Setting up a Private Practice: Top tips for sole trader practitioners
13 January 2021
Are you thinking about setting up your own private practice? There are a number of things that you need to consider and implement in order to get this up and running, and to ensure a successful business.
As a sole practitioner one of the keys to running a successful and risk free practice is to remember one simple thing – you are running a business! You will need to consider and implement procedures and practices which you may well have little or no experience including; income tax, health & safety, employment law and insurance and marketing.
It is important to be aware of, and implement good business practices at the beginning of setting up your practice. This will help to minimise your exposure to risk. We provide some tips of where to start and what to look at when setting up your practice.
1. Register your business
It is easy to slide into running a practice by seeing a few clients/patients “on the side”. From the outset you should register your business with HMRC. Most likely to begin with you will be registering as a self-employed sole-trader (even if you have a PAYE job elsewhere at the same time). You will need to fill in a form with HM Revenue and Customs, which you can do online here.
2. Look at possible conflicts of interest
As a practitioner running a business, there may be conflicts of interest between care and business needs – these are easier to manage if you decide how you will handle these in advance. This could include how you manage payments by clients, staffing and confidentiality. Codes of Ethics and Ethical Frameworks issued by your professional body will often give guidance on clear contracting to ensure clients and staff understand what is required of them from the outset.
3. Think about whether you can manage multiple roles
When you first set up your private practice, you most likely will not have the benefit of a full staffing team. You will usually have to fulfil all roles from cleaner, sales and marketing, credit control and Managing Director. If you do not feel comfortable or confident with your skills in a particular area then consider contracting out that part of your business. For example, if you are baffled by accounts buy in the services of a bookkeeper.
TIP: If you are unsure of where to find the specialist skills you are looking for, then ask around! Other private practices and small business start-ups are likely to have the same needs, and it is much better to have someone that comes with a good recommendation.
4. Consider a short business start-up course
On the other hand, if you are looking to develop these skills yourself, or if you would like some guidance on how to start up and run a small business, don’t be afraid to go on a business start-up course through a business enterprise centre. These are usually available in all major towns, are relatively inexpensive, can provide on-going support to you whilst you start your business and link you to a network of other people also starting their own business. Remember to keep the invoice to put through your accounts!
5. Set up a business bank account
It is important that you keep your personal and business banking separate. Shop around to work out which bank best fits your needs and working framework. Most will be able to provide lots of useful materials and information to help you set up your business. If you open a business bank account you will probably be eligible for free banking between 12 and 18 months. Once you are no longer eligible for free business banking, ensure you have a business account that you can manage online – these are usually cheaper to run and will help you keep your charges right down.
IMPORTANT: Whilst banks are an excellent source of advice to small businesses, they may also try and sell you associated products including insurance. It is important to remember that, as a psychological therapist, you will need a specialist professional liability insurance to ensure that you are protected for your particular line of work. A simple public liability insurance is not adequate.
6. Set up procedures for recording income and expenditure
It is important for you to keep a good record of your income and expenditure from the beginning.
Income: to keep a record of the money you earn simply buy a duplicate invoice book and give an invoice/receipt to your client each time they pay you. Sorting out payment at the beginning of the session will help to avoid it being forgotten about. Remember, your accountant and/or bookkeeper (if you have one) will see all your financial records, so you do not have to put the clients name on the invoice and instead code these to comply with confidentiality.
Expenses: Expenses are set against the income, so you will pay tax on the profit, not the income. It is worth looking into the items that you can claim as a legitimate business expense against your business, as some may surprise you. Keep receipts for everything you can think of; training, conferences, CPD, books, supervision, therapy, lighting, heating, phones etc. If you work from home, you will need to discuss with your accountant the proportion of your bills that you can offset against the business.
7. Consider how you will attract clients
When you are preparing to start your new practice, you will need to think carefully about your marketing and advertising strategy to attract new clients. It is difficult to rely on word-of-mouth alone. Look at how others advertise themselves locally for inspiration – but be careful not to plagiarise. If you can offer something different this should form the basis for your marketing and may just catch the interest of someone seeking your services.
8. Think about health and safety
Health and safety legislation applies to everyone who is responsible for the safety of others – either staff or clients. You must provide an environment for therapy which is free from potential hazards, and where both the client and you feel safe and secure. For the latest health and safety legislation visit the HSE website. Sessions will work much better if both you and your client feel comfortable in your environment.
Tips for making your client feel safe and secure:
- Try to avoid having them wait outside – particularly in the dark
- Be aware of others they may encounter if they are invited before you are ready to see them, especially if working from home
You also need to think about your own safety. In private practice you may be more vulnerable than if you were working with an organisation or an agency:
- If you are going to be working alone in a building, even at home, keep a mobile phone close at hand (make sure it is on silent during sessions).
9. Join a professional support network
Working alone in private practice has a number of challenges including professional isolation, having no one to bounce ideas off and no organisational structure to fit neatly into. You can establish a professional support community, for example by joining a local peer group. They will help to support you in the development of your private practice as well as helping you to manage the issues arising from your client case load. You can also establish links with the local psychological therapy services network. This will help build your reputation locally and will also be useful for making and receiving onward referrals.
10. Understand your limits
Never be tempted to work beyond the limits of your competence and always read and understand your Code of Ethics or Ethical Framework from your professional association and be aware of what they say about working within your limits. Always look at your motives for taking on a client – if a client, either new or existing, presents with a problem or starts to disclose things which are outside the limits of your competence or experience, recognise it and stop to think. If necessary, discuss with your supervisor and if appropriate, make a referral on to someone with the necessary experience.
Think very carefully if you are asked to do something that you have never done before. For example, if a client asks you to write a letter to be used in the context of Court proceedings, ask yourself if you fully understand what is being asked of you and the potential ramifications. If you are uncertain then seek advice.
11. Make sure you understand confidentiality and data protection laws
While you will be aware of your duty of confidentiality to your clients you should also remember that complete confidentiality can never be guaranteed. There are circumstances where disclosure might have to be made, for example where the safety of a child is at risk. Be sure that your client understands the ultimate limits of the confidentiality and also your policy on record keeping and obtain their consent. You will usually do this at the contracting stage or have it written into your terms and conditions.
There can be a reluctance to have a written contract with clients. However, it can be very helpful to set out, at the outset of the relationship with a client, issues relating to confidentiality, when confidentiality may be broken, how notes will be kept, etc. This can be of great assistance if you do subsequently face a situation where you are assessing whether, for example, action needs to be taken in respect of a disclosure made – if this has been raised in a contract at the outset it can make the position clearer and easier to manage
If you keep notes on the content of therapy sessions as well as factual information such as dates and times of sessions, be careful to separate fact from opinion and remember that your client is entitled under Data Protection laws to have access to information kept about them, including process notes. Keep all of your records in a secure manner. Also remember that if you store any data electronically you need to register as a data controller with the Information Commissioners Office.
Be particularly mindful of anything that you write relating to clients, be it in the form of notes, correspondence, emails, reports, etc. Although you may think that the document will only be seen by the client or the person to whom the communication is addressed, it is always possible that, via a Subject Access Request or an Order of a Court, a document will end up being more widely shared – be aware of this possibility!
12. Check terms and if you have the right work from home
If you intend to work at or from home, you should be aware that the part of your home used as an 'office or consulting room' may be liable to business rates whilst the remainder of the property will continue to be liable to council tax. For further information contact the Valuation Officer responsible for your area. If you live in a flat, or other leasehold property, you should check that the terms of the lease do not prohibit running a business from home.
You should also check with your home insurers to ensure that your policy cover is not invalidated if your home is also used for business purposes, particularly if you are seeing clients at home. Whilst it is not necessary for your home insurers to provide cover for your liability for injury to business visitors or clients, this should be covered by your Professional Liability Insurance, insurers may be concerned at the risk of any loss or damage to your home and its contents caused by your business visitors. They may apply restrictions, particularly in respect of thefts from your home which do not involve forcible entry. If you do not tell them you have business visitors, you could find that your policy is invalidated.
13. Get the right insurance
It is crucial that you have good Professional Liability Insurance. This will help you if you find yourself in a situation where a client make a claim against you, if you are faced with a complaint to your professional body or other regulator, or even if someone if injured on your premises.
Other insurance policies you may need to consider include:
- Therapy room insurance: If you work from premises other than your home you may need separate therapy room insurance to cover loss or damage to contents. Remember to include any equipment away from the office.
- If you have any employees, even a part-time bookkeeper (but not self-employed contractors), then the law requires you to have Employers Liability Insurance.