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 high quality therapists. 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 with their clients. This is especially impactful after clinicians have been through demoralizing overwork at an agency or in the field! Since starting Zencare, I’ve met many therapy group practice owners and can’t help but notice the intense amount of care and protectiveness they have over the wellbeing of their clinicians - which, as a business owner myself, I respect wholeheartedly!
That said, it requires completely different skills to build, grow, and manage a therapy group practice than it does managing your own solo private practice. With a larger team, there’s more responsibility - not only do you support a higher census of clients, but you also have to support your staff in the ways that they need! While it definitely takes the business know-how to set up a group practice, you’ll also use your own clinical skills to understand what your team’s needs are, how to best meet these needs, and how to lead your clinicians to personal and professional growth. Easy, right?
Perhaps it's not so easy... But that's why we’ve come up with nineteen steps to follow to make it easier for you to succeed. We start with the groundwork, the “business-y” aspects of setting up a therapy group practice, and then we share some helpful tips on building your team. Read on to learn more!
1. Determine if you’ll enjoy managing a group practice
Before you even begin the work of starting a group practice, reflect on your why. Why would you like to run a group practice? What goal or mission will sustain you through the hard work? Consider the realities of what it takes to manage a successful group practice and ask yourself if you will enjoy the work - including things like hiring, firing, administrative work, legal processes, accounting/bookkeeping, intakes, and marketing. Make sure that you’re comfortable with the task of being responsible someone else’s livelihood. By having a team, your practice’s financials don’t just impact you - there are other people relying on you to make ends meet. Deeply understanding your why in the face of the amount of effort it takes to set up a group practice will make it clear whether this is a good idea for you at this time.
Consider the responsibilities you’ll take on when building a group practice. While some of the more administrative work can eventually be delegated to an office manager or outsourced to a virtual assistant if you grow to that level, you’ll likely be the one doing all of this at the beginning (even if you can afford support from the get-go, I’m of the belief that you can best build processes and teach others when you’ve done it yourself first). You’ll need to build systems for intake and discharge processes, documentation, accounting, invoicing and payments, cancellations, fees. You’ll also need to 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. Figuring out things like how you manage your team and how everyone communicates begins with the hiring process (including interviewing and negotiating salary), which you can’t outsource.
Talk with others who have started group practices, hear what their experiences have been like to make an informed decision. Throughout this reflection process, though, 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. 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 - and that begins with money. You might think that adding more therapists means seeing more clients which means more profit - which is true. However you must consider that there are certain administrative costs that lower a clinician’s return-on-interest (ROI). Finding a balance is what’s important.
To begin, start to crunch the numbers of how much money you want to make - while you will need to consider how much you pay your therapists eventually, if you become burnt out, the practice will close and your team will unfortunately need to look for other positions. Thinking of all of the administrative costs - including the amount of time you spent completing the admin work - determine how large you would like to make your practice in order to pay yourself what you deserve. This includes estimating a session cost, how many clients you would like to service, and how many therapists you would like to employ. Be sure to pay your therapists what they deserve as well - remember, the ultimate goal is to build a supported team who feel comfortable in their work to avoid high turnover or burn out!
To think more about ROI, take adding another therapist to your staff as an example. If this person sees 20 clients per week at $150 per session, that’s $1200 of profit for your business. However, if you need to spend five hours per month managing this employee (payroll, supervision, etc.), that decreases the therapist’s ROI to $2250. Then by taking the therapist’s monthly salary out of that cut, you can figure out how much money the practice makes for that one therapist.
The ultimate goal is that by combining the administrative effort, you can employ more therapists and therefore see more clients - however, it might take a bit of time to get to this stage if you’re starting your group practice from the very beginning!
3. 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 providers, 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 When you contract with therapy providers, you write out a very specific and explicit contract that 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. In the contract, it will state how much the therapist will receive out of the session fee, while the rest goes to the group 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 will receive a salary and benefits, despite how many clients they see each week which can certainly boost morale. 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.
4. 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 include in your practice? Will they 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.
5. 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 will include 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 will also analyze 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 seek outside funding - 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 or others in your community who offer support.
6. 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 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.
7. 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. It is likely that self-pay will be the most profitable option; however, for the sake of inclusivity and referrals, taking insurance also has its benefits. 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.
8. 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. Just keep in mind that this comes with the price of finding a suitable online platform to support these sessions!
9. 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, 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.
However, if you aren’t yet ready to get your own website, utilize the online therapy directories that exist - like Zencare! Zencare’s reach stretches past the therapist directory, as we have an expansive following on our blog, social media, and listservs. By creating a group practice profile within Zencare, we’ll provide a professional photography session for your clinical headshots for prospective clients to see - a professional headshot that will allow you to charge higher fees! Because we vet our therapists and practices to ensure the highest quality, you’ll join a community of incredible therapists and have an online presence to feature your team.
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.
10. Make sure your finances and accounting are in order
We’ve mentioned money a few times already, but finding a method for accounting and managing your finances will become increasingly important as you grow your practice. Finding an effective accountant will make it so much easier to maintain bookkeeping and file end-of-year taxes. Often, practice managers 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 census is high and your income steady, 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.
11. 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 slip-up. Read up on HIPAA policy, and ask your therapists to take an online 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.
12. Get set up with practice management tools
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. It 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.
13. 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 - 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 called Who: The A Method for Hiring by Randy Street. 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 your candidates, be sure to ask about career goals, their professional strengths, their boundaries in terms of professional work, and their 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.
14. 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.
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, you might want to share your practice vision with them, including your dreams for the team and work that you do. It’s an exciting time for your practice (and your new employee!) and by working together, you’re both reaching for goals and shaping your work culture.
15. 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? How will you technically set up a phone or email address for your business?
- What will your consult call process look like? How will you schedule these calls? (Zencare offers a great scheduling tool for consult calls!)
- What will your intake interviews ask? Who is the intake clinician? Is it a shared responsibility for your team? What’s the intake documentation process like?
- What’s your client-therapist matching process like? How will you ensure the best matches across your team?
16. Have regular consultation to deal with your internal stuff
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, our old feelings pop up, including those belonging to your Family of Origin. 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.
17. Build a supportive, transparent team culture
Since your work culture will evolve with each additional therapist, 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 you serve. A great place to begin with learning about building a supportive, transparent team culture is a book called 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, but know that your intentions are positive and that you’re likely to make mistakes - 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!
18. 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 part 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.
19. 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.