Links

Do you want more support to build a practice that does more than therapy? Come over and join the community at www.drrosie.co.uk

Check out the upcoming self publishing workshop for the Do More Than Therapy members at www.drrosie.co.uk

Catherine France, insurance expert: https://www.catherinefrance.com/

WriteUpp practice management software (affiliate link because I LOVE it) https://writeupp.com/default.aspx?refid=7168

Zoom video conferencing software www.zoom.us

Blog post: What needs to be in a psychology practice business plan:

How much does setting up a psychology private practice cost?

Money Out

As psychologists, therapists or counsellors we are very lucky in that it is possible for us to build what is known as a “cockroach” business. Basically this means we often don’t need much investment to start up as our skills are valuable. This also means we are less likely to run into financial trouble than a business like a hair salon that requires lots of loans at the beginning. BUT however frugal you are there are still costs associated with running a business. If you are not careful these can creep up on you and lead to a disappointing end of month.

It felt quite scary for me to write this as I know that I don’t always make perfect financial decisions. However, I have learned a lot the hard way and I wanted to share that with you so here is a break down of the costs I have discovered on my private psychology practice journey.

Tax. The one everyone knows about.

You need to register for self assessment with HMRC. This is very easy on the direct.gov website. If you are a sole trader you just tell HMRC and away you go. Keep good records of any money you spend and save every receipt and this is incredibly easy. I fully recommend software like FreeAgent which allows you to link to your bank account, explain every transaction as you go and upload receipts. There are lots out there but FreeAgent came free with my Natwest business banking and was very easy to use. Others that I have heard good things about are Xero and Quickbooks. The advantage of these is that when it comes to submitting your tax return you can do it with the click of a button. You could also just snap a photo of any receipt and/or screenshot email receipts and save them into a google drive folder. Self assessment for a sole trader is actually incredibly easy if you have kept good records of your transactions. I am going to get an accountant on the podcast to talk about it but honestly, I am mathematically challenged and have never struggled. Ltd company accounts are another beast all together so if you are a Ltd company or social enterprise don’t try to work it out yourself, get an accountant.

I am obviously not a qualified accountant and you should speak to someone qualified about your specific circumstances. As a guideline however, most people seem to agree that setting aside 25% of your earnings in a separate account specifically for tax is sensible. If you are like me you will have a lot of allowable expenses that may mean you don’t need everything you save for your tax bill but I wouldn’t try and work it out. Just keep 25% back from the beginning and enjoy the bonus if you don’t need it all.

Set Up Costs for a Psychology Private Practice

Professional website - £1000. This can be done MUCH cheaper but having a rubbish website can really undermine your credibility. Your site will also be crucial if you want people to find you online. You will need good search engine optimisation for that and a DIY website from a creator like Wix or Squarespace won’t rank as highly as Wordpress or coded from scratch sites. Having said that don’t let this stop you getting started. All you need to get going is a landing page where people can send you an email. You can easily create this yourself with something like Leadpages or Squarespace. It won’t be your forever website but it is good enough to get going! You will also need to budget for hosting of your website and some other running costs but if you do it through a pro or a platform like Squarespace or Leadpages this is all covered for you.

Training – I was really lucky that I got access to a free business course when I was first setting up in private practice. This was brilliant and I would definitely pay for one if I needed it. Natwest run mini business courses and trainings and organisations such as the Federation of Small Businesses (FSB) also provide courses for their members. There are also special trainings available for people setting up social enterprises and many of these have government funding. They tend to be postcode dependent so the best strategy is a google search to find what is local to you. I hope to interview some amazing social entrepreneurs on the podcast in series one so you can see how it is done.

Design – If you want a business that grows online then you need a “brand”. This is because you need people to recognise you amongst all of the traffic and noise online and you want them to feel comfortable and at home with you. Like they always know what they are going to get when they come to you. A bit like how you hope they feel when they come to therapy. The most obvious type of branding that we all think of is a logo but the minimum I would recommend is a logo, some consistent colours and consistent fonts that you always use in everything you create for your business. Whether that be your website, blog posts or social media banners. I invested in professional help with this from the beginning as I cannot think in a visual way and to be honest that is what I recommend. Prices for this vary wildly from the ridiculously cheap (on sites such as Fiverr you can get logo design for a £5) to the mega bucks that big companies spend. To be honest this is an area where you mostly get what you pay for. If you want someone who understands who you are trying to reach with your business and why it all matters to you then you are going to need to pay them for their expertise. Get a few quotes, check out their work on Instagram and see who you think can help bring your vision to life for your budget. If budget is very tight you can use tools like CANVA to DIY your branding and then upgrade as you bring money in.

Running Costs of a Psychology Private Practice

Every business is different. I’m in Plymouth in the UK at the moment and I rent an office that is exclusively mine. These are some approximations of my monthly expenses for my private practice which consists of 1:1 therapy (face to face and online), couples therapy, hypnobirthing classes and ebooks for parents.

It feels scary to share this (money mindset and everything) but I wish someone had shown me this before I went full time in my practice as I had no idea it would cost this much to run a one person practice!

Rent - £300. I have exclusive use of my office in Plymouth. I know how incredibly lucky I am…

Internet and electricity - £45. I need really good broadband for online therapy and my landlord lumps this together with my electricity bill.

Parking - £5 a month.

Email marketing – £30. If you are building any kind of audience that you hope will buy something or use your service you need to collect email addresses. To stay GDPR compliant and be able to email them all in one go (without them all knowing each other’s names) you need some email marketing software. You can get a free version of MailChimp or similar which is great to start out with but they start charging you once you get over 1000 people on your list.

Zoom - £10. I deliver online therapy so use the paid version of Zoom for video sessions. It is GDPR compliant and secure.

Practice management software - £35. I use WriteUpp to hold all my data, organise my client work and notes and keep everything GDPR compliant. It is brilliant once you get to the point that you can’t keep it all in your head anymore. It also offers an online booking feature that busy clients really love.

Equipment - £80. I lease a computer as we only had one laptop in the family and it annoyed my husband how often a needed to use it. I also offer online therapy so being able to plug in to a router is very important to me.

CPD!!! By far my biggest expense and very hard to quantify. Any leftover money I have goes on training. Sometimes this is guided by my passion for our profession and sometimes it is driven by imposter syndrome. I would budget to do at least two trainings a year as you will get excited by things… It is common for good training to cost around £1000 but it is sometimes less. Still I think around £160 a month is a good way to budget for it.

VA (an amazing woman who helps me with invoices and diary management) - £150. I probably need to give her more work to be honest. If you are full time in your business you cannot do the admin all yourself as you won’t have time to see clients or think about anything!

Social media help - £325. A lovely lady who makes my words look pretty, schedules stuff and tells me what is working. This is very valuable if you need an online a