Private Pay from the Start: Can You Really Do It?
Crazy idea? Not at all. Starting a private pay therapy practice from day one is not only possible, it can be incredibly rewarding if you plan carefully. Many therapists assume insurance-based work is the only way to build a practice, but private pay can offer flexibility, autonomy, and better alignment with your values and schedule.
When I coach therapists considering this path, I take a very pragmatic approach. Private pay is not a blind leap; it’s a strategic choice that works best when you have the right foundation. Here’s what I usually ask before anyone dives in.
Key Questions Before Going Private Pay
1. Can you weather financial ups and downs?
Private pay income can fluctuate the most in the first 6–12 months. Ask yourself:
Are you the primary earner, or do you have a partner whose income can help buffer these fluctuations?
Do you have savings to sustain you during slower months?
Example: If you need $4,000/month to cover living expenses, but expect to bring in only $2,500 per month for the first few months, do you have a financial cushion to bridge that gap for 6-12 months?
2. Is your niche well-defined?
Do you know your ideal client?
Have you defined both a broad niche and a micro-niche?
A clear niche makes attracting private pay clients much easier. Ideally, you should have both a broad niche (like anxiety in adults) and a micro-niche (like anxiety in high-achieving women with chronic stress). A clearly defined niche also helps your marketing stand out in a crowded online landscape.
Pro tip: Niches that tend to work well for private pay include career coaching, perinatal mental health, executive coaching, trauma-focused therapy, and anxiety/perfectionism support. Some niches are more challenging, like certain general therapy practices with lower local awareness.
3. Is your website ready?
Do you have a professional website?
Does it reflect a polished, private pay practice?
Is it optimized to convert visitors into clients (SEO, clear service pages, strong calls-to-action)?
Example: A site that clearly communicates your specialties, your approach, connection with clients pain and hopes, and offers clear instructions on how to get started will convert much better than a generic “contact me” page.
4. Do you have a marketing plan?
Are you confident in attracting private pay clients?
Do you have systems in place for outreach, content, and referrals?
Marketing isn’t just posting on Instagram once in a while. It’s a plan to reach clients consistently, through multiple channels, whether that’s Google SEO, social media, speaking engagements, or networking in your niche.
Marketing is a skill therapists often underestimate. Without it, even the most talented clinician can struggle to fill their schedule.
5. Have you done the math?
Have you done the math for your average rate needed?
How much do you need to earn?
How many clients do you need to see weekly?
At what rate will you break even and grow financially?
For instance, if your goal is $6,000/month, and your rate is $150/session, you’ll need 40 sessions/month. Factor in cancellations, holidays, and administrative tasks when planning.
This step is crucial. Private pay isn’t glamorous if it leaves you financially unstable. A clear financial plan sets realistic expectations.
Why Private Pay Works
It’s a common misconception that private pay is only viable in big cities. In reality, private pay clients exist in every state and across niches. You only need a small number of clients in your area willing to pay your full rate to sustain a practice.
Example: Even in a smaller town, 10–15 consistent private pay clients per week can provide a solid, livable income.
Stepping Stones for a Safer Transition
If going fully private pay feels too risky, there are hybrid approaches to consider. Each has pros and cons:
1. Insurance Paneling (Single Insurance)
Cons:
Must accept clients with that insurance
Limited flexibility to reserve spots for private pay
Must handle insurance billing
Pros:
Can fill your practice quickly
Provides access to clients with insurance coverage
Steady client flow
2. Third-Party Platforms (e.g., telehealth directories, private marketplaces)
Cons:
Often tied to venture-backed companies, many invested in insurance interests
May indirectly support systems that undermine individual therapists
Pros:
Easier to get on and off
No billing headaches
May provide referrals
3. Part-Time Job
Cons:
Less flexibility for client scheduling
May slow practice growth if hours are limited
Pros:
Consistent base income
May include health insurance
Reduces financial pressure as you build your practice
4. Full-Time Job
Cons:
Less personal time for building private pay clients
Private practice eats into personal or family time
Transition may take longer
Pros:
Higher and more predictable income
Can take your time building your private pay infrastructure
Allows you to invest in quality tools, website, and training
Make a Plan
Whatever route you choose, set a data-based transition plan. This gives you structure and prevents feeling stuck. Decide when you’ll fully commit to private pay or gradually scale up your private pay offerings while maintaining financial stability.
Example: Decide that in 12 months you will aim for 50% private pay clients, gradually increasing your rates and marketing efforts, while building a backup fund of $10K to support you when you make the transition a fully private pay practice.
Taking the Leap With Confidence
Going private pay from the start isn’t easy, and it comes with real challenges. There will be slow months, clients who ghost, and moments when you question if the risk was worth it. You’ll need to hustle for clients, manage your own billing, and handle all the uncertainty that comes with being fully accountable for your income.
That said, it’s not impossible. Private pay works for therapists who plan carefully, know their numbers, and accept that some discomfort is part of the process. It’s a choice that trades the security of insurance panels for control over your rates, clients, and schedule.
Done right, it can give you a practice that’s sustainable, self-directed, and truly yours.
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About the Author
Meet Audrey Schoen, a Licensed Marriage and Family Therapist (LMFT), business consultant, and entrepreneur, who has successfully launched her private practice. Audrey empowers private practice owners preparing to launch their practice, helping them avoid common mistakes and overcome challenges. Drawing from her years of experience in business development and marketing, Audrey specializes in simplifying complex information into clear, actionable steps. As a mother of twins and private practice owner, Audrey knows firsthand the struggle of balancing work, parenthood, and self-care. This inspired her to design a practice that fits her life, not the other way around. She's passionate about sharing her knowledge and experience to help other private practice owners launch their practices with confidence, avoid costly mistakes, and achieve their dreams.