How to Start Your Own Private Practice in Psychology

<div id="section-1">How to Start Your Own Private Practice in Psychology </div>
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Across Australia, more psychologists are choosing the private practice pathway for the autonomy, flexibility and career growth it offers at their own pace.

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However, starting a successful practice is more than just putting up a sign and distributing flyers around the neighbourhood. It takes planning, patience and investments that many don’t anticipate at the beginning. Once the initial requirements are out of the way, the bigger question usually follows: How do I set up a private psychology practice that’s compliant, financially worthwhile and sustainable for the long term?

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You can be the most skilled psychologist in town, but without strong business and marketing know-how to build and grow your practice, you may as well still be working under a company name.

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This guide will help you understand what’s involved in starting your own psychology practice and give you a clear place to begin.

<div id="section-2">1. Understand the Australian business requirements</div>
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Before you can start seeing clients in your own practice, there are some non-negotiable formalities to take care of:

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Registration

The first step is registration with the Psychology Board of Australia through AHPRA. This gives you the legal right to practise as a psychologist, and without it, you simply can’t open your doors.

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Medicare

If you plan on offering Medicare rebates under the Better Access initiative, you’ll also need a Medicare Provider Number. This allows clients to claim part of their session fee back, which makes your services more accessible.

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Insurance and privacy requirements

Professional indemnity insurance is another must-have. It protects both you and your clients, and it’s a condition of holding registration. Privacy obligations are just as important as psychological practices must comply with the Privacy Act 1988 and health record laws in their state or territory. That usually means putting a clear, legally sound Privacy Policy in place before you start collecting client information.

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Continuing Professional Development (CPD)

Finally, psychology is a profession built on learning. Ongoing Continuing Professional Development and supervision aren’t just nice extras; they’re mandatory and help you keep your practice safe, effective and current.

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<div id="section-3">2. Choose your business structure</div>

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Before you welcome your first client as an independent practice, it’s essential to decide how you’ll structure your business. Most private practitioners choose between being a sole trader, a partnership, or setting up a company. Each option has its pros and cons.

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As a sole trader, you work under your own name or a registered business name using an Australian Business Number (ABN). This option is simple to set up, offers more control, and has fewer reporting requirements. However, you’re personally liable for debts and obligations, which means your personal assets could be at risk if the business runs into trouble.

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A company, on the other hand, operates as a separate legal entity. You’ll need to register with the Australian Securities and Investments Commission (ASIC) and get an Australian Company Number (ACN). Companies can limit personal liability and may offer tax advantages, but they come with higher costs and stricter compliance responsibilities.

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Whichever path you take, you’ll need an ABN and, if using a trading name, registration with the Australian Business Register. It’s worth taking the time to think about how each structure fits with your circumstances, from the level of risk you’re comfortable with to the tax setup that makes sense and the direction you’d like your practice to grow.

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<div id="section-4">3. Create a business plan</div>
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Every successful private practice starts with a clear plan. It doesn’t need to be lengthy, but it should give you structure and guide your choices as you move forward. Start by outlining your mission and long-term goals. What kind of practice do you want to build, and how do you want it to grow over time?

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It also helps to define your niche so clients and referrers can easily understand what you offer. Do you work best with children, support couples, or focus on trauma? Defining your area of focus will also help guide your marketing plan.

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Spend some time researching the demand in your area and identify any gaps you could fill. Think about who might refer you; it could be GPs, schools, or other health professionals. This research can help shape how you position your services.

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And most importantly, plan your financials. Track your start-up expenses, ongoing costs, and expected income so you can easily check the sustainability of your practice. We’ll go into more detail on this next.

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Finally, think about how you will promote your services in a way that follows AHPRA’s advertising guidelines. Keep your website, directories and GP referral materials factual, simple and easy to access.

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<div id="section-5">4. Set up your finances</div>
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Getting the money side sorted early takes a lot of stress off your shoulders later. A good place to start is with a business bank account. Keeping your practice income and personal spending separate makes things clearer when it comes to tax time and gives you a better sense of how your practice is tracking.

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If your practice earns over $75,000 a year, you’ll need to register for GST and lodge Business Activity Statements. Bookkeeping can feel like a full-time job on its own, so consider using accounting and financial management software like Xero, or hiring an accountant who specialises in small health practices.

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You’ll also need to decide how you’ll bill clients. Some psychologists choose private billing, while others bulk bill through Medicare, and many opt for a mix of both. Each option has its advantages, so it’s worth considering what works best for your practice and the community you want to serve.

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<div id="section-6">5. Find a location</div>
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The space you work from matters, not only for you but also for how your clients feel when they come in for an appointment. Some psychologists open their own private offices, others rent rooms in shared settings, and many now work partly or fully online through telehealth. For those starting out, shared coworking spaces are often a practical option. They help reduce costs, usually include reception and waiting areas, and bring you closer to other health professionals, which can lead to referrals and collaboration.

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It’s also worth considering the practical details. Look at how accessible the location is, whether parking is available, and if the space meets disability access requirements. Checking zoning rules in your area is also worthwhile to ensure you can operate without issues.

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Most importantly, your practice should offer a safe, professional and welcoming environment where clients feel comfortable attending their sessions.

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<div id="section-7">6. Invest in practice management systems</div>
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One of the biggest surprises for new practice owners is how much time admin takes. Between managing calendars, invoices, Medicare claims and GP letters, it can feel like you’re spending more time on paperwork than with clients. Which is why having the right systems in place from the beginning can make everything much easier. Here are a few practice management tools that are popular in Australia:

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Zanda

Zanda works well for solo psychologists and those just starting out, as it handles everything from bookings and invoices to Medicare claims, reminders and telehealth. It’s usually our go-to suggestion for new private practices. Plans start from around $29 AUD per month for a single user, with more advanced features available on higher tiers. SMS reminders do cost extra, but many practitioners find it’s worth it to reduce no-shows.

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Halaxy

For those on a tighter budget, Halaxy stands out because the core system is free. You only pay for extras like SMS credits or secure messaging, which makes it a great choice if you’re watching expenses in the early days. The trade-off is that some features may need add-ons, but it’s flexible once you get the hang of it.

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Cliniko

Cliniko is known for being straightforward and user-friendly, which makes it popular among psychologists who want a clean and simple setup. Pricing starts at around $45 AUD per month for one practitioner and increases as you add more users. SMS reminders are an additional cost, while email reminders are included.

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<div id="section-8">7. Build referral networks</div>
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Referrals are one of the most effective ways to grow a mental health practice. GPs are often the first point of contact for people seeking mental health support, especially through Medicare’s Better Access initiative, where clients can claim rebates for up to 10 sessions a year. Building strong connections with local GPs makes it more likely they’ll think of you when writing treatment plans.

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It also helps to connect with psychiatrists, allied health providers, schools and NGOs. These relationships can bring new clients and support a smoother experience for the people you’re working with.

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Professional associations, such as APS, AAPI, and ACPA, offer networking opportunities, professional development, and a way to stay visible in the field. Online directories like Psychology Today are also an effective way for referrers and clients to find you.

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<div id="section-9">8. Plan for daily operations</div>
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While practice management systems take care of the big tasks like bookings, invoicing and Medicare claims, there are still plenty of smaller day-to-day jobs that can eat into your time. Balancing sessions with emails, phone calls, cancellations, and follow-ups often means less time with clients.

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Clear policies are a simple way to keep things under control. Setting expectations around no-shows, late cancellations, and payments protects your schedule and avoids confusion, and talking about these things upfront makes the process easier for everyone.

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When admin starts to pile up, it may be worth bringing in a Virtual Assistant or part-time admin. They can handle invoicing, scheduling, and client enquiries, taking pressure off your shoulders so you can focus on client sessions.

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It's also important to remember your own work-life balance. Managing caseloads carefully, setting boundaries around hours and making time for breaks will help your practice stay sustainable and reduce the risk of burnout.

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<div id="section-10">9. Think about future growth</div>
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As your practice becomes more established, there may come a time when you feel ready to grow. Signs might include a full caseload with a waiting list, spending too much time on admin, or feeling limited by working on your own.

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Growth can take different forms depending on what suits you. Some psychologists start by hiring admin staff to take on calls, scheduling and billing. Others bring in associate psychologists on a contract basis, or even look at forming a group practice to share the workload. Shared coworking spaces can be especially helpful here, as they allow you to expand without committing to long leases or major fit-outs.

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Scaling up also comes with financial and legal considerations, from employment agreements to insurance coverage. Seeking advice from an accountant or business advisor can make the process clearer and help you grow in a way that feels sustainable.

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<div id="section-11">Challenges to prepare for when starting out</div>
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One of the biggest shifts for psychologists moving from the public sector into private practice is realising that clients don’t just walk through the door. Running a practice means thinking like a business owner, and that includes investing in client acquisition. Understanding concepts like lifetime value (LTV) and customer acquisition cost (CAC) can help you see the balance between what you put in and what you gain. Most psychologists find new clients through a mix of marketing, such as Google Ads, SEO or flyers, and through their own efforts in building GP referrals and community networks.

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Beyond marketing, there are other challenges that anyone with their own business face. The early months often bring inconsistent income, Medicare audits can be stressful, and cancellations or no-shows can disrupt cash flow. And, unlike salaried work, you don’t get paid for sick leave or holidays, so planning ahead carries a lot more weight.

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Private practice can also feel isolating if you’ve come from a busy hospital or group setting. Shared coworking spaces are one way to maintain connection, especially when they bring together other mental health professionals. Having mentors and peers to lean on makes the journey less lonely and provides guidance when you need it most.

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<div id="section-12">Build your own practice at the rhythm that suits you</div>
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Starting a private psychology practice requires planning, persistence, and a willingness to learn beyond the clinical work. It can be a rewarding pathway that offers independence and growth, but it also requires balance and ongoing attention to both business and client needs.

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Before taking the leap, it’s worth seeking guidance from mentors, accountants and professional bodies who can share insights and practical advice. Their support can save you time, money and unnecessary stress as you establish your practice.

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When you’re starting out, the last thing you need is the stress of a long lease hanging over you. A space like Kiah Place gives you the freedom to grow on your own terms, with support and community around you whenever you need it.