What It Really Costs to Start a Private Practice
By Lisa Reidsema, LMHC • Craft Your Practice™
The first money question every therapist asks before opening a practice is also the one that keeps them frozen. What does this actually cost, and can I afford it. The honest answer is that it costs less than most people fear and more than the cheerful blog posts admit, and the number that matters is not the startup total anyway. It is your runway.
Here is a real look at what you spend to open, and how to think about the months before the income catches up.
The one-time costs to open
These are the things you pay for once to get the doors open:
Business formation. Registering an LLC or PLLC runs from under a hundred dollars to several hundred depending on your state.
A professional website. Anywhere from a low monthly platform fee you set up yourself to a few thousand if you hire it out.
Initial branding and a logo, if you want them, which is optional and can wait.
Furnishing an office, if you are seeing people in person rather than by video.
Notice how much of this is optional or small. The story that you need thousands to begin is mostly not true.
The monthly costs that never stop
These are the ones that matter more, because they run whether or not you have clients yet:
Malpractice insurance
An EHR or practice management system
A scheduling and telehealth tool, often bundled with your EHR
Rent or a virtual office address
A phone line and email
License renewals and continuing education, spread across the year
Total these into a real monthly number. That figure is what your practice has to cover every month before you earn a dollar of profit, and it is the number your runway is measured against.
The cost nobody prices in: the wait
Here is the part that freezes people, and it is not a line item. If you are taking insurance, credentialing can take ninety to a hundred and eighty days per payer before you are paid. Even in private pay, a caseload fills gradually, not overnight. That means you need enough saved to cover both your practice's monthly costs and your own living expenses for the months before the income arrives.
This is your runway, and it is the single most important number in the whole plan. Most people who struggle to launch did not run out of ideas. They ran out of runway three months in.
How to work out your own number
Add your one-time startup costs. Add your monthly practice costs multiplied by the number of months you expect before steady income, which is realistically three to six. Add your personal living expenses for those same months. That total is what starting your practice actually requires, and now the fear of the unknown becomes a plan you can see.
Turn the fear into a plan
If you want the whole launch mapped out in the order that actually works, my free Private Practice Starter Kit is the place to start. Grab it here.
If you want to work out your own startup number and runway one line at a time, the Startup Cost Workbook in my Practice Library does exactly that. See it here.
If you want your whole first ninety days in order, my Private Practice Foundations course walks you through it. See it here.