The Ultimate Guide To Starting A Therapy Group Practice: 20 Steps to Getting Started

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!

The Collaborative, a therapy group practice in NYC

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 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:

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.

Repose, a holistic therapy group practice in NYC

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 Zencare Practice Management), 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:

Here are some of the expenses to consider when starting a group practice:

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.

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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:

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:

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.

United Paths, a therapy group practice in Pawtucket, RI.

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.

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.

Santo Psychotherapy, a therapy group practice in NYC specializing in issues related to identity and LGBTQIA+ concerns

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:

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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!

13. 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:

Three women sitting at a desk on their computers

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.

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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:

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!