How to start a psychology private practice: considerations for a thriving career

Disclaimer: The following guide is for informational purposes only. It’s important to conduct your own research and seek professional advice to ensure you understand your specific obligations for setting up a private practice.

Starting your own psychology private practice is an exciting milestone in your professional career. It can help you achieve greater autonomy while allowing you to shape your services, client care and the potential direction of your career to suit your needs.

This article covers some important considerations for psychologists in Australia who are looking to set up their own private practice. From navigating business requirements and choosing where you want to practice to bookkeeping and seeing clients, you'll learn some key aspects of setting up a private psychology practice, including helpful expert tips to get started.

Starting your psychology private practice: what to consider

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Embarking on the path to private practice requires careful thought, planning and execution. Completing your studies, setting everything up correctly from the start, supporting your clients and growing your business are all part of the journey. Here are some things to consider that can help you on your way.

Complete your studies to become a registered psychologist

Before you set up a private practice, you’ll firstly need to become a registered psychologist. Here is an overview of how to become qualified:

Pursue a study pathway toward psychology

Depending on your educational background and personal situation, there are different pathways available to you. You’ll need to complete a course accredited by the Australian Psychology Accreditation Council to get started.

You can complete a bachelor’s degree, such as the University of Canberra's Bachelor of Science in Psychology. This course is a three-year undergraduate degree that provides the opportunity for further psychology study at the honours and master’s levels. It offers a comprehensive foundation of psychology theory with a work-integrated learning component designed to give you valuable hands-on experience in psychology settings.

If you want to leverage your skills, knowledge and experience from a prior bachelor’s degree and career, consider James Cook University’s Graduate Diploma of Psychology (Bridging) course as a launchpad into further study to become a registered psychologist.

If you hold a UTS-recognised qualification, the University of Technology Sydney’s Graduate Diploma in Psychology is available to students as a pathway toward becoming a registered psychologist.

These courses provide a pathway to a fourth-year psychology course and eligibility for provisional registration as a psychologist. Then, you’ll need to complete either the higher degree pathway or the 5+1 pathway that lead to general registration as a psychologist.

The pathway you choose will depend on your career goals and whether you want to pursue one or more areas of practice endorsement (AoPE). The higher degree pathway allows you to pursue further study in an AoPE and the completion of a registrar program. Some specialised fields in psychology you can consider include clinical psychology, organisational psychology, forensic psychology or health psychology. Read more about the nine types of psychologists here. The 5+1 pathway does not involve an AoPE and leads to general registration. Learn more about the differences between holding general registration vs an AoPE here. Once you have satisfied the requirements of provisional registration as a psychologist, which includes an internship and passing grade on the National Psychology Exam, you can apply for general registration as a psychologist with the Psychology Board of Australia (PsyBA).

Once you have your general registration with or without an AoPE, you’re ready to enter the workforce as a qualified psychologist. If you’re interested in private practice, the sections below provide helpful information to get your business set up, get ready to see clients and expand your practice.

Set up your business foundations

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Adhere to legal, ethical and business requirements

Ensuring your practice is set up correctly and is legally compliant is an important first step. Check that you’re familiar with the PsyBA’s new Code of Conduct and Professional Competencies, which you’ll need to comply with to maintain general registration as a psychologist. No matter the clinical setting, if you want to practice as a psychologist, registration with the Psychology Board of Australia under Ahpra, is mandatory. The Psychology Board sets the standards of practice for psychologists, including professional codes of conduct, your professional development and annual renewal requirements. They also provide a wealth of helpful information regarding starting a practice.

As you’ll be working with clients and collecting sensitive and personal information, it’s essential to develop a privacy policy. Under the Privacy Act, you need to adhere to a range of privacy principles if you collect any client data in your practice. These principles relate to the collection, use and disclosure of client information and clients’ rights to access their personal information. It’s important to develop a privacy policy that’s relevant to your individual practice, clearly stating how you use client information, including storage, sharing and data recording.

It is also a good idea to develop a Terms of Service document that is publicly available to clients, for example, on your website, so that they understand how you will engage with them as a privately practicing psychologist.

You’ll also need to decide on your legal business structure, such as a sole trader, trust, partnership or company. A sole trader option may be suitable if you’re operating a business by yourself and providing professional services. This option is the simplest, gives you full control and also means you have full liability. If you choose this option, you’ll need to apply for an Australian Business Number (ABN).

Comparatively, a company’s business structure is a separate legal entity from you as a practitioner, which may offer greater protection, as you have less liability. This option has more complex compliance requirements and may not be necessary for a small business structure. If you decide to run your business through a company structure, you’ll need to register it and apply for an Australian Company Number (ACN).

Once you’ve established your business structure and have your ABN or ACN, you’ll need to register for Goods and Services Tax (GST). In Australia, businesses that have an annual turnover of $75,000 or more are required to register for GST. Seek advice from the Australian Taxation Office (ATO) regarding your obligations for GST registration and any other information regarding establishing a compliant business.

It is essential that you understand your obligations to the ATO when operating a business as a sole trader. For example, many small business owners neglect to accrue PAYG tax instalments (paid as part of the business activity statement (BAS) lodgement) in their first year of trade, which can leave them with a substantial tax debt to repay.

Protecting yourself and your practice with professional indemnity insurance is also essential. This covers you for legal costs and claims arising from an act, omission or breach of professional duty in the course of your practice. There are many insurers to choose from and for psychologists in private practice, doing your research to find the right policy that meets your professional needs is paramount.

Consider becoming a member of industry associations, such as the Australian Psychological Society (APS) or the Australian Association of Psychologists Inc (AAPi) to take advantage of membership benefits that include small business resources, CPD planning and access to practice resources.

Finally, as sole traders cannot be insured for accidental workplace injuries or illnesses under WorkCover, it is a good idea to consider income protection insurance in the event you are unable to work due to injury or illness.

Develop a comprehensive business plan

A well-designed business plan can help you turn your dream practice into a reality. It helps provide a roadmap, allowing you to think about all the important details of your business venture, including costs, target clients and future growth. The aim of a business plan is to ensure you have a clear direction and purpose, helping you to set goals and identify potential risks with a plan of action. You’ll have a better idea of why you’re doing what you’re doing and how to make it all happen.

Remember, your business may evolve over time, however, having a broad overview of what you want to achieve can help ensure you reach your business goals. Some important things to think about when developing a business plan can include:

• Your business vision, mission and ‘why’ statement
• Your target market (your ideal clients) and services you’ll provide
• Identifying risks and developing mitigation strategies
• Finances, start-up costs and cash-flow forecasts

Having as much detail in your business plan from the start can help you in the long run. For example, regarding your target market, think about whether you want to offer group therapy sessions, couples counselling or provide corporate services. You may want to work in a specific niche, such as women’s health or men’s health. Or, if you want to operate within your area of practice endorsement, you may want to work in health psychology, educational and developmental psychology or clinical psychology.

Many psychologists choose to combine their private practice work with salaried employment to diversify the nature of their work and make managing a business easier.

You don’t need to have a business degree to develop a solid business plan for your practice. A helpful starting point is to explore the range of available resources and services from Australian Government websites, such as the ATO or Business portals, to get started.

Consider your practice location

Where you choose to practice can have a significant impact on your clients, your work-life balance and your overall business costs. Some options to consider include:

Multidisciplinary clinics: Renting a room in an established clinic can be a great way to start out. This option can mean you have a built-in referral network, can collaborate with professionals from other healthcare disciplines and share administrative support. Depending on the overarching business model, you may be able to rent the room for a set daily fee or establish a fee split option that may fluctuate with your caseload of clients.

Solo practitioner office: Locating and leasing an entire room in a dedicated space gives you greater control over your work environment. This option sometimes attracts higher overhead, administrative costs and individual responsibility for maintaining the space.

Home-based practice: Setting up a practice at home can be cost-effective and convenient, offering good work-life balance and no daily commute to work. However, you should ensure you have a professional, private space that is separate from your personal living areas and take care to comply with any relevant council regulations for operating a business from home.

Telehealth services: A fully remote telehealth practice is an increasingly popular option for healthcare providers, including psychologists. This option delivers maximum flexibility, greater client reach and eliminates many overhead costs related to a physical practice. To offer a successful and client-centred service, you’ll need to make sure client privacy practices are robust. You’ll also need reliable internet connectivity and software to accommodate a viable telehealth service.

It’s also possible to conduct your private practice with a blended model of in-person and remote telehealth care, whether it’s from the comfort of your home, a clinic or multimodality practice.

Workplace Health and Safety considerations

Ensuring your practice is compliant with Workplace Health and Safety (WHS) guidelines is another important part of building a safe and successful business for you, your clients and anyone involved in your workplace.

These rules apply to a variety of premises, including solo practitioner practices or telehealth environments and involve identifying potential hazards, implementing risk management strategies and having clear procedures for emergencies.

SafeWork Australia provides the overarching guidelines and each state and territory regulates and enforces WHS laws. Your WHS policy should be tailored to your specific workspace, practice model and jurisdiction.

Prepare to support your clients

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Obtain your Medicare provider number and set your fees

Understanding how Medicare works is important, so you can support clients who want to access your services under government health schemes. First, you’ll need to register with Medicare and obtain a provider number. This number is specific to you and allows clients to receive Medicare rebates for your services. Certain services require clients to obtain a GP referral, such as an Enhanced Primary Care Plan or Mental Health Care Plan. You may also wish to become a National Disability Insurance Scheme (NDIS) provider to support clients with a disability to achieve better mental health and wellbeing.

Establishing a competitive fee structure is another important part of setting up your private practice. Ideally, you’ve considered this step as part of developing your business plan. However, there are many factors that play into how much you should charge for your services, which can evolve over time.

You might start by familiarising yourself with the applicable Medicare rebates for your services. It can also help to research other local psychologists' fees and decide on a fee structure that is both sustainable for your business, competitive and aligns with the value of your service and experience level. You may also want to consider establishing rates for short, standard or longer sessions, as well as assessment and report writing.

Luke Lawrence from Explore Psychology made a career change from finance into psychology in his mid-30s. To learn more about his story, read more here. Luke’s advice for clinicians with regard to setting fees for their services is to consider what’s affordable to clients and also what you need to earn to sustain your business and lifestyle. He admits there’s no simple answer, however, referring to the Australian Psychological Society (APS) or the Australian Association of Psychologists (AAPi) on their recommendations for fee setting would be helpful if you’re in doubt.

Organise your admin and bookkeeping system

Efficient administrative systems ensure smooth behind the scenes processes to support a successful clinical practice. You'll need to make decisions about booking systems or software, payment systems and client record keeping.

For booking systems, consider whether you want to have an online booking system, phone bookings, manage your appointments manually or engage a virtual assistant for additional support. For payment systems, you’ll need to consider the various payment methods you want to integrate into your practice. You will need to research point-of-sale software, EFTPOS terminals or online payment gateways.

In terms of record keeping, you’ll need a secure system for storing client records that is compliant with privacy laws. Paper-based client notes need to be securely stored and locked away. Many cloud-based practice management systems offer robust security features and are easily accessible wherever your practice location may be.

There are many platforms that have a fully integrated software for appointments, note-taking, invoicing, business reporting and client communications. If you’re looking to scale your practice in the future, this option helps automate and streamline all the administrative tasks so you can focus more on client care. It’s also worthwhile considering how emerging AI technologies could support your psychology practice, being mindful of your client privacy and data security responsibilities.

It’s also a great idea to research subscriptions with online training platforms and therapeutic resource sites, as these can offer CPD hours training and materials to support your practice at a reasonable cost.

Attract your clients

Your practice has been set up and you’re ready to start seeing clients. Whether you have a brick and mortar clinic, a telehealth practice or a mix of both, investing in attracting and retaining clients can help you maintain a busy and successful practice for years to come.

Building a strong professional brand as a psychologist in private practice should be a key strategy. A well-designed website, business name, logo and story can go a long way in highlighting who you are as a practitioner and what makes your services unique. If you feel you need support with marketing, social media platforms or other strategies to get your name out there, it might be worthwhile working with a branding or marketing professional.

As Luke highlights, one of the challenges associated with starting a private practice was increasing his visibility to clients and marketing. Some successful strategies for building awareness of his business arose from contacting other health providers and informing them of his services. “[I] reached out directly to about 50 GPs in the area.. Just with a letter.” The simplicity of showing up to meet practice managers or clinic managers to let them know he was ready and available to take on new clients helped build his referral network and client base in the early stages of his practice.

Grow your private psychology practice

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Build your professional network

Making connections and building your network has a range of benefits to your practice. It helps strengthen your professional authority, opens new career opportunities, improves visibility to clients and can promote better client care.

Joining industry associations such as the APS allows you to connect with like-minded colleagues to share information or seek mentorship opportunities, which can help expand your practice into new horizons. Attending conferences, workshops or seminars can help you advance your skills and allow you to network with other professionals. You might discover an innovative care approach, meet industry experts or explore a new area of interest that could enhance your practice, services offered and the quality of care you provide to your clients.

The ‘Find a Psychologist’ register on the APS website and subscription to Psychology Today can be an effective way to reach prospective clients needing psychological support.

Maintain your professional development requirements

As the field of psychology is constantly evolving, a commitment to lifelong learning is essential for maintaining competencies, staying competitive and enjoying a fulfilling career. The professional development requirements for psychologists include 30 hours of CPD activities, with at least 10 of these hours dedicated to peer consultation and supervision.

It’s important as a private practice psychologist that you reflect on your practice and identify some areas for development along with a plan for how you can achieve them. You can complete self-directed learning modules, read or contribute articles to various industry-relevant publications or complete further study in an area of professional interest.

Upskill with postgraduate study

Pursuing additional specialised postgraduate study in psychology can deepen your competence in a particular field or expand your knowledge into a new area. You can explore graduate certificates, graduate diplomas and master’s degrees to suit your career needs and professional aspirations.

Completing further postgraduate education to complement your existing qualifications can be a meaningful way to distinguish your practice and attract your ideal clients. For example, if you have a specific interest in trauma-informed care, the University of Sydney (USYD) offers several courses for practising psychologists to upskill with advanced knowledge in this field. The Graduate Certificate in Science in Medicine (Trauma-Informed Psychotherapy) equips graduates with a range of skills to address clients with chronic complex trauma, post-trauma disorders, anxiety and personality disorders and other related mental health conditions.

You may also choose to continue your studies with USYD’s Graduate Diploma in Science in Medicine (Trauma-Informed Psychotherapy) or pursue a comprehensive qualification with their Master of Science in Medicine (Trauma-Informed Psychotherapy) to build your expertise and practice.

Why start your own private practice?

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Starting your own private practice as a psychologist offers numerous advantages that can align with your professional growth and personal fulfillment. Here are five reasons why pursuing this path can be highly rewarding:

Enjoy greater professional autonomy

If you’re a solo practitioner, running your own practice gives you the freedom to make decisions without needing approval from an employer or organisation. You can set your own schedule, determine the services you provide and design a workday that suits your lifestyle. This level of autonomy means you can begin to take charge of your career and build a practice that reflects your vision. Whether you want to incorporate telehealth services, offer workshops or provide therapeutic group sessions, you have the freedom to evolve your practice to meet both your interests and emerging trends in the field.

Tailor your practice to your ideal client type

Private practice gives you the opportunity to focus on the client demographic or niche that you are genuinely passionate about helping. This may be as a general psychologist, working with a variety of client presentations to support better mental health and wellbeing. Or, if you have one or more of the nine areas of practice endorsement in your scope of practice, you can tailor your business toward your preferred client type. This could be particularly beneficial if you work within a multimodality practice that supports a specific client niche, as you can build your authority and expertise in a specific area while enjoying a fulfilling career path.

Provide a personalised service

A private practice setting allows you to offer highly personalised, meaningful care in a way that suits you, your clients and your business. If you were to work for an organisation or for another healthcare provider, you may need to operate within the confines of their workplace rules or methodology. There may be external metrics to meet or time restrictions regarding consultation length. Instead, when you have your own practice, you can dedicate the necessary time and attention to each individual client, whether it’s within a one-on-one session, couples therapy or group session. You can work in a way that meets the needs of your client without having to meet the needs of other parties.

Build a lucrative clinical practice

Owning and operating your practice can be financially rewarding. Compared to other career pathways in psychology, such as salary work in schools or nonprofit organisations, as a private practitioner, you can set your fees, control your caseload of clients and ultimately retain a greater portion of your earnings in the long term. You may also diversify your income through services like workshops or consulting. Depending on your preferences, there is a great potential for future financial growth in private practice.

Benefit from professional growth opportunities

As your client base grows, you have the potential to expand your business and perhaps even hire other professionals. This opens up opportunities for further networking, innovation, research or collaboration with colleagues, all of which can contribute to ongoing learning, improved client outcomes and career advancement. Scaling your business can mean you broaden your services or perhaps even open a subsequent clinic. You’ll be able to shape your career direction and build a psychology practice that aligns with your interests, strengths and ambitions. While managing a private practice can come with a raft of professional and personal benefits, it’s important that all psychologists engage in self-care to ensure longevity of practice, as well as seeking support from a supervisor (peer or professional) who can advise on practice management issues.

Expand your psychology career in private practice

The decision to establish your own private practice can be achieved with some intentional forethought, research and support along the way.

Pursuing postgraduate study can help you stay current, develop new skills and tailor your practice to suit your clients and your career goals. While it comes with significant responsibility, the reward of building something of your own and making a direct impact on your clients can make starting a private psychology practice worthwhile.

If you’re ready to expand your knowledge, explore the range of psychology courses, select a course and enquire with our Education Consultant today, who can help you with your enquiry.

At GlobalHealth Education, we partner with respected universities to offer courses in a range of healthcare fields. We also showcase courses from various Australian universities. Besides psychology, these include nursing, health leadership and management, counselling, public health, social work and mental health. Transform your career in healthcare and enquire today.