By Paul Peterson and Jordan Harris
You’re finishing up notes after a day full of clients. You’ve been a fully licensed therapist for a few years and wondering, “Is this what my life will look like forever? Do I just see clients, write notes, and go home? Or is there some other way to provide for myself while helping people?”
Many of us think that we can just hire other clinicians once we’re full in order to supplement our income. It makes sense, right? If I can’t see more people, but I want to make more money per hour (and don’t increase my rates), I need to find ways to earn money outside of me seeing clients. One way to do that is support other therapists in their work and have them pay me for it.
When we looked into starting a group ourselves a few years ago, we approached it in our usual way:
Gather the myths surrounding running a group practice
Do the research and run the numbers
See if we can improve upon the model (if needed)
Decide if it’s worth doing
What we found was shocking. It seriously blew our expectations and assumptions out of the water.
Here’s what we found.
The Salary of A Solo Therapy Practice Owner
The usual model for a business in our field is simple. I’ll use fairly common numbers for a higher-earning therapist in our area who takes insurance:
Take the number of hours of weekly session multiplied by your rate multiplied by the weeks you work:
25 (Hours) x $135 (Rate) x 46 (Weeks Worked) = $155,250
This is your gross income, meaning that no expenses have been taken out yet. To get your net income, we need to find the expenses.
Here’s a standard solo private practice expense list in our area in 2025 for a fully licensed clinician:
$155,250 (Gross Income) - $12,336 (Expenses) = $142,914 (Yearly Net Income)
Expenses reduce your gross income by about 8%.
So in a solo practice in Northwest Arkansas (our area) it would be reasonable to assume you take home $142,914 before taxes.
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The Salary of A Group Practice Owner (Simple Version)
Before we knew about the complexity involved in running a group, I thought the group model was as simple as multiplying the income by the number of clinicians, like so:
Take the number of hours of weekly therapy multiplied by your rate multiplied by the weeks you work:
25 (Hours) x $135 (Rate) x 46 (Weeks Worked) = $155,250
Then, add how many clinicians are in the group, assuming they all carry similar case loads:
$155,250 (1 Clinician’s Earning) x 5 (Number of Other Clinicians) = $776,250
In this simplified (naïve) model, we then take this gross group practice income and subtract expenses to get the group practice owner’s yearly income. This income is just from running the group business, not from seeing their own clients as well.
$776,250 (Group Gross) - ??? (Expenses) = ??? (Group Owner Income)
When we look at group practice expenses, you might think we could just take the solo business expenses and multiply it by the number of clinicians. However, some expenses don’t need to be repeated—Wifi, for example, gets a little more expensive, but maybe not 5x more expensive:
$776,250 (Gross Income) - $53,136 (Expenses) = $723,114 (Group’s Yearly Net Income)
Expenses reduce your gross income by about 6.5%.
If the group takes 30% of session fees (which is the gross income) and we subtract expenses, we can get the practice owner’s income:
$232,875 (30% of sessions) - $53,136 (Expenses) = $179,739 (Practice Owner’s Business Income) [1]
So it seemed to me that as a group practice owner, a reasonable yearly income is $179,739 before taxes. Sweet! I’m rich!
If we stop here, we could say that group practices are:
More efficient than solo practices
Potentially a big money-maker for the group owner
However, we’ve left out a few big-ticket items that change the equation dramatically. The next few things are the ones that we hadn’t thought about when we were initially looking at the possibility of running a group practice.
The Salary of A Group Practice Owner (Nuanced Version)
To fill out the group business, we need to add a few expenses that are a result of scaling:
A clinical director
Billing and administration staff
Difficulties associated with filling up all therapists
Legal Fees: HIPAA, Employee/HR, Business Litigation, Real Estate
New employee onboarding and training
1 - A Clinical Director (CD)
Most clinical directors that we talk to say they have a small base pay that is fixed, and then they earn about 1% of total revenue in the practice. Other approaches we’ve heard about include paying a higher set salary or paying the CD a comparable hourly rate they’d make as a therapist. These other approaches send the practice owner’s income down even further, so we’ll not explore them in this blog post, which has the intention of streamlining every phase of the process in favor of the practice owner’s income.
2 - Billing and Administration Staff
The bigger the practice, the bigger the staff needs to be. Since we’re modeling a small practice with only 5 clinicians, let’s assume that 40 hours per week of admin time (two people at 20 hrs) at $20/hr is sufficient for the group’s needs. They work 48 weeks out of the year for a total expense of $38,400. Best case scenario, they would handle all insurance billing, scheduling, some administration work, and other front desk tasks. More realistically, it takes a few good specialists to really do all of these jobs, but we’ll start with the ideal situation and move from there.
3 - Difficulties Getting Full
It can be difficult to fill the caseload of 5 clinicians. If they’re each seeing 25 clients per week, that’s 125 sessions each week. Assuming each client stays on average for 12 sessions (some will come once, some 40+ times), they would need to have 16 new clients reaching out each week, for every week of the year, in order to keep their therapists full. (This assumes that they can successfully schedule a first session with 2 out of 3 clients that call.) We figure this out via our fancy calculator.
That’s a tall order, especially if the person running the group practice is a therapist and not a business expert. So, most practices struggle to keep everyone full, and begin using tactics to bridge that gap:
Lower rates or take low-paying insurances in hopes of getting more potential client calls and landing more people that call in a first session
Pay for marketing and/or a marketing specialist
Practice owners accept the fact that they cannot get their therapists full, then put that burden on the therapists, which usually results in most clinicians also floundering and not being full all the time
4 - Legal Fees
The larger a business is, the more likely it is to have HIPAA breaches, court appearances, and or legal actions against it, like getting sued. For our small practice, we can assume that one attorney with a yearly retainer of $3,000 is enough for day-to-day operations, and we’ll add another $1,500 per year, which assumes that every few years a singular, larger legal issue comes up costing between $4,500-$6,000. (When we scale this to more and more hired clinicians, the legal fees increase quite a bit as well.)
5 - New employee onboarding and training
Each time we add another layer to a group practice, we also have to add a process to bring them into or out of the company. From administrative staff, to clinicians, to finding another good lawyer or marketing expert, every shift in personnel requires time and money.
Imagine the person at your front desk who greets clients, answers scheduling and billing questions, and needs to be able to run the EHR, calendar, and insurance software or websites. This job requires quite a bit of know-how, and when staff aren’t trained well, clients report bad customer service and get frustrated about the therapy experience. In addition, since hired office support usually isn’t paid very well, they don’t have strong incentives to be loyal to the company or give the extra mile to assist a client or do a tedious insurance task.
These numbers can vary widely, but let’s assume some of the training is automated online (which the group pays to access) and some is in-person. Both those being trained and those doing the training need paying. They also need to be set up on the payroll, have some legal paperwork done, and other company-associated integration experiences and technologies.
All of these lower your income
All of these things can bog down the group practice, leading to disgruntled employees and clients. Someone at the front desk might say the money isn’t worth the stress. These positions often have lots of turnover which means—you guessed it—more hiring, onboarding, and training time and money.
So What’s A Realistic Salary for A Group Practice Owner?
So what are the actual numbers for the salary of a group practice owner [2]?
A hypothetical group practice owner is actually more likely to take home $3,904 per year before taxes. Not $182,019 [3].
How Does A Group Practice Owner’s Salary Increase With More Clinicians?
We ran the numbers above for a small group of 5 clinicians just starting out. Here are some projections for group practice owners as the number of clinicians gets larger and larger, ranked by how skilled the practice owner is at running an efficient therapy business.
Successful means the practice owner has navigated the biggest issues and has mostly-full clinicians (20 sessions/wk) at a medium rate ($110/hr). This is close to our example case.
Amazing means they have gone above and beyond to get clinicians full (22-23/wk) and are charging a bit more ($120/hr).
Perfect represents a group that is always full and has cut expenses to the bone, running a perfectly smooth business with cutting-edge efficiency—clinicians are always seeing 25 clients per week at $135/hr, 46 weeks per year. See all our numbers here.
We’re generously assuming the therapist keeps 70% of their session fees.
Note that getting to each successive phase may take 3-10 years, depending on the market and how aggressive your growth and risk tolerance are. Since most of us don’t have a bunch of extra money to throw at starting a new business that might fail, it would take an average therapist a few decades to hit the later stages of group practice growth.
Conclusion: Why We Don’t Run a Group Practice
Jordan and I decided not to run a group practice after all. At first, it seemed like a great way to supplement our income and advance our careers (while also supporting our community mental health missions). After doing the research, examining the myths, and running the numbers, we decided not to go for it.
We didn’t feel like the juice was worth the squeeze. Here’s why.
Group owners take on more liability and complexity running a bigger business
Group owners sign up for a career shift that we felt was too risky; we weren’t ready to learn all the skills of a business manager / entrepreneur
Group owners don’t end up making that much for the work they do.
This last point was huge for us. If you look back at our numbers, a well run solo practice can reasonably be expected to net $142,914 a year. In our model even an amazing 15 person group practice would only make $133,811. That’s making $10,000 LESS, for a lot MORE stress.
These are our reasons, but we realize that others have different priorities. Jordan and I like our autonomy and low-risk solo practices. We try to run businesses with low overhead, low risk, and high margins. A group practice didn’t seem to fit these parameters.
But say you did want to run a profitable group practice? How would you do it? We’ll discuss that in an upcoming article. Stay tuned!
Paul + Jordan
Notes
[1] We’re assuming the group practice owner isn’t seeing clients.
[2] This number is a more comprehensive estimate of a group owner’s starting salary in the example scenario above, assuming they’re running into some of the issues that a lot of owners face.
That said, they might still have time to see 18 clients a week themselves at $125/session, bringing home an additional $103,500 for a total of $107,404. Still, for our liking this isn’t great.
We’d still be back to seeing clients and still not making more than we would if we only focused on solo practice.
[3] In our example we assume a 5-clinician practice, with two staff assisting, and a need to replace one of them every 9 months.
We’re assuming the office staff need 20 hours of training, half of which is live, and to be onboarded into the company’s systems. This costs around $1,200 each time. They are also much less effective the first month or two. Taking all of these other externalities into the process, many researchers estimate that it costs 20% of a midrange employee’s salary to replace them. Since the front desk job is usually quantified a little below that level, we’ll assume a total cost of 10% of their salary for a total cost of $1,920 every 9 months for a yearly average of $2,560.
We’re also assuming that 1 therapist is replaced every year, requiring a similar number of hours to learn some of the group’s systems but not needing training in the craft of therapy. They would most likely still reduce productivity for a few months, as they don’t start full, for a total onboarding cost of 20% of 1 clinician’s yearly gross income.
As you can notice quickly, each of these reduces the gross income of the practice. When we total up these expenses, we now have to decrease the gross income by quite a bit.
Paul Peterson and Jordan Harris are co-founders of Private Practice Incubator, a consulting firm which teaches counselors how to launch a solo practice.
If you'd like to learn more about launching your practice visit us here.
I, too, decided the extra stress and risk of a small group practice wasn’t worth it to me. Being a solo practitioner has allowed my career to ebb and flow with the needs of my home/family. My expenses as a solo practitioner are greater than those you listed.