If you’re getting ready to launch your own therapy practice, having a clear understanding of your budget is essential. Whether you’re planning to start off virtual-only, in-person, or a mix of both, the first year can bring unexpected expenses. Here's how to set up a realistic budget so you’re not caught off guard.
In this article, we’ll talk about some of the costs to consider that directly contribute to running your practice in the early stages. We’ve written an article about how to set up the legal business entity for your practice here, which can have varying costs depending on your licensure, state, and type of entity.
These are the one-time purchases you’ll need to get off the ground.
These are the recurring costs you’ll need to keep the lights on.
The other costs that support and help your practice grow.
Now that we have a ballpark estimate of what costs we can expect, we need to factor in some contingency funds in case of emergencies or unexpected costs. Set aside 15–20% of your expected first year budget for this.
You’ll first need to determine what your average rate might be. Do some research on what your rate could look like depending on your experience level, type of therapy, and location. Also factor in things like whether you’re taking insurance or private pay only and if you want to implement things like a sliding scale to improve accessibility for your future clients.
Now, we’ll need to project our future caseload. For most therapists, this can be anywhere from 15–30 clients a week. Remember to set realistic expectations.
Don’t count on meeting your caseload goals for the first few months though, getting your first few clients can take longer than expected. Here’s what a ramp up might look like:
With these numbers, you can have an educated guess on how much your practice might make in its first year. Compare your projected revenues to your projected costs and set aside any extra cash you might need to stay afloat during the early months.
There’s no one-size-fits-all budget. What matters is making sure yours is intentional, not rushed. Planning ahead will save you time, money, and stress later down the road.