Money Matters

Financial calculations

Like many clinical students, Renee Hoekstra, PsyD, spent most of her time during graduate school mastering the craft of clinical assessment and psychotherapy, writing her dissertation and studying for her qualifying exams. Learning how to sit on an insurance panel, negotiate a contract or develop a business plan to open her own practice seemed like skills she could pick up through working at a group practice later on.

But when her plans changed and she decided to start her own private practice after licensure, she realized just how much she didn't know about starting and managing her own business.

"Even though I had a great business of psychology class in graduate school, I still had so many questions about how to actually start and manage my own practice," she says.

Hoekstra's story is all too common, says David Ballard, PsyD, MBA, APA's assistant executive director for corporate relations and business strategy.

"Most graduate training programs provide little guidance about the realities of practice and the business skills necessary to provide high-quality psychological services in today's marketplace," Ballard says.

But by taking the time to learn these skills, students can emerge from school better prepared for the real-life experiences they'll face in practice.

Here are some tips on how to do that:

Take business courses. Some psychology graduate programs offer semester-long courses on business planning, says Jeffrey Barnett, PsyD, co-author of "Financial Success in Mental Health Practice" (APA, 2009). These courses teach you how to navigate state licensure requirements as well as regulations, such as the Health Insurance Portability and Accountability Act. They also help you identify niche services that meet emerging community needs, such as helping people work through anxiety about money problems.

Push to create a class. If your program doesn't offer business classes, ask to help develop a seminar or brown-bag series on practice management topics. Last fall, the National Council of Schools and Programs in Professional Psychology, APA's Practice Organization and APA's Div. 42 (Psychologists in Independent Practice) developed a model syllabus for a course on practice management that APAGS and other groups can use for developing such seminars. The syllabus provides seminar topic ideas and lists resources detailing the management and administrative skills students will need to establish and maintain a practice.

In addition, APA's Practice Organization and state psychological associations also offer continuing-education courses on professional psychology topics, Ballard says. While oriented toward licensed psychologists, these programs may inform you of the challenges you may experience in starting a practice. You might also want to audit a general business course at your university or scout out courses offered through small business associations and other groups in your community.

Become a Business Week junkie. "Picking up the latest business books and browsing relevant periodicals is a great way to get some exposure to tips and trends," Ballard says. Regularly read such publications as Fast Company, The Wall Street Journal, Business Week and the Harvard Business Review. Also, browse Web sites of organizations such as the U.S. Chamber of Commerce Small Business Center and the U.S. Small Business Administration to learn business lingo and current trends.

Network. Ask group practices and successful psychologists in independent practice if you can come in for informational interviews. Find out how they got started, how they run their accounting, how they arrange their patient data, the hurdles they faced in getting on insurance panels and the factors that make their practices successful, suggests Hoekstra. Ballard also recommends networking with nonpsychologists by joining a local chamber of commerce or business owners association.

Find a practice adviser. Hoekstra joined Div. 42's mentoring program for students and professionals, but students can also find professional mentors through divisions and state and local psychological associations. These programs allow you to meet established practitioners who can show you the ropes of practice management.

"Just as students need to have clinical supervisors, they also need to have someone to guide and mentor them on the business side of psychology," Barnett says.

By Amy Novotney

Amy Novotney is a writer in Chicago.

Further Reading, Resources

  • APA Div. 42 (Psychologists in Independent Practice)

  • APA Practice Organization Practice Management Web site

  • Kottler, J.A. & Hazler, R.J. (1997). What You Never Learned in Graduate School: A Survival Guide for Therapists. New York: W.W. Norton and Company.

  • Pope, K.S. & Vasquez, M.J.T. (2005). How to Survive and Thrive as a Therapist: Information, Ideas, and Resources for Psychologists in Practice. Washington, DC: APA.

  • Walfish, S. & Barnett, J.E. (2009). Financial Success in Mental Health Practice: Essential Tools and Strategies for Practitioners. Washington, DC: APA.