Ever dreamed of opening your own private practice but not quite sure where to begin? APS CEO Dr Zena Burgess shares some advice to get you started.
All of us have spent years dedicating time and effort to becoming psychologists. However, if you’re looking to go out on your own and set up a private practice, there are extra skills you'll need to add to your toolkit.
There are many set-up considerations to keep in mind beyond psychological knowledge, such as learning financial management skills and how to develop a business growth plan, as well as important ethical and compliance factors that you need to be aware of.
Later this year, we are hosting the Business of Psychology Symposium, where a range of psychology and business experts will walk aspiring business owners through the fundamentals of setting up a private practice. Ahead of the symposium, here are some tips to help you polish your business acumen as you start your journey into private practice ownership.
Note: This is a non-extensive list of considerations. We will be diving into more depth on some of these topics at the symposium and always recommend you seek external, independent advice before starting your own business.
1. Legal and compliance matters
While going out on your own and running your own practice can be an exciting journey, it also introduces new risks for which you'll need to put prevention measures in place.
At the Symposium in May, we will be hosting a session with a legal expert who will share with delegates their views on the '10 tips to avoid being sued'. Other sessions will also unpack key legal/compliance measures to consider.
For example, before you start a private practice, you should consider:
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Registering for GST. Businesses with an annual turnover more than $75,000 must register for Goods and Services Tax (GST) and have an Australian Business Number (ABN), which is a number used by the government to identify your business dealing with Australian government departments and agencies.
Not-for-profits with a profit turnover of $150,000 or more also need to register for GST. Learn more about your GST obligations in this helpful APS explainer.
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Determine if you are a sole trader or company. If you choose to work as a sole trader, you can operate with an ABN. However, if you want to operate as a company – which means you will be bound to the rules and regulations set out by the Australian Securities and Investments Commission (ASIC) – you will need an Australian Company Number.
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Develop your business policies. For example, you will need to establish a Privacy Policy, drafted by a legal professional, if you collect client information or have over $3 million in annual revenue, as you are bound by the regulations set out in the Privacy Act.
It's also wise to develop a data-breach response plan in the unfortunate but becoming more likely situation where client information has been leaked. All policies and procedures should comply with the Australian Privacy Principles.
It’s also advisable to consider developing consent forms, for both in-person and telehealth services. Discover APS's helpful templates to get you started.
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Get your documentation in order. Once your business is set up in a compliant manner, it's time to start preparing the documents you'll need to run it. This could include service agreements, which provide clients with important details such as expectations around payment, cancellation policies and confidentiality details.
You should also consider preparing employment contracts if you plan on hiring any staff such as receptionist/administrative support or other psychologists. It's highly advisable that you seek legal assistance when doing this, as there are different employer obligations around hiring staff as permanent employees or contractors.
You also need to consider whether you will hire registered psychologists only or if you have the capacity to support a provisional psychologist with the relevant professional development and mentorship that's required.
2. Growing your business
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Create a budget that includes overhead costs (e.g. legal/accounting fees, rent, bills/utilities). You also want to factor in your own salary and the cost of buying and maintaining client management software.
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Consider what services you will offer. While you will be offering psychological intervention services, you may also want to consider if you will include things such as psychometrics and test kits, or training services for other psychologists.
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Develop a business growth plan which includes both short-term goals (e.g. 12 months) and long-term goals (e.g. 5 years). This way, you can plan to grow your business in a sustainable manner.
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Lean on the expert support available to you. As an APS member, you have access to a range of support via the APS Professional Advisory Service, which supports members to clarify practice and ethical issues including patient confidentiality, regulatory requirements, contracting and working with third party providers.
Members also have access to 20 minutes of free legal advice via our partnership with law firm Kennedys and, via our partnership with Aon, receive special rates for professional indemnity, public and products liability insurance.
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Develop a marketing plan. How will people find out about your services? As a starting point, you will want to develop an easy-to-navigate website that includes information about the psychologists in your practice (including their qualifications), fees, contact information and details about what you specialise in, which could help you stand out (i.e. burnout management or relational challenges).
We also encourage you to set up a profile on the APS 'Find a Psychologist' database, to help potential clients find you.
APS members can now create a premium profile, allowing clients to search by issue and giving you space to outline your College membership, a custom URL and a bio, and area of practice endorsement(s) and therapeutic approaches – which allows clients to search by issue and gives you space to outline your College membership.
Active members in 2023-24 with Member, Fellow or Honorary Fellow member grades are being offered a premium listing for free.
It can also help to establish a social media presence to promote your services, such as setting up a Facebook or Instagram account. However, if you do this, it's important to maintain compliance with the AHPRA advertising requirements.
Finally, learning how to market yourself to GPs and other possible referrers is also highly beneficial, as they will often be the people putting your services forward. Consider developing a referral strategy as part of your broader growth program.
3. Understanding Medicare
Navigating Medicare and the Better Access Initiative were hot topics for psychologists across Australia last year.
While the Better Access initiative has enabled millions of Australians to access effective and high-quality psychological treatment – including the permanent introduction of telehealth services for eligible people which enabled better support for those living in remote and regional areas of Australia – we know that ongoing reform is needed.
These are big-picture Medicare changes that APS is continuing to advocate for. However, there are important day-to-day considerations that you'll need to consider. There will be an entire session dedicated to this as part of the symposium, so here's a taste of what you'll learn about:
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Get your Medicare provider number. This is a unique number issued by Services Australia which identifies practitioners and where they are practising from. You cannot bill patients until you have this number. You can find the application form here.
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Ensure you understand the details of the GP Mental Health Treatment Plan – Under the Better Access to Mental Health Care initiative, a referral can come from a GP, psychiatrist or paediatrician. If referral is by a GP, they must complete a detailed assessment and diagnosis of the client as part of preparing a Mental Health Treatment Plan.
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Be prepared for a Medicare audit – If you are providing services under the Medicare Benefits Scheme, you may be subjected to a compliance audit. This is most likely to occur if data suggests your billing patterns differ greatly from other psychologists, but they can also occur at random.
You are required to retain documentation related to the Medicare service for a period of 24 months, including the medical practitioner’s referral, appointment and billing schedules and evidence that reporting requirements are met (at the six-session review and/or at completion of treatment, whichever comes first).
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Understand the rebate fees for 2023-24 – You can find that information here.
If you have any other questions about how the Medicare system works, you can find some FAQs here.
While many psychologists choose to work with Medicare clients, there are alternative schemes that you can look into, such as via:
Learn about what’s involved with each scheme. For example, some will require you to get a provider number, complete audits and use billing items for different rebates. There are pros and cons to consider for each option, so take the time to figure out an option that best works for you. Our Professional Advisory Service can offer members additional support and guidance.
Note: The information in this article is general in nature and does not constitute official business advice. APS encourages all readers to seek independent, expert advice before opening a private practice business.