A step-by-step guide for therapists ready to move from employee to business owner
You’ve probably thought about it more than once — during a packed day of back-to-back clients, while submitting yet another note to an EHR system you didn’t choose, or after realizing your paycheck doesn’t reflect how hard you’re working.
If 2025 is the year you finally go out on your own, you’re not alone – and you’re not behind. Knowing how to startStarting a private practice doesn’t require a perfect business plan or a huge savings account. But it does help to know what to expect and what to prioritize early on.
This isn’t a motivational push or a glamorized story about “being your own boss.” It’s a clear, practical guide for therapists who are ready to transition out of traditional employment and build something that actually works for them.
Here’s what to focus on – step by step.
Step 1: Know Why You’re Leaving — and What You’re Building
Before you do anything with paperwork, take time to get clear on your motivation. Are you burned out from high caseloads? Craving more autonomy? Wanting to specialize in a specific niche or population?
Knowing your “why” helps shape everything else — from how many clients you want to see to where you want to work, how you’ll set your rates, and whether you’ll stay solo or grow a group over time.
Starting a practice isn’t just a job change – it’s a mindset shift. You’re not just a therapist anymore. You’re also a business owner. That means you’ll need systems, structure, and strategy alongside your clinical skills.
Step 2: Figure Out the Financial Basics Before You Quit Your Job
You don’t have to have everything perfectly mapped out before you go out on your own, but it’s risky to leap without a plan. If you’re currently working full-time, see if you can reduce hours or build up savings before making the full transition.
Ask yourself: What’s the bare minimum I need to earn monthly to cover my personal and business expenses? How many sessions per week would I need to meet that goal, realistically? Do I want to take insurance, go private pay, or both?
If numbers aren’t your thing, talk to an accountant early. The financial side of practice is learnable — but it’s easier (and less stressful) when you’re not doing it alone.
Step 3: Get Your Legal and Logistical Setup in Order
This is the part where it starts to feel real. You’ll need to choose a name for your practice (even if it’s just your name), register your business with your state, and decide on a business structure. Most solo therapists start as sole proprietors or single-member LLCs. Then apply for an employer identification number or EIN – basically a Social Security number for your business – and use that to open a separate business bank account.
Make sure you have malpractice insurance in place and check your state’s specific licensing and disclosure requirements for private practice.
None of this is complicated, but it can be time-consuming if you’re figuring it out as you go. A good accountant or advisor can help you knock this out quickly and cleanly.
Step 4: Set Up the Tools You’ll Use to Run Your Practice
Running a private practice means handling scheduling, billing, documentation, and client communication, and you want to automate as much of that as possible.
Start by choosing a practice management platform. Most solo therapists use tools like SimplePractice, TherapyNotes, or Jane. These handle client records, payments, scheduling, and telehealth in one place.
You’ll also want to set up a HIPAA-compliant email, a basic website (even a one-pager is fine to start), and some kind of bookkeeping tool or process. This could be QuickBooks, Xero, or working with someone who can do it for you.
You don’t need to overbuild, but you do want clean, dependable systems that help you stay organized and free up your time.
Step 5: Price Your Services With Intention — Not Guesswork
One of the biggest mistakes new private practice owners make is setting rates based on what feels “reasonable” or what others are charging, without looking at what they actually need to earn. Here’s a helpful blog on how to set your private practice pricing HERE.
Start with the math. What does it cost you to run your practice? How much do you want to take home each month? How many clients do you want to see per week? Use those numbers to reverse engineer your fee.
And yes, you’re allowed to charge a full rate even if you’re new to private practice. Your skills didn’t disappear just because you changed settings.
If you’re not sure where to start, the Profit First method is a helpful framework that puts structure around how you spend, save, and pay yourself. We break it down in detail on the Traktion blog if you want a clear starting point.
Step 6: Build a Gradual Transition Plan (If You Can)
Not everyone has the financial cushion to quit and build from scratch. If you can, consider starting your practice on the side while still working part-time. This gives you room to build referrals, test systems, and learn the business side without the pressure of needing a full caseload immediately.
Even if you plan to go all-in, build a 3–6 month ramp-up plan that includes marketing, networking, and time to adjust. It often takes longer than expected to fill your calendar, and that’s normal, not a sign that you’re doing it wrong.
Step 7: Get Comfortable Asking for Support
This part is important. Going solo doesn’t mean going alone.
Ask colleagues how they set up their practice. Join a therapist Facebook group or local professional network. Talk to a bookkeeper or accountant. Find a mentor who’s a few years ahead of you.
Starting a practice is a mix of clinical work and business decisions. Having a support system — both personally and professionally — makes a huge difference.
Get Extra Help Starting Your Practice
Starting a private practice in 2025 is doable — and it doesn’t have to feel like a leap in the dark.
Give yourself permission to learn as you go, take small steps when needed, and ask questions along the way.
And when you’re ready for help with the financial side – whether that’s setting your rates, understanding taxes, or choosing a retirement plan – Traktion works specifically with therapists to make those decisions easier and less stressful.
You’re building something of your own. Let’s make sure it supports you the way it should. Head over to our Contact Page to book your introductory call.
Until next time!