Dr. Jeremy Sharp (00:00.568)
Hello everyone and welcome to the Testing Psychologist podcast. I’m your host, Dr. Jeremy Sharp, licensed psychologist, group practice owner and private practice coach.
Many of y’all know that I have been using TherapyNotes as our practice EHR for over 10 years now. I’ve looked at others and I just keep coming back to TherapyNotes because they do it all. If you’re interested in an EHR for your practice, you can get two free months of TherapyNotes by going to thetestingpsychologist.com slash therapy notes and enter the code testing. This episode is brought to you by PAR.
The new PAR training platform is now available and is the new home for PAR talks, webinars, as well as on-demand learning and product training. Or learn more at parinc.com backslash resources backslash par dash training. Hey everybody. Welcome back to the Testing Psychologist podcast. I’m here with you in summertime.
It is June, folks. It is June. And that means that we’re starting to ramp up for the next cohort of the testing psychologist mastermind groups. So the next cohorts will start in early August. There’s going to be a level four beginner folks just launching their practice. Intermediate folks, which I call the get your life back group. This is overwhelmed solo practitioners looking for better systems and structure.
and an advanced group as well. So this is aimed at group practice owners with, you know, five, six, seven, eight, 10, 12 clinicians who are looking to talk about scaling, people management, and so forth. So if you’d like to get some support and guidance as you grow your practice, you can go to thetestingpsychologist.com slash consulting and schedule a pre-group call to see if it’s a good fit. But as for the episode today, we are talking about finances.
Dr. Jeremy Sharp (01:57.772)
I get this question a lot in my consulting. How much does it cost to launch a testing practice? And I haven’t talked about this on the podcast yet, which is a little surprising, but I got motivated because I was doing a talk for our APA interns about a month ago. And this question came up again and we walked through it on a whiteboard and decided to turn it into an episode because it’s important and good to have the information out there.
for those of you who are thinking about launching. So today we’re going to talk about the costs involved and I’ll run through kind of line by line. You know, I like to keep it pretty straightforward and concrete. So we’ll go line by line, talk about some of the common expenses. We’ll talk about some of the hidden expenses, ones that you can easily overlook, but I certainly overlooked when I was starting my practice. And then we’ll talk about how to fund these startup costs and try to answer that question.
which is always the second question after how much does it cost? How do I actually pay for this? How much should I have saved? And how do I manage my finances? So we’ll talk through all of those things and hopefully you will walk away with a really clear idea of the costs involved in starting a practice as well as ways to fund it and how to budget for that major event. So let’s get to it.
Dr. Jeremy Sharp (03:35.822)
All right, everybody, we are back and we are talking through the finances of launching a testing practice. As I said, this question comes up a lot and we talked on the podcast before about how psychologists and mental health folks are not the greatest, I don’t think. Speaking from personal experience and professional experience, we’re just not the greatest at deliberately making a budget or walking through finances or getting a really good idea of what things will cost. We tend to wing it.
And, you know, some of that’s our fault. A lot of it is not. We’re certainly not trained to be business people. And there’s no reason to think that you should be good at budgeting or projecting costs or anything like that. But sometimes some of us have like other layers in terms of attitudes toward personal finance or money mindset, things like that that might make it easy to be, let’s say, overly optimistic or
On the flip side, overly pessimistic, and both of those can be detrimental when you are trying to launch your practice and getting a realistic idea of the costs associated. So let’s dive right in and get real concrete with this. And like I said in the intro, hopefully you’ll walk away with a really good idea of how much you need to save and how to fund that savings if you don’t have it on hand. So when I think of starting a practice, there are
kind of three areas that you need to consider and plan for from a budgeting standpoint. The first is, I will call it like planning and legal setup. Second is clinical readiness. So this will be like test kits, things like that. And then the third one is marketing and administrative. And we’ll tackle each of these areas and go through some of the common expenses involved there. So let’s start with the legal and administrative.
This is a relatively short category, arguably the most important because if you don’t set up your business correctly and get your paperwork intact and things like that, then you’re going to be in trouble. So first thing on this list is just like very basic forming your business. So this could be an LLC, PLLC, the S-Corp cost. It could be, you know, any of those things. That’s what I’m talking about when I say launching your business or forming your business.
Dr. Jeremy Sharp (05:57.838)
So this is pretty easy in most states and it’s relatively inexpensive in most states. Now, the term relative is doing a lot of work here. So when I say relatively inexpensive, I mean the cheapest states to form a business are gonna run around $50 and the most expensive states, looking at you Massachusetts, are gonna be up around $500. So there’s quite a range here and this is easily found by doing a Google search.
where you can find a list of costs to form a business by state and to see how much that’s going to cost, relatively inexpensive compared to some of the other expenses we’re going to talk about. The other aspect that I would put under legal and administrative is malpractice insurance. So you may already have this. So this may not fall under a true startup cost for launching a practice, but it’s important to budget it in. So malpractice insurance is
typically going to run somewhere between $500 and $1,500 per year. So again, the initial component is not going to be super high. You may have to make that first payment and they will do payment plans at least through the trust. So make that first payment of two, three, maybe $400 just to get started. And then it might top out between $500 and $1,500 for the year. The last thing in this category is going to be legal consultation for
paperwork, know, informed consent, office policies, things like that. If you’re going to be hiring folks quickly, then you’ll need to get legal consultation for contracts as well, employment documents. But this is one of those places people ask, do I really need an attorney to draft my paperwork? And when I first started consulting several years ago, I would say probably yes. These days, I have wavered on that a bit because
Simply because there are so many consultants out there who are selling attorney approved paperwork or paperwork that’s already been reviewed by an attorney. I don’t know that you have to go to an attorney and have that person develop your paperwork for you. It’s going to be expensive. Attorneys, you know, typically run between 200 and 400 or more per hour. So you definitely don’t want an attorney to draft your paperwork from the very beginning. If you’re going to do anything, I would suggest you
Dr. Jeremy Sharp (08:21.998)
purchase a paperwork packet or even devise your own. You could likely use AI at this point to do it for you. And then take it to an attorney to review instead of generate from scratch. And that’s going to save you a lot of money in the process. But all that to say, this would likely run you somewhere between 200 and $1,000, maybe more depending on how much work you want the attorney to do and how expensive that attorney is.
That’s legal and administrative. Again, just running through the numbers, this could range anywhere from 800 up to about $3,000 just to get started. Let’s move to the office and tech setup or the clinical readiness part. As far as office and tech, I’m guessing you’re going to need a physical office.
A lot of us are doing some hybrid work at least, and I know there are some practices out there who are doing totally remote work. So you may just be working from your home office. That’s fine. That’s great. It will be cheaper for you, but I’m going to talk about what it will cost to lease a physical office. So I would say now again, there are always going to be outliers, those of you that are in super expensive areas or super cheap areas. But generally speaking, for an office lease, you’re going to need
a full-time office lease, that is. So for a full-time office lease, you’re gonna need to budget somewhere between 400 and 2,000 for a full-time office lease, give or take. Now, one of those possibly hidden costs that we don’t think of is typically you’re gonna have to do a security deposit or first and last month’s rent. So whatever your monthly rent is, triple that. So if you are gonna be paying $500 a month for the monthly rent,
Bump that up to $1,500 to account for the first and last month’s rent or security deposit.
Dr. Jeremy Sharp (10:25.152)
As far as office setup, you will likely need furniture. again, this can vary wildly, but I typically budget $1,000 to furnish an office, right? So I’ve furnished many offices over the years in my group practice here in Colorado. And I found that you can pretty easily furnish an office for $1,000 going, you know, it’s not like bargain basement, but it’s also not luxury by any means.
That can vary wildly. Many of these things can. But I think you could budget easily $1,000 for office setup. You could also go up to $2,000 pretty quickly, especially if you are dealing with things like soundproofing. And if you want to get like a really nice, like an ergonomic desk chair or something like that, you can even push up. I mean, you can push as high as you want to go, but a really nice chair on its own could run you $1,000 pretty easily.
So we’ll talk about ways to save some money in each of these areas as we go along. But this is just again, a general estimate of what you might cost or what it might cost. So furnishing office, let’s say a thousand to $2,000. If you don’t already have a computer, you’re likely gonna need one of those. So I’m a big fan of MacBooks. I have used MacBooks for probably 20 plus years now.
And I’m on like my third MacBook Air, I think. Not because they fail or break, but just because I like to get new stuff every two to three years. So a MacBook Air is going to cost you about a thousand dollars, maybe a little bit less. And you can get other computers that are just fine for doing the work that we do for anywhere between 500 and $800.
I recently was able to go on eBay and buy a used ThinkPad, Lenovo ThinkPad for one of our admin staff. And that was about $500 to get a really nice Windows-based computer that’s a couple years old. So don’t be afraid to go on eBay and look for certified refurbished computers as well. Either way, you’re gonna need a computer, likely gonna need a printer slash scanner.
Dr. Jeremy Sharp (12:52.958)
and maybe some backup, a tech backup or cloud backup. So that all can run you easily between $1,000 and $2,000. Now, I’m not going to go deep into the software stack or the tech stack. We’re just going to leave it at an EHR for now. You will need an EHR that’s going to run somewhere between $50 and $100 a month. So all in, again, huge range here, but
We’re going to, it’s going to range somewhere between 2000 and 6,500 or 7,000 depending how intensely you go on this office setup and how much you want luxury furniture versus kind of basic furniture and what kind of computer you get and things like that. And of course how expensive your rent is. So let’s talk about assessment materials. This is a big one. People wrestle with this a lot. How much did I spend on assessment?
materials. Well, I do think at this point in time where you still have to buy at least one or two paper kits, especially if you’re doing autism testing, people feel differently about the ADOS. Of course, there are different opinions about whether we should use it or not. But if you buy the ADOS, I mean, that right there is going to be a couple thousand dollars. So
Other paper kits are going to be between, you know, 1200 and 1800, depending on which ones you get. I’m talking about like the Wisk, the Waste, the Wyat, the KTEA, things like that. So if you buy a couple paper kits, you can, or physical kits, you can easily be in that four to $6,000 range. I’ve told the story many times on the podcast where I launched my practice and
Back then it was really only paper kits and I went to my wife one day, I remember this, standing in the kitchen of our first starter house that we were renting. And this was before we had kids or anything. I had this conversation with her and said, you know, I think I’m going to need about $12,000 from our bank account. What do you think about that? And she just, her jaw kind of hit the floor, but it worked out.
Dr. Jeremy Sharp (15:14.966)
Luckily. So if you’re buying all paper kits, that cost can escalate pretty quickly. Luckily though, we have things like Q-interactive and other online platforms. just did that episode a few weeks ago on the digital record form from PAR. So there are some online platforms that are helping here. But
If you go the Q-interactive route, you’re still going to pay an annual licensing fee of about $300, $350, and then you will pay by the test or by the subtest. So it’s not as expensive right from the beginning in terms of buying physical kits, but it will add up, especially if you have to buy a couple of iPads. So to get started just with Q-interactive plus a couple of iPads, you could easily be in for about $900.
But then you just pay by the test and it is still cheaper than using physical kits or buying physical kits for everything. Either way, as you can tell, there’s a lot of variability here in terms of how much you can spend just for test kits. But I would easily budget five to six thousand for testing materials to get started. And that should get you a couple of physical kits and some Q-interactive access and a couple of iPads if you want to go that route.
If you’re going to be storing your test kits, you will likely need a locked cabinet of some sort or some kind of locking system, unless you get a roller bag and you’re going to roll it around everywhere. And those can be a small expense, you know, it might cost you a hundred or $200.
All right, so let’s move to the marketing side. So marketing, like the other areas, is gonna be a place where you can spend a little bit of money or a lot of money. One of the biggest expenses here is gonna be website design and hosting. So let’s tackle the obvious question right off the bat. Do you even need a website? I would say unequivocally yes, you need some kind of website.
Dr. Jeremy Sharp (17:19.49)
some kind of website. doesn’t have to be fancy, but you need something so when people search for you, they can find you and read a little bit about you and possibly book an
So website design and hosting is going to just vary wildly in terms of how much you can spend. You can go as little as, you you could start with, I think it’s like $150 for the year with something like Squarespace if you feel comfortable building your own website using their tools. And then you can go all the way up. You can easily, easily spend three to 5,000 on a website and the price just goes up from there depending on.
what you want to, who you contract with and how much that person charges. But I don’t think we personally as mental health folks have any need for a fancy, fancy website. You can get a really nice, well-designed site for, let’s say, 3,000 give or take from reputable folks.
You’re going to likely have some monthly cost for hosting as well. That’s going to be somewhere around, I don’t know, five to $15 a month, just depending on what kind of hosting you get. You can also pay for maintenance that will increase that cost a little bit for someone to maintain your website. But generally speaking, let’s call it a couple hundred dollars all the way up to $5,000 for a website, depending on how much you want to do yourself versus have someone else do it.
Branding is another area that you want to think about. So same question with websites applies here to branding as well. Do I need branding? Do I need a logo? I would say with the tools available to us now, yes, you absolutely need to put a little bit of time into devising a logo and having some kind of branding. Again, this does not have to be fancy. You know, I have paid, gosh, the very first branding,
Dr. Jeremy Sharp (19:25.998)
job that I paid for was $500 back when I started my practice and got, you know, a very nice logo and font and some customized branding. And within the last year, I went to the other end of the extreme and paid $20,000 for updated branding for our practice. The difference between those was massive, right? But it’s just different stages, different stages of practice. So these days when you are just starting out,
You can go to, you know, there are plenty of sites that’ll do this for you. Logo.com is super cheap, $10 a month, and you could get something decent. There are other sites that will do the same thing. You could just do a Google search for, you know, logo generator or AI logo generator, and they’re fine, right? So in my opinion, my uninformed opinion, just based on personal experience, there are kind of two tiers of branding. One is the lower, probably,
90 percent. So the lower 90 percent, I don’t think there’s a lot to distinguish one business from another. And you can live in this lower 90 percent and be totally fine. So this is like logo dot com or kind of low level designers, you know, options like that where you will get a logo and a font and some colors.
And that’s great. That’s all you need. I don’t think we need something incredibly complex or intricate or unique in our industry. We just need something to increase legitimacy and build some kind of brand recognition. And you can do that pretty cheaply. So I will call that kind of the lower 90 percent. And then you could also jump up to what I would call like the upper 10 percent.
which are those branding portfolios that really stand out. Like you look at these websites and you’re like, this is different. This is a different level. My hope is that that’s what we jump to with this most recent and more expensive branding engagement. But my point being, you don’t have to spend a lot of money on branding. It’s more about the act and the just
Dr. Jeremy Sharp (21:46.936)
having a logo and some kind of brand that’s not just your name or just a Times New Roman font on your website. You just need something and that’s really easy to do really cheaply. So again, all that to say, you could do a logo and branding for pretty cheap. mean, as easy as like 10 or $20 a month for a couple months to do your own all the way up to…
I mean, I reasonable expenses can be two grand, three grand, five grand. I really went over the top with this branding person because I wanted to sort of treat our practice after our transition last summer. So what else do you need in the marketing realm? So online presence is huge. Now this is a big umbrella and it covers a lot of stuff, but for the purposes of this discussion, I’m going to say
We’re talking about like SEO setup, search engine optimization, and maybe some Google ads. So to get set up and do some SEO work, let’s just ballpark a thousand to $2,000. To get set up with Google ads, it’s going to be probably a $500 setup fee and then three to $500 a month ongoing if you want to run ongoing Google ads. Other online presence is pretty cheap, but I think it’s worth investing in.
search engine optimization, especially in the beginning, to get your website ranking as highly as possible when people search for you. I have that question a lot. Practices that are launching will ask this, like, I built my website, but it’s not showing up in Google. And that is where search engine optimization comes into play. I think it is worth investing in in the beginning to make sure that people can find you if they do search for your name or your practice name.
The last thing that I’m going to cover in this realm is professional photos. So again, kind of same as everything else. You can do it yourself with photos if you want to.
Dr. Jeremy Sharp (23:54.574)
They’re just gonna, I mean, unless you’re a photographer or you’re a partner or you have a friend who’s a photographer, you know, they’re probably gonna be like pretty good, but not great. So if you wanna pay for professional photos, we’re gonna call that 250 to 750 just to get some headshots and professional photos done. So, okay, let’s do some tallying. With all of that, we had, what was it? Maybe 200 to 500 for a website, a couple hundred for branding. So,
You know, in this realm, you could maybe get away with a thousand or fifteen hundred on the low end. then, you know, depending how much you want to spend on a website and branding in particular or photos, then that could escalate all the way up to, gosh, easily eight to ten thousand if you want to go pretty.
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Dr. Jeremy Sharp (26:10.22)
Many of which offer APA and NASP approved CEs and also houses on-demand learning tools and PAR product training resources. Best of all, it is free. Totally free. To learn more, visit parinc.com backslash resources backslash par dash training. All right, let’s get back to the podcast.
So before we transition to like some of the hidden costs, I have a couple random costs that you might need to think about. One is just licensure fees for your state. You may have already paid this if you were working for another entity, so it could be a non-issue, but this can range from $100 to $500. And then CEs also can vary pretty significantly. I think you could go with some of the commoditized CE sites and do a subscription of, I don’t know,
$50 a year, $100 a year for unlimited CEs. You should be good there.
So let’s transition and talk a little bit about hidden or maybe overlooked costs. One is supervision or consultation fees. So if you’re a newer psychologist or you’re trying to work with a new population, you’re gonna need to pay for supervision or consultation. I would ballpark at least $150 an hour for that, all the way up to, well, depending where you are, $300, $400 an hour for clinical consultation.
Business consultation will also range from, gosh, could be 200 an hour all the way up to, back when I was making some changes in my practice, this is almost 10 years ago now, I was paying close to $800 an hour. So consulting can vary wildly as well. That’s a theme in this episode, as you can tell.
Dr. Jeremy Sharp (28:05.262)
Another hidden fee that you might not think of is credit card processing fees or payment processing fees. So that’s going to be about 2.9%. We can call it 3 % of any charges you receive via credit card, any payments you receive via credit card, plus 30 cents per transaction. let’s just, you know, if you’re billing $10,000 a month, then that’s going to be $300 in credit card fees.
plus 30 cents per transaction. Another hidden fee, you may want to hire some admin support that can range from 20 to $40 an hour. If you’re just launching, you can easily do five hours a week, I think, for admin support. So that’s gonna range from about 100 to $200 per week or, you know, four to $800 per month.
secure email or fax system that can be, let’s just call it 15 to $30 a month to go in on those. Building workflows and templates and things like that. You can pay folks to do that for you. Again, that could be anywhere from probably $50 to $200 an hour, or you can just take the time and do it yourself and then you’re kind paying in time versus money. Down the road, you’ll have to think about test kit renewals and replacement forms.
So kind of cost of goods sold is what real businesses call this number, but it’s essentially like how much does it actually cost you to administer an assessment? For us, we ballparked at around $150 per evaluation. That includes all the forms, questionnaires, test kit materials, digital scoring, things like that. So you can do that number for yourself, but a good ballpark might be about $150.
Let’s see, insurance paneling support. This could be, you know, I’ve heard $100 per panel, somewhere in that range. So depending if you want to pay someone to panel for you, you can anticipate paying, yeah, about $100 per panel, give or take. And I think that’s about it, as far as hidden costs and things to think about. Now we could keep turning over rocks and finding over.
Dr. Jeremy Sharp (30:23.458)
you know, finding tons of little fees here and there. But I think, you know, we’ve covered 95, 98 % of the costs associated with starting a practice. So what are we looking at then when we boil all this down? There are kind of three scenarios as far as I’m concerned, sort of three budget scenarios. You can do sort of like your lean self-starter bootstrapped scenario, which
is gonna come in around, let’s call it like eight to 10,000 all in to launch a practice and get things going. You can go with like a moderate kind of hybrid approach. So, you know, this is where you’re spending a little bit more on office furniture, maybe a broader set of test kits, a little bit more on a website and branding. Maybe you pay for an attorney, that kind of thing. You do some marketing.
This is gonna fall maybe more in the range of, let’s call it like 12 to 15,000. Again, depending how much you wanna spend. I would say this is probably the most common scenario. So if you walk away with nothing else and you hear nothing else during this episode, then you can just have that number stick in your head. You will need, let’s just call it $12,000 to launch your practice. And then on the upper end, we’ll call this like,
premium launch where you’re getting, you know, maybe you’re in an expensive area, you get a really nice office, you furnish it really well, you do a full like test battery, you know, where you’re spending eight, 10,000 on your kits. You, and I know there are plenty of you out there who are like, oh my gosh, I spent way more than eight to 10,000, but we’re just going to call it eight to 10,000.
website, you you pay a lot for the website, you have someone do it for you, you hire some help right off the bat, you do some Google ads, you are, you know, putting in a buffer for like some income delay. You can easily, again, get up into the 20, maybe even $25,000 range if you want to do like a kind of a premium option.
Dr. Jeremy Sharp (32:38.19)
So with all that said, mean, you can clearly tell there’s a lot of fluctuation and variability in how much you might spend. you have the good news here is that you have choice, right? So you can do, you can go as lean as you want. There are lots of DIY options if you’re willing to trade time for money and do things yourself. And if you have the money to spend, then you can also spend the money and save that time. So.
How do you actually minimize some of the costs here? Let’s talk about cost saving strategies a little bit, if you want to go that route. So one, you can buy used test kits. There are tons of advertisements for used test kits on the Testing Psychologist Facebook group and other listservs. You can buy in bulk with your scoring subscriptions. So a lot of the questionnaires in particular will give you a discount for buying in bulk.
You can start with just a few core measures. So that question comes up a lot. I’m not going to dive into it here on this episode, but the question of basically, you know, what measures do I need to get started? A lot of people, think, buy too many. I think we over test in general. So I would really be deliberate about this and not over buy in the beginning. Now you can also try to work out arrangements like if you have a local university or training clinic and they would allow you to borrow materials.
if you have a colleague and you want to share some materials. So those are some great options to save on the test kits. As far as branding and marketing, like I said, Squarespace and other similar tools are pretty easy to do yourself and have them look decent. You can do DIY kind of graphic design and branding and that kind of thing with something like Canva. You know, these are very small like monthly subscriptions.
where you’re not gonna be putting out thousands of dollars to someone to do it for you. But just know, typically, unless you have an eye for that kind of thing or are just really good at copying what you may see somewhere else on the internet, the quality is probably gonna suffer. this is one of those places where, again, unless you have an eye for design or you know someone who does, or again, you can copy really well.
Dr. Jeremy Sharp (34:58.164)
using these tools, I would probably consider paying someone at least a little bit of money to do your website and branding. But you can DIY all of that and save quite a bit of money.
All right. Other ways to save money, like I said, don’t pay an attorney to do all of your paperwork for you. Just purchase a packet from someone and have an attorney review it or even just have Chad GPT review it and give you some suggestions.
Okay, so we are moving right along here and hopefully you have a decent idea of what it might cost and how to save a little bit of money. Let’s talk about the financial part, like how to actually make this happen. So one component we did not really talk about here is the, like the personal income component. We’re just talking about like how to launch a testing practice and how much that will cost. Now on top of that, depending on your,
personal financial situation, you may need to add three to six months of personal living expenses if you plan to just leap into private practice without any other income or partner income or something like that. when you’re thinking about like how much money do I need, how much do I need to save, you can take the amount that it will take to launch your practice, which we again, will ballpark 12,000 for kind of a middle of the road option, and then add three to six months of personal
expenses on top of that if you’re trying to figure out how much do I save before I can take the leap into private practice. Okay. Let’s see. would also, I mean, that kind of accounts for the revenue ramp up. So I tell people to ballpark six to nine months before their practice is in like a viable place where it can can sustain you and is hitting probably 80, know, 75, 80 % of your income target. So
Dr. Jeremy Sharp (36:52.812)
with that three to six months of personal living expenses plus maybe a little three month ramp up for revenue, then that gets you in that six to nine month range where essentially you need to be prepared for, I would say, if you’re being super conservative, nine months of business and personal expenses in order to launch a practice. That should be pretty safe. Okay. So how do we do that? How do you actually fund this stuff?
So one, you can save money, right? So if you’re in another job, you can set a savings target and just save up over time until you are ready to leap. So again, saving for that nine months of personal and business expenses, you can just save it up. Now, what if you can’t save it up or you don’t want to save it up? You want to find other funding sources. There are lots of options. One.
you could do like a 0 % credit card. Okay, so there are a lot of credit cards out there that will give you a 0 % interest rate for the first 12 to 18 months while you launch your practice. These I think are great for a lot of the expenses. You likely can’t put your office deposit and lease and rent on a credit card, but most of the other expenses that we talked about, you can put on a credit card. So,
This is great for people who just have short-term needs. You can pay it off within 12 to 18 months, and you need the money relatively quickly to make large purchases for test kits and things like that and furniture and so forth. this is route that I went. I got a 0 % credit card and then just set up a payment plan to where I knew I would pay it off within, I think it was 12 months back then.
And that worked out well. So 0 % credit card is definitely an option. Typically, you can get approved pretty quickly. The approval, you know, the balance might be a little bit low because you are a new business, but this is likely a viable option for a lot of folks. Now, the one thing you want to look out for here is a high interest rate after the initial
Dr. Jeremy Sharp (39:15.374)
0 % interest rate. So most of the time if you go past 12 or 18 months, it’s going to kind of default back to that high typical interest rate and then you’re going to pay a lot more on those expenses if you haven’t paid them off. So another option, small business loan or line of credit. I think these are great for sort of larger needs. like
you know, small business association, micro loans, for example, you can get up to 50,000 bank or credit union loans are out there. You do have to have good credit and like some documentation of business. So this can be a little tricky. It’s like a chicken or the egg question, but this is good. You know, these are good options if you larger amounts like, you know, 10, 15, 20, 30, know, $40,000. This is where we kind of get into small business loans or
lines of credit. I really like the line of credit option for just to have a revolving line of credit for your business if you need it as sort of a backup or emergency funding source. But lines of credit also work well for short term funding as well. So these are good because the interest rates are typically lower than a credit card. So not a zero percent credit card but you know typically lower than a regular
credit card interest rate. You can pay them back over longer terms. So repayment period might be, you know, 18, 24, 60 months. So, you know, these can work well for kind of larger amounts of funding that you want to pay over a longer period of time. And you can look at Small Business Association. You could look at your bank or credit union. You could look at an online lender like Fundbox or Bluevine. We have our line of credit right now for our practice through Bluevine.
which is gonna probably give you faster approval, but maybe higher interest rate. So these are all options as well. It’ll also help you build business credit, which is great. These can be difficult because you often have to document some kind of business income. And if you’re just starting out, then you may not have that. Now, some of them have loopholes, I guess, or provisions for businesses that have just started out. So you can do some research and figure out if that works for you.
Dr. Jeremy Sharp (41:39.768)
All right, third option, you can look at grants. So there are plenty of grants out there for mental health providers or, you know, like minority owned businesses or women owned businesses. Some examples that I found were the AMBER grant for women entrepreneurs, the NESC growth grant for micro businesses, state level small business grants where you can, you know, check with your secretary of state or economic development office and then like private foundation grants. So
Obviously the pro here is that it’s free money. You don’t have to repay it, which is awesome. It can also add some legitimacy to your practice. Cons are that, you know, they’re competitive. The application is typically pretty time consuming and it might, like, it may be like months from start to finish between applying and actually having the money dispersed. So this to me is one of those things like you would maybe look at
when you launch your practice, but not count on it for six to 12 months down the road. And in the meantime, you would need another funding source. So other options you could do like a personal loan or, you know, home equity line of credit. So this is good for kind of low interest, long-term borrowing. If you already have good credit or home equity, interest rates are pretty low. They can be flat. can use it flexibly, which is nice. Like draw on it when you need it and
only take as much as you need and then pay it back and so forth. The difficulty here is that you are bringing your personal assets into the business, which can be, I mean, there’s risk there for sure. It can also, again, the application process can be a little bit lengthier, certainly than a credit card and just might take a while and you have to provide more documentation. So I think you would only consider doing this if you’re pretty confident in your practice’s viability.
really risk averse in terms of bringing personal assets into the business finances if you can avoid it. Then you have, I I’ve never really heard of anyone doing this, but it is an option. You could do something like peer-to-peer lending or like a crowdfunding kind of thing where you go online. I mean, there are plenty of options like Lending Club or Kiva are options for peer-to-peer lending. So these are, mean,
Dr. Jeremy Sharp (44:01.752)
You know, they are viable options. I’ve just never heard of anybody doing it. So there’s no bank bureaucracy involved, which is nice. It’s all human to human. The cons though are you have to like sell your story to someone else. And like to me, that’s hard. I’m not like great at that. So, but if that’s, if that’s you, then this could be a great option for you. And then lastly, of course there is just bootstrapping. So we talked about saving over time. We talked about
You know, trying to get, you know, going slow, like building up slow. you know, I like the bootstrapping approach. I’ve actually done that, I think, in all of my businesses. And so this is where, you know, you start really slow. You get only the kits you absolutely need. You keep your part-time job while you’re building your practice. And you allocate funds to the private practice as they’re available. And you just know that you’re going to do like a really slow ramp. You know, maybe it’s going to take a year.
to fully build up the practice before you quit your job. And that is totally fine. I kind of love that approach actually, if you’re not really pushed into leaping into private practice, and there’s not a ton of urgency, this to me is sort of the best like hybrid option. You keep your job for 10, 20, even 30 hours a week, you build up your practice on the side, you ramp down your job as your practice gets busier.
and it provides you a safety net of funding and income while giving you just a longer runway for your practice. So if you can do that, that’s great. So all that said, just some wrap up kind of strategy, recap, mindset tips, things like that. So if you take nothing away, like I said, let’s ballpark about 12 grand plus about six months of expenses.
personal expenses to launch your practice. I think before you get into any funding, you want to think about a repayment plan. So it’s really exciting to be approved for a credit card or a loan and it feels like, my gosh, you know, I’ve been given this money. But you do have to repay the vast majority of options. So just think about that ahead of time, how you’re going to do that. You know, I’m a big fan of really making things concrete. So if you end up borrowing, let’s just say,
Dr. Jeremy Sharp (46:29.485)
$15,000. Well, let’s call it 12, just to keep it even and map it to a year. So, you know, $12,000, you’re to pay that back in a thousand dollars a month. How many clients are you going to have to see to make that payment each month? And just do that math and, and map it out. Certainly you want to avoid any kind of predatory lending situation. You know, you can tell these from a mile away. I seem to get like,
50 texts a week from people trying to give me funding for my business. It sounds attractive, probably just predatory. So don’t get wrapped up in that. And then the last thing is just being careful not to overfund your practice if you can avoid it. So you can always upgrade down the road. I think the things that are super important to spend money on in the beginning are, you know, your test kits, make sure you have what you need. You don’t need to over test.
You need a basic website, need some basic branding, but you can always upgrade down the road. So just avoid that temptation to kind of over fund your practice in the beginning. I would put money into a search engine optimization and a little bit of marketing, if anything, but it’s really tempting to throw a lot of money at a fancy website or even a logo and branding and things like that. And honestly, I just don’t think you need that as long as you have some basic.
basic provisions in those areas. And then a nice marketing engine via SEO. You should be pretty good to go. So I hope that you’re walking away, as always, with some concrete information and a little bit of hope. mean, the intent here is to demystify the launching costs. And yeah, it can sound like a lot of money. And when you really break it down, like let’s just say we’re paying back $1,000 a month.
Typically, that’s going to be much less than you would charge even for one evaluation. So I think it’s very doable. It’s very doable. And as I’ve said in the past, math can solve or help a lot of anxiety. So do your numbers, look into some of these funding sources, and just know that it is totally doable. All right, y’all. Thank you so much for tuning into this episode. Always grateful to have you here.
Dr. Jeremy Sharp (48:53.09)
I hope that you take away some information that you can implement in your practice and in your life. Any resources that we mentioned during the episode will be listed in the show notes, so make sure to check those out. If you like what you hear on the podcast, I would be so grateful if you left a review on iTunes or Spotify or wherever you listen to your podcasts. And if you’re a practice owner or aspiring practice owner, I’d invite you to check out the Testing Psychologist Mastermind groups.
I have mastermind groups at every stage of practice development, beginner, intermediate, and advanced. We have homework, we have accountability, we have support, we have resources. These groups are amazing. We do a lot of work and a lot of connecting. If that sounds interesting to you, can check out the details at the testingpsychologist.com slash consulting.
You can sign up for a pre-group phone call and we will chat and figure out if a group could be a good fit for you. Thanks so much.
Dr. Jeremy Sharp (50:11.384)
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