Mental Health Private Practice Business Plan Template
If you want to start a mental health practice or expand your current practice, you need a business plan.
The following Mental Health Private Practice business plan template gives you the key elements to include in a winning business plan. In addition to this template, a solid plan will also include market research to help you better understand market trends, your competitive advantage and your target customers. It will also help you craft your mission statement, marketing plan and strong financial projections.
Mental Health Private Practice Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a new mental health private practice located in [Location]. The clinic helps individuals with a wide variety of mental health related concerns including managing mental health conditions, improving relationships, and coping with life’s challenges. Though we currently only provide therapy to individuals, we hope to expand our services soon to provide couples therapy, group therapy, and medication management services.
[Company Name] is currently solely run by [Founder’s Name], who has been a licensed counselor for ten years. She helps her clients using a variety of therapy modalities including Cognitive Behavioral Therapy (CBT), Dialectical Behavioral Therapy (DBT), and Interpersonal Therapy. Her experience has provided her with the skills and compassion necessary to run a successful clinic and help hundreds of clients with their mental health concerns.
Products Served
[Company Name] will provide a variety of therapy services for individuals living in the [Location] area. Clients can come to [Company Name] with any mental health concern they are struggling with, including mental illness or particular life challenges. Though, [Founder’s Name] is currently the only therapist employed by the clinic, [Company Name] will hire several other mental health professionals with unique backgrounds, education, and experiences to better help our diverse clientele. [Company Name] will also hire a psychiatrist to assist with the diagnosis of mental disorders and provide medication management.
[Company Name] will work with a list of insurance companies to ensure as many people as possible have coverage to receive mental health care from us.
Customer Focus
[Company Name] will serve the residents living in the [Location] area. The area has a higher median income than most cities, which means most residents have the disposable income to invest in mental health care.
The demographics of the area are as follows:
- 74,203 residents
- Median income of $75,000
- Median age of 37
Management Team
[Company Name] is led and run by [Founder’s Name]. [Founder’s Name] is a graduate from [University] and has been a licensed counselor for ten years. She uses several therapy modalities to help her clients, including Cognitive Behavioral Therapy (CBT), Dialectical Behavioral Therapy (DBT), and Interpersonal Therapy. After the clinic is established, she will employ other therapists and psychiatrists who can provide a more diverse list of mental health services.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The management team has a track record of success in the mental health private practice industry.
- [Founder’s Name] is experienced in several therapy techniques to help a variety of clients with their mental health concerns.
- [Company Name] is hiring and will continue to hire therapists and psychiatrists with diverse backgrounds in order to cater to the diverse needs of the residents of [Location].
- [Company Name] will accept most insurance plans.
Financial Highlights
[Company Name] is currently seeking $180,000 to launch. Specifically, these funds will be used as follows:
- Office interior design: $20,000
- Technology and equipment: $50,000
- Other office and counseling supplies: $10,000
- Working capital: $100,000 for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name]’s mission is to help local individuals cope or work through their mental health related concerns. We can help with a variety of issues, including relationship problems, trauma, grief, and managing a mental illness. We currently only provide mental health services to individuals, but will soon hire mental health professionals who can work with couples, provide psychiatric services, and run group therapy sessions.
[Company Name] is currently solely run by [Founder’s Name], who has been a licensed counselor for ten years. She has been trained in multiple therapy modalities including Cognitive Behavioral Therapy (CBT), Dialectical Behavioral Therapy (DBT), and Interpersonal Therapy. She is extremely passionate about running a private practice that can help anyone struggling with their mental health. Furthermore, she conducted a survey and found that many people in the community would benefit from this practice and expressed interest in signing up for our mental health services.
[Company Name]’s History
After surveying the local client base and finding a potential office location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation]. Currently, the business is being run remotely out of [Founder’s Name]’s home office, but once a lease is finalized, all operations will run from there.
Since incorporation, [Company Name] has achieved the following milestones:
- Found a potential office space and signed a Letter of Intent to lease it
- Developed the clinic’s name, logo, social media accounts, and website located at [website]
- Determined clinic design and required equipment
[Company Name]’s Products/Services
[Company Name] currently provides counseling services to individuals struggling with life challenges or mental health concerns. This can include managing a mental health condition, coping with grief, healing from trauma, and working through relationship problems.
Currently, [Founder’s Name] is the only therapist employed by the clinic. However, [Company Name] will hire several other mental health professionals with unique backgrounds, education, and experiences to better help our diverse clientele. Therefore, we hope to offer several other mental health services in the future, including couples counseling, group counseling, and medication management.
[Company Name] will work with a list of insurance companies to ensure as many people as possible have coverage to receive mental health care from us.
III. Industry Analysis
The past few years have seen a revolution in the mental health industry. More people than ever before now understand how essential it is to talk to a mental health professional about one’s mental health and challenges. As a result, mental health professionals are rising in demand, which is expanding the industry at a historic rate.
Mental health private practices help clients with a wide range of issues. This can include helping cope with or heal from mental health conditions (such as depression, anxiety, eating disorders, or bipolar disorder), providing guidance on interpersonal matters, or helping clients cope or work through life’s challenges.
One recent benefit to the industry is the transition to remote services. Many people get their counseling sessions online through phone or video chat therapy, and this trend is expected to continue. Even after the pandemic ended, millions of people preferred to discuss their matters remotely with their mental health support team. These services are often more convenient for clients and cheaper.
A significant challenge that mental health private practices face is large online therapeutic apps, such as BetterHelp. These services connect clients with therapists online from anywhere in the world. These essentially are “gig” opportunities for therapists and have gained popularity for several years for their affordable cost and convenience. However, the decreasing reputation of these platforms is sending clients back to high-quality mental health private practices.
According to Allied Market Research, the mental health industry is expected to grow at a CAGR of 3.5%. This is moderate growth that ensures the industry will continue to grow and thrive. Mental health services have never been in more demand and this trend is expected to continue for the foreseeable future.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the community residents of [Location] and its surrounding areas. Our mental health care clinic will focus on helping individuals with their mental health concerns. We expect much of our clientele to be young adults or millennials who have the disposable income to invest in quality mental health care.
Customer Segmentation
The company will primarily target the following three customer segments:
- Young adults: The data shows that young adults struggle with their mental health far more than other age demographics. [Company Name] will aim to be a viable and affordable option for young adults struggling with mental health concerns or challenging life obstacles.
- Individuals making the median income or more: Individuals are more likely to seek out mental health care if they have the disposable income to do so. Therefore, we expect many of our clients to earn at least the local median income.
- Primary care patients: Many people seek out help from their primary care doctor before talking to a therapist or specialist. We will market our clinic to local doctor’s offices, so they can refer their patients to us when mental health care is recommended.
V. Competitive Analysis
Direct & Indirect Competitors
The following clinics are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Columbia Mental Health Care
Columbia Mental Health Care has been a popular private practice since 1988. It is a large clinic that employs dozens of mental health professionals, all with different backgrounds and areas of expertise. They offer counseling for individuals, couples, and families and have psychiatrists who can help with medication management. Clients who go to Columbia can get help to cope with a diagnosis, navigating a major life transition, or working through conflict with others.
Cherry Tree Therapy Center
Cherry Tree Therapy Center was established in 2005 to address the mental health concerns of the community. Like Columbia, it is a larger clinic with many therapists to choose from. These therapists come from many backgrounds and offer a variety of treatments and counseling for many disorders and situations. However, Cherry Tree is well-known for its expensive rates, which prevents many residents from seeking their help.
Sunnyvale University Counseling Services
Established in 2008, Sunnyvale University Counseling Services is a community service of affordable therapy offered by Sunnyvale University. It is run by students who are training to become licensed therapists but do not have a license yet. They are supervised by their professors, who are trained, experienced, and licensed therapists. Because licensed professionals do not conduct the services, they are offered at an affordable rate and only to clients who are in the lowest economic brackets of the community. Though these rates are affordable, many potential clients don’t seek help with this practice because they need the help of an experienced mental health professional who has a license to help them.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include the following:
- Empathetic mental health care: [Company Name] will provide the utmost empathy and compassion while providing mental health care to its clients.
- Diverse therapy practices: The clinic will employ several therapists and psychiatrists with different backgrounds to ensure the clinic offers a wide variety of therapy practices and modalities.
- Management: [Founder’s Name] has been extremely successful working as a counselor and will use her previous experience to help clients with their mental health concerns.
VI. Marketing Plan
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
[Company Name] seeks to position itself as a respectable, welcoming mental health private clinic. Clients can expect to receive professional therapy and mental health services from a team of skilled therapists and psychiatrists.
The [Company Name] Brand
The [Company Name] brand will focus on the clinic’s unique value proposition:
- Convenient location
- Qualified and empathetic team of therapists and psychiatrists
- Comfortable, relaxing atmosphere
- Willing to work with most insurance companies
Promotions Strategy
[Company Name] expects its target market to be individuals living within a 5 to 10-mile radius of its location. [Company Name]’s promotion strategy to reach these clients includes:
Website/SEO
[Company Name] will develop a professional website that showcases pictures of the office and the list of mental health services that we provide. It will also invest in SEO so that the company’s website will appear at the top of search engine results.
Social Media
[Founder’s Name] will create the company’s social media accounts and invest in ads on all social media platforms. The company will use targeted marketing to appeal to our target demographics.
Doctor’s Offices
[Founder’s Name] will connect with multiple doctors and primary care offices to ask them to refer our clinic to any patients looking for mental health services. We will ask them to keep a handful of our brochures on hand in hand them out to whoever is in need of mental health services.
Local Publications
[Company Name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, mental health publications, and similar channels will be a major promotion effort.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to provide tips for mental health self-care and educate our clients on the basic psychology/science behind common mental health concerns.
Community Events/Organizations
[Company Name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, homeowner associations, or sporting events.
Pricing Strategy
[Company Name]’s pricing will be moderate, so clients feel they receive great value when obtaining our mental health services.
VII. Operations Plan
Functional Roles
[Company Name] will carry out its day-to-day operations on an appointment basis. Clients can make an appointment through our website or by calling the office. [Company Name] will have a comfortable waiting area, but patients will likely be seen within 5–10 minutes of checking in at the front desk.
In order to execute [Company Name]’s business model, the company needs to perform several functions:
Service Functions
- Individual counseling services
- Cognitive Behavioral Therapy
- Dialectical Behavioral Therapy
- Interpersonal Therapy
- Mental health disorder diagnosis
- Medication prescription and management
Administrative Functions
- Marketing functions
- Bookkeeping functions
- Hiring and training staff
- Sourcing and storing supplies
- Appointment setting
- Customer service/payment processing functions
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led and run by [Founder’s Name]. [Founder’s Name] graduated from [University] with a Master’s in Counseling and has been a licensed counselor for ten years. [Founder’s Name] uses several therapy techniques and modalities to help her clients. Some of these include Cognitive Behavioral Therapy (CBT), Dialectical Behavioral Therapy (DBT), and Interpersonal Therapy. After the clinic is established, she will employ other therapists and psychiatrists who can provide a more diverse list of mental health services.
Though she has never run a mental health private practice herself, her experience as a counselor at other practices has given her the experience to run the operations of the practice and assist her clientele with all their mental health concerns.
Hiring Plan
[Founder’s Name] will serve as [Company Name]’s Owner and Office Manager. In the beginning, she will be the sole therapist for the clinic. Shortly after the practice launches, we will need to hire the following personnel:
- Licensed therapists (2 to start)
- Licensed psychiatrists (1 to start)
- Administrative assistants (1 to start)
IX. Financial Plan
Revenue and Cost Drivers
The key revenues for [Company Name] will come from the fees charged for the provided mental health services. These services will either be charged directly to the client or through their insurance provider.
The key cost drivers for [Company Name] will be the salaries, rent, utilities, supplies and equipment, and marketing expenses.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $180,000 to launch. Specifically, these funds will be used as follows:
- Office interior design: $20,000
- Technology and equipment: $50,000
- Other office and counseling supplies: $10,000
- Working capital: $100,000 for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of Clients | Average |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 150 |
| FY 4 | 200 |
| FY 5 | 225 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
