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Financial Considerations For Counsellors, Psychologists and Psychotherapists In Private Practice

The spectre of fluctuating finances, and your ability to stay afloat through possible lean periods needs serious consideration.

It may well be that, in order to develop your business slowly and solidly, you'll continue to generate other, more regular income from either salaried counselling work or another part-time job. Unless you have sufficient funds to support you initially, or you live with someone in work who can support your first efforts financially, I do recommend that you consider starting your private practice in this way.

All businesses take time to develop, and most people starting up a business from scratch would not expect to do more than break even in the first year or two. Do take this into account.

Where making an accurate prediction of cash flow is essential to you, you should develop a Business Plan. A Business Plan is a statement of business objectives, followed by a description of how these objectives are to be achieved. Such a plan might cover a typical period of 1-3 years and is particularly applicable to small businesses and the self-employed who are starting a new business.

The reason for this is that 80% of new businesses fail within the first 5 years. However, by drawing up a Business Plan, the typical problem of inadequate cash flow may to be spotted before the business is even started and plans made accordingly, (including, of course, the possible decision of not starting the business at all).

What I'd ask of you at this stage is to ensure that you'll be able to exist moderately and pay your basic bills without particular reliance on therapy income for, say, the first year of your practice. This will enable you to develop your practice as you wish, and not feel pressured into taking more work than you can handle, or seeing difficult or unsuitable clients simply in order to ensure that your rent is paid.

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