Starting a Telehealth Private Practice

Steps to an Online Private Practice

How To Begin Starting an Online Therapy Business?

As a counselor, therapist, psychologist, or social worker, one of your career goals may be starting a telehealth private practice, especially if you’re looking for an opportunity to work on your terms and online.

When starting a telehealth private practice, it allows you to try your hands out at new systems, structure your business in the best way that suits your needs plus that of your clients, and increase your career growth prospects.

When starting a telehealth private practice, you need to take actionable steps that will allow you to own a thriving business. However exciting as it may sound, if it’s not done right, it may be a complex and highly demanding experience. 

The best way to go about it is to know the proper steps to follow and be adequately prepared. If you’re interested in attracting clients to your online therapy business, you must start off with some foundational basics of starting a private practice.

Basics Foundations of Starting a Telehealth Private Practice:

1. Private Practice Name

Picking a good name for your counseling business is one of the most important step when starting a telehealth private practice. This is because a good brand name will stick forever and can also help scale your business.

However, this happens to be one of therapy business owners’ most significant setbacks. Some people spend weeks or months deciding what the perfect name will be, so much so that it stops them from starting the business, also known as analysis paralysis.

Nonetheless, choosing a private practice name can be a straightforward task if you know the right questions and places to look. Picking a brand name when starting a telehealth private practice, there are a few factors you should always have in mind. A good practice name is memorable, topical, and perfectly on-brand.

A memorable name is short, distinct, and easily recallable. Unfortunately, the most memorable names aren’t personal names. As you consider starting a telehealth private practice, your name needs to be topical, so much so that almost anyone knows what it’s about once they come across it. 

An example could be to include words like “therapy,” or “counseling,” within the name. Doing this will allow your practice to be distinguished between other counseling businesses and can stand the test of time.

2. Client Avatar

Another point to note when starting a telehealth private practice is that you must define your client avatar from the onset. An avatar is a profile of your ideal client. This helps you determine the type and qualities of the clients you want to serve and those you can help the most.

Avoid starting a telehealth private practice only to serve clients who don’t align with your strengths and get worn out in the process. You need to identify your ideal client and figure out where and how to find them

To do this, you need to ask your questions such as “what category of people do I look forward to working with?”, “which people do I feel like I can help within their identified problem?” and “how do I reach (market) to such people?”.

These questions will help you design your client avatar when starting a telehealth private practice. You should also use the information below as a guide of the characteristics of your ideal client:

  • Gender
  • Age Range (Toddler, Children, Teens, Young Adults, Adults, &/or Elderly)
  • Identified Struggles (also known as Pain Points)
  • Employment Status


3. Payment Model (Insurance vs. Private Pay)

One of the choices you must make when starting a telehealth private practice is to choose a payment model that works best for you. 

The payment model you pick shouldn’t be all about the cash, checks, or credit cards you hope to get when starting a telehealth private practice. Instead, it would help if you decided based on a long-term goal and how you intend to build & grow your practice.

So, the question is, do you get credentialed with insurance or only accept private pay from the clients per session? 

While most private practicing counselors and therapists would advocate that it is ideal to develop a private pay practice, it’s essential to look closely at the two options before deciding which one is the most appropriate.

From an administrative point of view, setting up a private pay practice is more efficient as well as lucrative, especially when you consider that you have full control over how much you charge for your services. 

However, you will have to put extra effort into marketing your practice to build consistent referrals, which can pose a problem in situations where you need an ongoing marketing budget & plan.

On the other hand, even though insurances pay less than how much you would like to charge on a private pay model, it is quicker for you to develop a caseload of clients. 

This is because by being on an insurance panel (in addition to being listed on an online therapy directory) your practice is being marketed to clients, without much effort or planning on your part.

When starting a telehealth private practice, you should decide your payment model based on the option that works best for your business and your clients.

4. Fee Rate

For therapists and counselors that are starting a telehealth private practice, setting fee rates with clients can be a difficult hurdle to hop over.

First, a lot of private practicing counselors who don’t know how much they’re worth can be quick to accept whatever comes their way. Also, when starting a telehealth private practice business, it’s easy to be moved by the specific situations of your clients, so much that you’ll want to help rather than charge.

While empathy is an essential aspect of the job, it’s also important to remember that there’s not so much support you can afford for your clients if you aren’t financially comfortable or getting fulfillment from your career. 

How you come up with your fee rates shows how much you value your time and business, sense of worth, and view of money. To decide your fee rates, put the following into consideration.

  • your personal income goals
  • your lifestyle goals
  • your monthly expenses
  • your other sources of income
  • your no-show rates

These factors will help you understand the value in setting up your fee rate. Below is the fee rate formula:

a) Decide how much you want to earn per year
b) Decide how many weeks you want to work per year
c) Decide how many clients you want to see per week

Let’s say you want to earn $100,000 per year. Then, you consider taking off four (4) weeks for vacation, which leaves you working a 48-week year. Next, you consider servicing 20 clients per week (which is the average full caseload seen per week within a private practice). Finally, you divide all those amounts to come up with your service fee:

$100,000 ÷ 48 weeks = $2,083.33
$2,083.33 ÷ 20 clients = $104.16
Service Fee = $104.16

Pro-Tip: When thinking about your yearly income, consider adding an additional $30,000 to that number to factor in business expenses and estimated quarterly business taxes. When you want to increase your service fees, consider either increasing your yearly income, decreasing the weeks you want to work, &/or decreasing the number of clients you are willing to see each week.

5. Service Location

There are different forms of therapy, each of which has specific benefits offered to clients. However, since the COVID-19 pandemic hit, online therapy has fast become the rave of counseling

It is an essential factor that anyone considering starting a private practice needs to factor into their business strategy, especially regarding service location.

When starting a telehealth private practice, you can provide counseling or therapy support to your clients from most locations. 

This all depends on whether you’re licensed to service clients in your & their physical location or have been authorized, through state policies (specifically the state that your client is physical in at the time of services), whether you are granted to provide online services. 

Rather than setting up a physical location, which will limit your services to clients within the surrounding areas, you can use online video conferencing to expand on who you can provide services to.

Social workers, therapists, counselors, and similar professionals can offer clients virtual services, known as telehealth, through their private practice. 

Online therapy as a platform provide similar benefits to physical locations and are more about the convenience both parties can experience during the process.

Documents & Systems when Starting a Telehealth Private Practice

1. HIPAA-Compliant Email/Phone

For anyone who intends starting a telehealth private practice, you must ensure that your communication with your clients is secured. The first way of ensuring this is by getting an email and phone service that is compliant with the Health Information Portability Accountability Act (HIPAA).

Counseling, therapy, social work, and similar career paths will involve exchanging protected health information (PHI), and it’s vital to ensure that all sensitive data is HIPPA-compliant.

You need to ensure that you get a great HIPAA-compliant email provider. HIPAA-compliant email ensures that an email with PHI is delivered securely to the receiver’s inbox. Ensure that you look out for providers with business associate agreements, a responsive customer support team, encrypt emails quickly, and seamless encryption services.

Another essential step towards starting a telehealth private practice is obtaining a HIPAA-compliant phone service to take care of your privacy, security, and encryption needs. You should note that one crucial way of earning your client’s trust when starting a telehealth private practice is by making them feel secure.

2. Employer Identification Number (EIN)

It’s easy to assume that the EIN is unnecessary since you don’t need an employer when starting a telehealth private practice. However, viewing an EIN as a public social security number for your business makes it a more straightforward process.

If you’re the sole proprietor of your private counseling practice, you can settle for your social security number to identify your business, when the need arises. You’ll require an EIN to do the following.

  • Hire employees
  • Offer an out of network billing
  • Open a solo 401(k)
  • Open a business checking account
  • Apply for a Limited Liability Company

Even if you aren’t considering any of the above, getting an EIN when starting a telehealth private practice can be handy in the future.

3. Business Structure

One of the most important steps to remember when starting a telehealth private practice is deciding what business structure you will use. This is because a business structure will impact several elements of your private practice, some of which are day-to-day operations, the ability to raise funds, personal liability, required paperwork, and taxes.

Five common types of business structures you can consider when starting a telehealth private practice are:

  • Sole Proprietorship
  • Partnership
  • Corporation
  • S Corporation
  • Limited Liability Company (LLC)
    • Professional Limited Liability Company (PLLC)

Factors to consider when choosing which business structure as you are starting a telehealth private practice includes:

  • the level of control you need,
  • the source of funding,
  • the structure you are allowed to apply for in your state
  • the flexibility of business goals,
  • the complexity of required policies,
  • how much liability you’re willing to carry
  • how much you’ll pay in taxes.

4. Malpractice Liability Insurance

Many situations can constitute a legal liability for counselors starting a telehealth private practice. While good counselors and therapists strive to protect their clients and avoid slips in overall judgment, there’s also a possibility that mistakes can happen in the process. Malpractice liability insurance protects those private practice owners if they’re involved in a lawsuit.

This professional liability insurance covers a reasonable number (but not all) of lawsuits when starting a telehealth private practice. Some of the general coverage of malpractice liability insurance include:

  • legal aid
  • lawsuit intervention and prevention
  • covering the cost of lawsuits

Benefits of the insurance coverage include:

  • less time deliberation over lawsuits
  • financial security
  • licensing board complaints aid
  • general legal security

5. Electronic Medical Record (EMR)

Over the last years, there’s been a steady evolution in electronic medical records (EMR). This has shown many consultants and therapists a new and entirely different route to record-keeping. For this reason, if you intend on starting a telehealth private practice in therapy or related fields, EMR is a type of medical record you need to be strongly consider investing in.

An EMR is simply a digital medical record chart of your clients who receive services from your private practice. Most of the time, the term is used interchangeably with electronic health records (EHR). However, EHR is more of a patient chart designed to be shared across several professionals and practices.

EMR makes it easier to share important information when starting a telehealth private practice, especially between clinicians, to ensure the best procedural outcome for clients. Ensure that your choice of an EMR strategy has the following:

  • HIPAA-compliance
  • Storage
  • Client access
  • Segregation of data

When starting a telehealth private practice, ensure that plans are on the ground to integrate EMR into your day-to-day process. In the long run, an essential record keeping strategy is to ensure that you provide excellent services to your clients when starting a telehealth private practice.

Contact Us To Start Your Telehealth Private Practice With Our Business Coach!

Now that you understand the basic foundations, documents, and systems you need when starting a telehealth private practice, it’s now time to decide if you want to learn more about building your private practice or hire a business coach for therapists to help you ensure that you are taking the correct steps to launching your private practice successfully. Request a free consultation today with our business coach for therapists!

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