How to Grow a Private Pay Therapy Practice

Key Takeaways

There are two broad strategies for growing your practice: raising your rates and attracting more clients.
It makes sense to raise your rates as your experience and training grows and demand for your services increases.
You can attract more clients by fine-tuning your marketing, targeting new niches, and making your schedule more efficient.

Once you’ve started your private pay practice and settled into a routine, it’s time to think about growth.

First things first: Your practice doesn’t have to grow. If you’re satisfied with your caseload and monthly income, that’s great. You can focus on the needs of your clients and your own personal growth as a therapist.

But if you’ve maxed out your caseload and your income is less than satisfactory, or if you have visions of one day running a group practice, then it’s time to get into the growth mindset.

Here are some strategies for expanding your practice and increasing revenue. But first—why grow in the first place?
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When and why to grow your private pay therapy practice

Growing your private pay practice increases your income. But it’s about more than just the bottom line—depending on how you do it, an expanded practice can also help you treat more clients.
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Why grow your practice?

Some common reasons therapists choose to grow their private pay practices:

A bigger paycheck. The more your practice earns, the more you can pay yourself. Making sure you’re fairly compensated helps to prevent burnout.
Wider reach. Expanding your caseload or offering new services allows you to help more people in need of therapy.
Long-term stability. A practice with healthy profits and cash flow is better able to stay the course financially and weather economic downturns.
Plans to sell. Whether you’re planning for retirement or a new career somewhere down the line, building a practice you can sell is a smart move—but buyers won’t be interested unless it’s a profitable business.
Freedom and flexibility. A larger practice may give you more freedom to pursue new modalities and client niches, experiment with alternative income sources, and build the career you want as a self-employed therapist.
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When should you grow your practice?

“Growth” may be a broad goal for your practice, but how do you know when it’s time to make it a priority? Some signs to look for:

An earnings plateau. If your income has grown and then stalled, it may be a sign you need to try new strategies for increasing your earnings.
Lack of future vision. Part of growing your practice is setting goals. If you don’t have a clear vision for the future of your practice, making concrete plans for growth can help.
More opportunities than you can handle. A long client waitlist is not a bad thing to have—but it’s also an opportunity for expansion that you may not want to pass up.

There are three things you should have already before starting to grow your practice:

Stable revenue and expenses. When your income is predictable, you can start making financial projections and plan for future growth.
Risk tolerance. Working capital and emergency savings can cushion you against any short-term dips in cash flow and cover the cost of investing in growth.
Set procedures. Once you’re confident in your schedule, workflow, and admin procedures, you have a strong foundation to build on.
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The limiting factor: money mindset

Many therapists hesitate to focus on growth because their number one priority is helping clients. After all, you became a therapist to help people. Isn’t there something wrong about focusing too much on money?

The truth is, building a profitable practice and helping clients go hand in hand. A bigger, healthier practice allows you to:

Treat more clients, by making your schedule more efficient or hiring other clinicians.
Focus on treating the types of clients or conditions you specialize in.
Offer sliding scale fees and pro bono sessions, making therapy more accessible.
Turn your dream practice into a reality rather than simply scrambling to make ends meet.
Build a stable, sustainable practice and career, ensuring you can continue offering the best care possible to the clients who need it.

With these points in mind, you may find it easier to overcome limiting beliefs about money—so you can both improve the lives of your clients and build a healthy business.
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Attract more private pay clients

Getting more private pay clients is one of the most straightforward ways to increase revenue for your practice.

You don’t need to:

Work more clinical hours
Raise your fees
Branch out into alternative revenue streams

All you need to do is fill your list with clients who pay out of pocket. You’ll earn your full hourly fee rather than the low reimbursement rates paid by insurers.

Provide support for OON benefits

Payment solutions like Thrizer make therapy more accessible to clients with OON benefits.

With Thrizer Pay, once your clients hit their OON deductible, they only pay a co-pay for each session. Thrizer pays you the remainder of your session fee upfront, then submits a superbill to the insurer on behalf of the client and waits for insurance reimbursement.

Better support for OON benefits makes you more attractive to clients who have insurance but want to venture beyond the list of therapists available in-network.
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Focus marketing on cash pay clients

Different demographics and niches may be more or less able and willing to pay out of pocket for therapy.

For instance, if you treat children, many of them are likely covered by their parents’ insurance benefits and limited to choosing in-network therapists. In that case, you could pivot your marketing to adults, attracting clients who are able to pay out of pocket or cover the cost of deductibles and coinsurance of OON treatment.
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Raise your rates

Raising your private pay rates may sound unappealing. Very few therapists look forward to telling their clients they will have to start paying more for therapy. But even a minor increase across the board (5-10%) can significantly increase your income without increasing your workload.
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Factors affecting your hourly rate

The rates you set are based on a number of factors, all of which are liable to change with time:

Local therapy rates. Are other therapists in your area charging more than you? Have local rates recently increased?
Experience level. When was the last time you raised your rates? How much more experience have you gained since then?
Expertise. How have you expanded what you have to offer clients in terms of treatment styles, modalities, and specializations? How many continuing education credits have you earned since you last raised your rates?
Credentials. Have you gained any new certifications since your rates last changed?
Operating costs. Has the cost of running your practice increased? Is your practice still as profitable as it was when you started it?
Cost of living. How much has the cost of living—both for you and for your clients—gone up since your last rate increase?
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When to raise your rates

The ideal time to raise your rates is when your client list is full. Preferably, you also have a waitlist. That means:

You can afford churn. If clients decide to leave after you raise your rates, you can either absorb the loss or fill the gaps in your schedule.
A small increase has a bigger impact. The more sessions you bill for each week, the less you need to increase your rates to make an impact on your bottom line.
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Client impact vs. benefit to your practice

As you calculate your new rates, weigh the impact on clients against the benefit to your practice. It helps you set a goal amount—an increase in monthly income—based on your needs.

For instance, you may decide to:

Put $500 each month in an emergency savings fund
Invest an extra $300 per month in marketing
Save $200 per month to put towards continuing education
Pay yourself an additional $1,000 per month in salary

That’s a total increase of $2,000 per month, or $500 per week.

Now, if you have an average of 20 sessions per week, you’ll need to increase the fee for each session by $25 in order to meet your income goals.

Assess how that will impact clients. If clients are already paying $200 per therapy session, $25 may not be a significant increase. If they’re paying $100 per session, it’s a bigger jump.

You may need to go back and forth, adjusting your goals to reach a fee increase most clients can afford. It’s a bit of a balancing act—but handled carefully, it will help you grow your practice without significantly affecting your caseload.
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Adjust your schedule so you see more clients

Besides raising your rate, increasing your caseload is one of the most straightforward ways to grow your practice. But what if you’re already carrying a full caseload?

In that case, time is your number one limiting factor. You need to find a way to devote a greater part of your schedule to billable hours. Time blocking and automation can help.
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Increasing your caseload with time blocking

Time blocking is a strategy for building a more efficient schedule. With time blocking, you designate chunks of your schedule for specific activities. For each block, you devote 100% of your energy and attention to that activity, avoiding any distractions.

Adjusting focus from one task to another takes time and energy. Time blocking reduces task-switching so you use your time more efficiently.

To time block your schedule:

Identify priorities. Client sessions, documentation, consultations, email, and backoffice admin are all good candidates.
Estimate realistic time. Don’t underestimate the time it takes to write notes, catch up on email, and emotionally decompress between sessions.
Assign blocks to your calendar. Devote significant chunks of time—at least an hour long—to each activity. If possible, schedule clinical sessions back to back.
Protect your time. Turn off notifications and other distractions so you stay focused on each individual task.

There are a number of apps that can help you block off your schedule. For instance:

Sunsama automatically turns your tasks into calendar blocks and helps you establish daily workflows.
Notion allows you to build custom task boards and weekly planning templates.

Also, some EHRs—like SimplePractice and TherapyNotes—include time-blocking options with their scheduling tools.
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Experiment with automation

Tools for automating parts of your practice can free up more time in your schedule to devote to clinical sessions.

Some ideas to get you started:

Intake flows. Many EHRs allow you to set up automated intake flows, so clients can fill out intake documents, provide payment information, and schedule sessions without your input.
Admin assistant. A remote admin assistant can help you manage communications and scheduling. An AI assistant can do much of the same, but make sure it’s HIPAA-compliant before using it in your practice. Any AI assistant must sign a business associate agreement (BAA) with your practice in order to be HIPAA-compliant. Otter.ai is one example.
AI documentation. HIPAA-compliant AI documentation tools can significantly reduce your workload. But carefully review all notes yourself and make sure you have written client consent before recording any sessions. Upheal is a popular choice.
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Target new niches

Targeting new niches can help you fill out your caseload. It also helps to attract clients with OON benefits looking for specialist care in-network therapists may not provide.

You can expand your practice to serve more niches by carefully planning your required continuing education credits. Also, there’s nothing to stop you from pursuing additional continuing ed above and beyond what is required by your licensing board.

Aim to train in new modalities and treatment methods. Some continuing education also trains you to serve specific communities and demographics. You could focus on:

Modalities and communities that overlap with your current niche(s).
Specific client demographics or conditions underserved in your community.
Emerging and rapidly developing conditions with high demand, such as adult ADHD and late-diagnosed autism spectrum disorder.

Targeting new niches doesn’t just have the potential to grow your client list—it increases your range and expertise as a therapist.
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Expand to serve out-of-state clients

If you’ve considered treating clients in other states via telehealth but held back because of the complexity involved, now may be the time to make your move.

Limiting yourself only to treating clients in your home state puts limits on the growth of your practice. And once you know what’s required, expanding into multiple states takes less time and effort than you may think.

Here’s what you need to build a multi-state practice:

Out-of-state licensing. You’ll need to register with the licensing board in the state where you plan to serve clients. Luckily, interstate compacts—namely the Counselling Compact (for LPCs and LPCCs) and PSYPACT (for psychologists)—make that easier.
Foreign qualification. If you operate as an LLC or PLLC, you must register for foreign qualification and a Certificate of Authority in the state where your clients are located. In many cases this can be done online.
Income tax nexus. Review the income tax nexus thresholds for the state where you’ll serve clients. These thresholds determine whether you need to pay income tax in that state. The Secretary of State’s website is a good place to start.
Multi-state filing. CPAs and remote accounting services can help you complete filing in multiple states and estimate quarterly payments.
Bookkeeping processes. If you’re triggering income tax nexus in other states, you’ll need to set up your bookkeeping to track which states revenue comes from. That allows you to calculate how much tax you’ll owe.
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Double down on marketing that works

Many therapists invest time and money marketing their practices but fail to track whether their efforts pay off. To track the effectiveness of a marketing channel, you have to measure your return on investment (ROI)—that is, how much your practice actually earns from marketing relative to the amount you spend on it.

Then, you can increase investment in the marketing efforts that bring in new business, while cutting back or eliminating the ones that don’t.
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Update your intake questionnaire

If you haven’t already, include the collection of marketing data in the intake questionnaire you give new clients.

This can be as simple as a single question asking how they heard about your practice. For finer-grained data, you can also ask how they discovered your website or social media accounts and who referred them to your practice.
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Define goals, then measure them

Different marketing metrics measure different marketing goals. Key goals for online marketing include:
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Brand awareness

Potential clients who know you exist and remember your name
Measured by reach (the number of unique individuals who saw an ad or post) and impressions (the number of views)
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Audience growth

Followers or subscribers on via social media or newsletter
Measured by an increase over time in the number of followers or subscribers
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Engagement

Interaction from followers on social media
Measured by engagement rate (reported on your social media dashboard) and the number of likes, saves, shares, and comments
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Website traffic

Visitors to your practice’s website
Measured by the number of clicks on ads and the click-through rate (ratio of ad impressions to website visits)
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Referrals

Word-of-mouth referrals from past or present clients, healthcare workers, social workers, or others
Measured by your intake questionnaire
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Bookings

Consultations and new clients
The relationship between your marketing and your bookings is measured by cost per acquisition (CPA)—the amount you spend to get each client
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Decide which marketing is worth investing in

Combining marketing goal metrics and information from intake questionnaires, you can get a sense of which channels are having the biggest impact.

For instance, if you spend $400 per month promoting your posts on social media, but 90% of your new clients come in via word-of-mouth referrals, it could be a sign your money would be better invested elsewhere.

On the other hand, if most of your word-of-mouth referral clients say that, because of social media, they were already aware of your business before they were referred, it could be a sign your social media posts are helping to cultivate new business for your practice. Metrics like brand awareness have an indirect impact. Doubling down on social media marketing could help your practice in the long run.

It can be tricky teasing out insights from marketing data and using them to make decisions. If you’re ready to get into the nuts and bolts of it, consider taking a marketing fundamentals course from Udemy or Coursera.
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Advertise to clients with OON benefits

You may have more success getting new clients if you aim your advertising at individuals with OON benefits.

Here’s how to do it with Google Ads:

Find out which plans include OON benefits. Preferred Provider Organization (PPO) and Point of Service (POS) plans often offer OON benefits. Check with popular insurers in your state to see which ones have PPO and POS plans.
Target keywords for those plans. For instance, if Blue Cross Blue Shield offers high OON reimbursements to customers in your state, target the keywords “BCBS therapists in [county, city, or state]” and “BCBS therapists near me” (specifying local search).
Be clear in your messaging. Be explicit that you’re out-of-network, but that you make OON billing simple. Eg: “Specialized therapy with easy OON billing in [state].”
Offer OON support. If you use Thrizer, you may decide to highlight the fact based on the typical coinsurance your target would pay (e.g. “Get 70% back on therapy”). Be clear that coinsurance rates may vary, and that the rate only applies after the deductible has been covered.
Targeting niches may improve ad performance. Many people looking for OON therapists are going out of network because they want specialized services. You can highlight that in your advertising (e.g: “EMDR therapy in [state] with OON coverage”).

You can follow a similar strategy using SEO. The most important thing is to be clear about what you do offer—superbills for OON clients, with advanced coverage (immediate reimbursement) if you use Thrizer—without setting false expectations of discount therapy sessions or insurance loopholes.
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Explore new revenue streams

Alternative revenue streams can:

Increase your income once you’ve maxed out your client list
Provide supplementary income if you’re struggling to get new clients
Cushion you from dips in demand for clinical counselling, making your practice more resilient

Revenue streams focused on client care include:

Online courses and workshops: These can either be pre-recorded or delivered in real time.
Workbooks and ebooks: Online marketplaces like Amazon make it easy to publish and sell digital therapy resources.
Coaching: Therapists are uniquely qualified to serve as coaches, and you don’t need extra certifications to coach clients in a niche like leadership, business ownership, mental performance, sports, or the arts.
Assessment and testing: Providing assessments can fill gaps in your schedule without committing you to taking on new long-term clients.

You can also increase revenue by serving other therapists as:

A supervisor
A case consultant
A mentor or business coach

If your caseload has become overwhelming, reducing your weekly one-on-one therapy sessions and investing time in new revenue streams may even help to prevent burnout. Variety is the spice of life.
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Hire more clinicians

Once you’ve reached your personal capacity to treat clients, hiring additional clinicians keeps your practice growing.

A few caveats before you decide to upgrade to a group practice:

Be prepared for extra admin. You should expect to reduce your own clinical hours so you have time for tasks like running payroll, handling bookkeeping, and coordinating with staff.
Starting a group practice costs money upfront. Office space, business registration and tax election, payroll services, multi-user EHR packages—these all cost money out of pocket. Make sure you’ve built a realistic budget before you hire staff.
Private pay may present challenges. Not all therapists are ready to ditch insurance panels. The field of candidates narrows if you’re looking for new hires who will take private payment only. Be prepared to explain your rationale for running a private pay practice and discuss how potential hires can support clients with OON benefits.

Here are the three most important questions you’ll need to answer before launching a group practice.
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Employees, contractors, or both?

Decide which type of staff you will hire:

Employees receive a W2 each year reporting their pay, tax withholdings, and contributions to retirement funds. They work regular, scheduled hours on an ongoing basis, and you withhold taxes from their paychecks. There’s a greater administrative burden when you hire employees—you’ll need a payroll platform for paying wages and withholding taxes—but it’s essential if you’re planning to hire long-term staff.
Contractors receive a Form 1099-NEC from your practice reporting the amount you paid them over the course of the year. Contractors may be hired for a fixed period at a set rate, or they may work on an ongoing basis and invoice you for their services. They don’t have set work hours or regular pay, and you don’t make any withholdings from their earnings.
A mix of contractors and employees may be the best solution for your practice. For instance, you might hire clinicians as employees while contracting an admin assistant on an as-needed basis.

Misclassifying employees as contractors can land you in trouble with tax authorities. This resource from the US Chamber of Commerce gives a detailed comparison of contractors and employees.
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Payroll or accounts payable (AP)?

If you hire employees, you’ll need to run payroll to calculate their pay, make withholdings and remit them to the relevant tax authorities, generate pay stubs, and disperse funds.

While it’s possible to run payroll yourself, it comes with a high administrative burden, and errors can lead to tax filing problems and even IRS penalties.

Most small- to medium-size therapy practices use a platform like Gusto to run payroll, automating most of the process.

If you’re exclusively paying contractors, you’ll need to set up an AP procedure for processing invoices, making payments, and updating your bookkeeping ledger. You can do that with a dedicated software platform, but most payroll solutions also include support for paying contractors.
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In-person clinicians or remote workers?

If your clinicians will be treating clients locally and in person, you’ll need to find and lease an office space. That significantly adds both to your overhead and to the upfront cost of launching a group practice (most commercial leases require first and last months’ rent plus a damage deposit).

You might opt instead to launch a remote group therapy practice. In that case, each clinician works from their own rented office space or home office. It reduces your practice’s overhead, but limits your practice to treating clients 100% via telehealth.

Take time to consider whether a physical or virtual office is best for you and your clinicians—each has its own benefits or drawbacks.
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Summary

Only plan to grow once your revenue and expenses are stable and you can financially tolerate the risk.
You can attract new private pay clients by offering extra support for OON benefits.
When your caseload is full, a small rate increase can have a significant impact on your income.
More efficient scheduling (with time blocking and back office automation) frees up more clinical hours to treat clients.
Reach even more clients by targeting new niches, expanding to other states, and doubling down on your most effective marketing channels.
Alternative revenue streams can increase your income while making your practice more financially resilient.
Only hire staff once you understand the administrative burden and upfront costs involved.
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Learn more about how to get private pay clients for therapy.

‍This blog post is provided for informational purposes only and is not intended as legal, business, medical, or insurance advice. Laws relating to health insurance and coverage are complex, and their application can vary widely depending on individual circumstances and state laws. Similarly, decisions regarding mental health care should be made with the guidance of qualified health care providers. We strongly recommend consulting with a qualified attorney or legal advisor, insurance representative, and/or medical professional to discuss your specific situation and how the laws apply to you or your situation.