When you start a business, it is helpful to know what you have to spend on a month to month or annual basis. You can then make plans for what you need to earn to cover these costs and make the money you need or want to make. Below, I have outlined the outgoings in Private Practice you will need to consider and plan for.
If you are thinking of starting a Private Practice, check out last week's blog about Setting up in Private Practice
Where will you work?
Where you conduct your sessions will determine some of your outgoings.
Will you rent a room?
Will you work from home and allow people to visit you?
Will you do walk and talk sessions?
Will you work online?
If you don’t want to work online or have people in your home, renting a room will be an option for you. Room renting will vary greatly depending on where you are working but in my experience, this is one of the largest outgoings in Private Practice on a monthly basis. The pandemic has at least made online therapy much more mainstream and appealing. If money is tight it’s a great way to start even if you’d like to see people face to face in the future.
Insurance
Adequate business insurance is a must for your Private Practice. You can pay for this annually or monthly and the amount will depend on your provider. There are lots of insurers that provide cover for therapists in Private Practice. I have clients who use Balens, Hiscox and Towergate. Ensure to get multiple quotes and speak to them for advice on what you will need.
As you should be collecting client information when they start you will need to get ICO membership. For most Private Practices the fee will be £40 per year with a £5 reduction if you sign up with a direct debit.
Professional Body
If you register with a professional body you will need to pay for your registration annually. Again, this will depend on your professional body and membership level.
You will also need to ensure that you are doing enough Continued Personal Development (CPD) training to fulfil your membership obligations. How much you need to do and the costs will vary by professional body and training course.
When working in Private Practice you should also be getting regular supervision which you will need to pay for.
Marketing
It is important especially when you first start in Private Practice to have some sort of marketing plan and budget. Some of this can be free such as social media and networking with peers and other complementary professionals such as Psychiatrists.
There are also other ways to market such as counselling directories. You can sign up with Psychology Today, they are currently offering 6 months free. Or Counselling Directory which is around £195 per year. These directories allow potential clients to contact you directly and take no additional fees from you when someone books with you.
There are also other types of directories where you give them your availability and clients can book via the directory. The directory will then take a cut of each session but will handle all the administration and billing for you. You can register for free with some directories and others will have a monthly charge in addition to the fee percentage.
Website Domain & Hosting
If you want to have a website which I highly recommend even in the beginning. You will need to pay for a domain and then a website host. Domains can start out very cheap but can increase year on year. Your hosting will depend on which site you choose to build your website, I recommend Squarespace. It allows users to use pre-built website templates and drag-and-drop elements to create and modify web pages so there is no need for any coding experience.
You can read about what should be on a Private Practice Website in my previous blog for some ideas and insight.
Bank / Payment Fees
It is important to ensure that you get a separate business account for your Private Practice. This should be the first thing you do. Banks for businesses will usually have a monthly fee although I highly recommend Starling. There are currently no fees for Business or Sole Trader Current Accounts and it is so user friendly.
Depending on how you invoice and take payments there may be fees associated with them. BACS transfers will be free but if you use Stripe or PayPal to accept payments there will be a fee per transaction. I would recommend starting out with manual billing at the beginning and you can use my Invoicing Templates to get you started.
Online Systems
Online systems are my thing!
One of the systems I recommend is Google Workspace, you genuinely can run your Private Practice with this one system.
Online systems are my thing! But, I’m going to be honest, when you are starting out you don’t need EVERYTHING. My recommendations are Google Workspace and Zoom to start with. You can read about the benefits of Google Workspace for Private Practice. You genuinely can run your Private Practice with this one system. Email. Google Drive for Client Notes and Files. Google Calendar for organising appointments. Google Forms for Intakes and Contracts.
My caveat for Google Workspace is that I would recommend Zoom over Google Meet. I’m sure the security is just as tight, but I find Zoom much more user friendly and more reliable overall. You can sync Zoom with Google Calendar to create a link automatically and email it to those you invite which saves a lot of time.
The cost for Google Workspace starts at around £4 per month.
Office Supplies
There aren’t many items you’ll need to purchase on a monthly basis once you’re set up and have bought the essentials such as a laptop, headphones and furniture. Notepads and pens are the most likely thing I’ll find in my client's expenses!
I’ll put the mobile phone cost under office supplies. A mobile phone is essential for your practice. I would recommend having a second phone for your practice so you can keep work and personal life separate. You can get a really affordable plan from Smarty who I use. They have a plan with 30GB of data and unlimited calls and texts for £10 a month.
Help
Extra Support
Help you may consider is a Virtual Assistant and/or an Accountant.
Lastly and also probably for later in your Private Practice journey is help. VA and Accountant costs vary wildly and I would suggest asking around for recommendations to find the right ones for you. The right VA will save you valuable time which you can put into working with an additional client or spending doing what you want to do rather than sending out invoices and chasing payments. You can read about why you should hire a VA written by one of my clients.
Conclusion
These are the outgoings in Private Practice that I see based on working with therapists in Private Practice and helping them with their bookkeeping. Each practice is unique and will have its own set of monthly expenses. I recommend completing a Private Practice vision that will determine what expenses you will have. To help you with this I have created a Private Practice Workflow that will ask you questions about how you want your practice to run.
All of the above is tax-deductible so make sure you use your business bank account to pay for everything and add it to your Bookkeeping spreadsheet.
If you want a ready-made template perfect for Private Practice you can purchase and download my Bookkeeping Template. It includes everything you’ll need to complete a cash-based accounting spreadsheet ready for an easy self-assessment at the end of the tax year. It also has a video tutorial to explain how to set up and complete the spreadsheet each month.
If you’d like help with your Private Practice vision or want to discuss best practice solutions you can book an Admin Audit with me. This is a 60-minute zoom call where we can discuss anything you’re struggling with in your Private Practice. You’ll get individual and personal advice and will get a detailed report and any resources I think will be appropriate for you and your practice.
