Top Mistakes Therapists Make When Starting a Private Practice

By Jenn Bovee, LCSW, CRADC, CCTP II, CCHt
EMDRIA Certified Therapist & EMDRIA Approved Consultant

When therapists decide to launch a private practice, they often underestimate how complex and challenging the journey will be. In this article, we explore common mistakes therapists make when starting a private practice and how avoiding those missteps can support long‑term success.

Opening a private practice involves more than clinical skills. It requires business knowledge, clear boundaries, systems, and marketing efforts. Without early planning, what begins as an inspiring vision can quickly become overwhelming. Below, I describe five frequent mistakes therapists make when starting a private practice and offer guidance for building a sustainable, ethically grounded practice that can support both clients and clinician wellbeing.

Many therapists begin with the assumption that their clinical training alone will carry them forward. In reality, a private practice needs a viable financial plan and a handle on the practical realities of running a business. One common error is not creating a realistic budget before seeing clients. Some therapists begin accepting clients without calculating overhead costs such as rent, utilities, office supplies, software subscriptions, insurance, or taxes. This may work in the short term. Over time, though, overhead eats into earnings. As a result, the therapist may feel underpaid or pressured to take on more clients than they can ethically or emotionally handle.

It helps to build a simple spreadsheet projecting your first 6–12 months. Include estimates for overhead, taxes, and a realistic number of clients per week. You want to know approximately how many sessions you must conduct to cover expenses and still earn what feels fair and sustainable.

Another frequent misstep is failing to take into account the often-confusing world of insurance, licensure renewals, and tax obligations. Therapists sometimes skip researching whether they need a business license in their city or what their state’s rules are for accepting insurance. Others fail to include professional liability insurance or forget to set aside money for quarterly tax payments. Not addressing these matters from the start increases the risk of financial strain down the road and can lead to burnout. A simple conversation with a financial advisor or attorney can reveal many unexpected requirements and save serious headaches later.

Many therapists feel pressure to be open to anyone, hoping a wide net will help fill their practice more quickly. In fact, that tendency often works against them. Therapists who attempt to help everyone may find themselves stretched too thin or feeling uncertain about how to market. Messages become vague: the therapist might say they work with adults, teens, couples, families, but the resulting lack of clarity makes it harder for potential clients to know if the therapist is the right fit.

A more effective approach is to define a niche or ideal client (for example, early‑career professionals facing workplace stress, couples navigating life transitions, or parents managing anxiety). Knowing who you serve helps you tailor your messaging, anticipate common needs, and develop deeper expertise in that area.

Another mistake is neglecting referral networks or outreach to potential referral partners. Therapists may hope clients find them online or by word of mouth. But without a clear niche and intentional networking with physicians, coaches, community organizations, or other professionals, your steady stream of referrals may take much longer than you expect. Building a small but strong referral network early on can help you grow in a more sustainable and consistent way.

Clinical skill is essential. So is having smooth administrative systems to protect client confidentiality and keep your practice running efficiently. It is common for new therapists to rely on paper calendars or rudimentary spreadsheets at first. Later, they realize scheduling conflicts, missed appointments, or privacy issues, causing frustration. Another frequent oversight is not having a reliable backup plan for client records in the event of technical failure or data loss.

Investing in secure practice‑management software or scheduling platforms can help your practice run smoothly from day one. Even if you start small, having a clear system supports professionalism and client trust.

Regulations around client confidentiality, record retention, informed consent, and secure communications are not optional. Some therapists starting private practice treat these requirements casually or delay learning them until after clients arrive. Failing to comply with state laws or professional ethics can jeopardize your license and your clients’ trust. Taking the time upfront to create clear written consent forms, confidentiality policies, record‑keeping protocols, and a plan for secure communication helps ensure ethical and safe practice from the start.

Therapists are trained to care for others. But many forget that private practice requires caring for themselves, too. Without boundaries and self‑care, burnout becomes a serious risk. After starting a practice, therapists may feel they need to accept every referral that comes their way. This may lead to packed schedules without breaks, little time for paperwork, and poor self‑care. Over weeks and months, this can lead to exhaustion, reduced clinical effectiveness, or even ethical lapses.

From the outset, creating a schedule that includes time for documentation, self‑reflection, supervision or consultation, and rest can help maintain clinical clarity and emotional health. Without clear boundaries, therapists may find themselves offering extra services, taking calls after hours, or feeling overly responsible for client outcomes. Another common issue is being drawn into clients’ crises because no system is in place to manage emergencies. Setting clear policies about session frequency, cancellation procedures, emergency protocols, and boundaries around availability helps both clients and the therapist understand expectations.

Some therapists assume they will get clients just by setting up an office and waiting for word to spread. In today’s world, that approach often leads to slow growth. Therapists often delay creating a simple professional website or listing on directories. Without a website or at least a profile in trusted online directories, potential clients or referral partners may not find you. Clients often want to know more than your name and phone number before reaching out—such as your qualifications, specialties, fees, and values. Without that information available, you may be passed over for someone with a stronger online presence.

Even when a website exists, many therapists neglect fundamental SEO practices. For example, they might not use keywords that match what potential clients search for. They may not include a clear description of services, location, or contact information. As a result, their website remains invisible to search engines and potential clients. Using simple SEO strategies such as clear page titles, keyword‑rich service descriptions, mobile‑friendly design, and easy contact information can help new practices reach people who are actively searching for support.

Starting a practice is not something you have to navigate alone. Engaging with coaching, consulting, or continuing education (CE) training can make a meaningful difference. Working with a coach or consultant who understands private‑practice challenges can help you build a realistic budget, design ethical policies, and create marketing and referral strategies that reflect your values and goals. Continuing education training offers a chance to learn about legal compliance, documentation, and best administrative practices.

With guidance, you can avoid many common errors before they escalate into serious issues. Coaching and consultation also offer accountability and support during a time that can feel lonely and uncertain. If you value thoughtful growth rather than rushing toward occupancy, these supports can significantly reduce the stress and risk that come with launching a practice.

If you are a therapist in Bloomington or surrounding communities, considering launching or rebuilding your private practice, I offer coaching, consulting, and CE training designed specifically for clinicians entering private practice. Together, we can build a clear business plan, administrative systems, marketing approach, and policies that reflect your professional and ethical values.

Starting a private practice is a significant undertaking. It requires more than clinical skill. It requires planning, boundaries, systems, self‑care, and clarity about whom you serve. By avoiding common mistakes and choosing to build intentionally, you can create a practice that supports your clients and honors your well‑being.

If you are ready to explore what that might look like for you, reach out for a complimentary consultation: https://www.mymentalwellnesscompany.com/clinician-business-growth-consulting