. Determine your fee and compensation structure
Next, determine your fee and compensation structure by figuring out if you’ll accept self-pay and/or insurance from your clients. Self-pay will most likely be the most profitable option; however, if your mission is to increase accessibility to care, or you want to easily and quickly fill your clinicians’ caseloads, taking insurance will help you achieve these goals. If you do decide to take insurance, there can be a hefty administrative load (including hiring a biller), but it can open the doors to a huge prospective client pool.
9. Decide what to do about office space
Depending on your current situation, you might be looking for an upgraded space with multiple therapy offices to accommodate a larger team. You may decide to start with one space and move to another when you’ve hit a certain benchmark. Creative ways to make a smaller space work include rotating the room assignment amongst your team, spreading your hours out over the day, and hiring just a few therapists at the beginning.
Another creative way to see more clients is to offer online sessions, so therapists can see clients from their homes instead of the office.
10. Figure out your marketing and branding strategy
You may have already thought of a name or an aesthetic through your brainstorming – creativity pays off when it comes to marketing and branding strategy! When determining your group practice’s name, make sure there are no other businesses (especially within the therapy sector!) with the same name to avoid confusion. To brainstorm possibilities, think of your mission statement, your geography, and your target population – finding key words will help prospective clients find your practice and immediately pick up on your intended branding! You might want to hire a graphic designer too to come up with a corresponding logo.
After you’ve decided upon a stellar name, it’s time to set up your website. Check if you’re able to buy the .com domain for that business name and stay away from using hyphens or numbers in your URL, as that tends to confuse prospective clients. Consider hiring a website designer to help you create a simple yet aesthetically-pleasing space to share your information. If you aren’t yet ready to get your own website, utilize online therapy directories – like Zencare!
Once you have an online presence, think through where you’ll market your services, how often you’ll advertise, and your ultimate goals when it comes to attracting new clients. Here are some additional resources that may be helpful:
11. Make sure your finances and accounting are in order
Finding a method for accounting and managing your finances will become increasingly important as you grow your practice. Hiring an effective accountant will make it so much easier to maintain bookkeeping and file end-of-year taxes. Often, practice owners will try to save money by completing the accounting themselves – only to become overwhelmed with the responsibilities of the role. An accountant will also be able to help you think through different costs and profits to ensure you’re running your business as efficiently as possible.
Having a source of savings is ideal when starting any business – something to tap into if needed, especially as unexpected costs arise. Once your client caseload has increased and your income steadies, you’ll be able to step back from placing your funds in savings and hopefully reduce your stress levels. Money can always be anxiety-inducing (especially in starting your own business!) but there are great supports out there to help.
12. Ensure your HIPAA items are set up
As with any therapy or medical practice, following the federal and state laws is mandatory. When there are multiple people using the same facilities and tools, it’s easier to have a HIPAA violation. Read up on HIPAA policy, and ask your therapists to take a course to make sure they’re covered. Invest in an Electronic Health Record (EHR) system for session notes, intake interviews, termination documents, and more to stay organized and cooperative with the law.
Grow Your Practice With Zencare!
We’re looking for clinically excellent and compassionate therapists and psychiatrists to refer clients to. We’d love to learn about your practice!
For whatever business or practice need you have, there is likely a management tool to help! Here are a few that might be useful in getting your practice off the ground:
- SimplePractice – For billing, notes, and documentation. Zencare has a referral link that can get you a 30 day trial!
- NirvanaHealth – For out-of-network reimbursement work. Zencare also has a referral link for you to use and get $29 off monthly subscription fee indefinitely.
- Slack – For team communication
- Google Workspace (formally known as Google Suite) – For email, document creation, storage, and other purposes. Google Workspace also signs HIPAA BAA forms!
- Zencare – For marketing. On Zencare, you can create a group practice profile to feature all your clinicians, including professional headshots that you can use on personal website without breaking the bank
- Gusto – For payroll, contractor payments, and more. We use it internally at Zencare and they take care of a ridiculous amount of tax and other paperwork, it’s very much worth it.
- Moo – For business cards, flyers, pamphlets. They make it super easy to design and order nice looking cards! Use our referral link for 25% off.
14. Learn how to hire and build a hiring process – then hire!
Building your team can be one of the most exciting parts of setting up a group practice – these are going to be the people that you rely on for so many things, including personal support and morale! Once you know how many therapists you want to hire, you’re ready to start the hiring process.
Thinking ahead and being intentional about your processes always pays off! Consider what types of therapists you hope to hire. Use the numerous resources online about best hiring practices and make them unique to your practice, goals, and mission. A great read to help you think through these things is Who: The A Method for Hiring by Randy Street (read our review). Once you’ve determined what you’re looking for, create a hiring process that includes an application, a multi-step interview process, and reference checks.
When you’re interviewing candidates, be sure to ask about their career goals, professional strengths, boundaries in terms of professional work, and past experiences with supervisors or bosses. Ask about their previous roles, including what accomplishments they’re most proud of, where they had low points, and how they deal with burn out.
A lot of this process will differ individual-by-individual, but it is important to remember that you are a clinician – you know how to read people and ask the important questions. Trust yourself to know what’s a good answer and what is not — and what will benefit your practice in the long term.
15. Be very clear in your offer
When you find the right person or people, write out an offer letter expressing your intent to hire them and why you believe they’re a great fit for your practice. In the letter, outline all compensation including benefits. Once they accept, send them the legal paperwork for completion and signature. Work with a lawyer so you can have peace of mind that you’ve sent the correct and necessary formal paperwork.
It’s important to set clear expectations with each new hire regarding their responsibilities, the onboarding process, their expected caseload, and compensation from the very beginning. As a leader, be sure to have straightforward communication and set the tone for the relationship. To build rapport, share your practice vision with them, including your dreams for the team and the work that you do. It’s an exciting time for your practice (and your new team member!) and by working together, you’re both reaching for goals and shaping your work culture.
16. Determine your intake process
Ready to start taking on clients? Determine your intake processes so you can hit the ground running. Ask yourself the following questions to create a standardized procedure for prospective clients:
- Where do you expect to find prospective clients? What instructions does your marketing share with these prospective clients about how to go about getting a session at your practice?
- How will you handle incoming calls or emails? Whose responsibility is it to answer these communications? Will you have an answering service or publicly available scheduling tool? How will you technically set up a phone or email address for your business?
- What will your initial call process look like? How will you schedule these calls? Who will take and coordinate intake calls? Is it a shared responsibility for your team or will you have one dedicated intake coordinator? What’s the intake documentation process like?
- What will your client-therapist matching process look like? How will you ensure the best matches across your team?
17. Seek supervision, consultation, and/or therapy
As the owner of your group practice, you may find yourself dealing with emotional reactions past the general stress and anxiety of starting a business venture. If you noticed that leadership is bringing up feelings of insecurity, negative self-talk, second-guessing, or needing to be involved in the daily small tasks of your employee’s work – this may be a sign that you need to consult with your own therapist!
Often, when placed in new workplace roles, old feelings pop up, including those belonging to your Family of Origin. A practice with a few clinicians resembles the structure of a household – and it’s not uncommon to be replaying family dynamics within your practice. As the leader, you may be tackling personal issues or past trauma without even knowing it, so keep an eye on your mood and emotional experience and don’t be afraid to reach out for help and support.
18. Build a supportive, transparent team culture
Know that your work culture will evolve with each additional therapist, and build a team that you want to be a part of! Be ready to support your team through administrative issues, personal issues, client issues, and more. By getting to know your team, you’ll become more attuned to what they need in order to feel secure, supported, and appreciated – which will no doubt trickle down to reach the clients they serve, too! A great place to begin with learning about building a supportive, transparent team culture is Radical Candor: How to be a Kick Ass Boss without Losing Your Humanity by Kim Scott.
You’ll likely go through iterations of leadership styles and make mistakes, but know that your intentions are positive – and that’s okay! Show your team that you can make mistakes and rebound with resiliency.
You may also encourage the professional development of your team by offering to pay for Continuing Education Units (CEUs), certification courses, and/or trainings. Create a weekly group supervision for anyone who wants additional support or plan fun out-of-office team-bonding activities!
19. Trust your gut
This is one of the most powerful tools you have, especially when making big decisions. Make sure you have enough time to reflect and meditate on the tasks and problems that will no doubt arise. You’ve made it to this stage in your career and what an accomplishment that is! With your clinical background and your leadership skills, trust that what you decide is the best decision for you and your team.
20. Continue learning!
Whew, you’ve done it! You’ve opened a group practice, a massive feat. To sustain your practice and keep it moving forward, continue to read business books and learn how to make your business more effective. Don’t be afraid to revisit your practice’s mission each year – and revise it if necessary! It’s up to you to keep the practice not only up and running but thriving.
Owning a group practice is a never ending project, but the rewards are plentiful. Not only are you helping clients, but you are helping your therapists too. Running your business intentionally and efficiently helps you and your team stay away from burn out, which may be the best reward of them all.
Grow Your Practice With Zencare!
We’re looking for clinically excellent and compassionate therapists and psychiatrists to refer clients to. We’d love to learn about your practice!