As you begin setting up your private practice, it is important to remain realistic about the time it takes to become fully operational. Typically new practitioners will need 6 months to 2 years to establish their own practice. The difference in set up time will vary with how many referral sources you acquire and how much marketing is completed. Here are three basic rules to help you get started.
Rule #1: Don't quit your day job
Start seeing private clients after hours from your current job. If there is a non-compete contract in place at your agency, try to negotiate different terms possibly by seeing clientele that varies in diagnosis from clients served in your current agency. You may need to consult an attorney if you cannot negotiate new terms to the non-compete agreement. Many states will only enforce trademark or proprietary information sharing and not actual work restrictions. Meeting with a few clients a week in the beginning will allow you to sample private practice and get an idea of what the process will be like full time.
Rule #2: Set a reasonable time line
Use your time management skills to plan an exit strategy from your current position into your private practice when you are ready to do so. Remember that your current agency is a potential referral source. Schedule time to work on the development of your practice each day. This allows you to have much of the ground work completed before you completely break away.
Rule #3: Create a budget
Plan on one year of a reduced salary as you transition. Look at your finances and figure out what you need to bring home to maintain your lifestyle. Then research the insurance reimbursement rates that you are wanting to work with (Blue Cross Blue Shield, Cigna, Medicaid, Aetna) or your private pay rate and calculate how many clients you need to see to make ends meet. Keep in mind that as a self employed individual you will also be charged more in federal taxes, so work with your tax professional to make sure you don't get behind. Some of your expenses will be:
- first and last month's rent for an office,
- business cards,
- program supplies,
- internet and utilities
In these calculations plan on about a 20% cancellation rate and overbook your schedule. Cancellations are a normal part of doing business so plan for them and don't freak out. A cancellation gives you valuable time that you can use to work on your administrative tasks, build relationships with other professionals or practice a little self care.