Growing from solo to group practice is one of the biggest decisions you will make in your therapy career. It promises more income, greater impact, and the ability to help more clients than you ever could alone. But it also transforms your role from clinician to business owner. Here is everything you need to know before taking that leap.
The transition from solo to group practice is not just about adding more therapists to your roster. It is a fundamental shift in how you spend your time, what skills you need, and how you measure success. Some therapists thrive in this new role. Others discover they preferred the simplicity of working alone.
This guide will help you understand what group practice expansion actually involves, the real financial picture, and how to decide if it is the right path for you.
Why Therapists Expand to Group Practice
The motivations for growing a group practice vary widely. Understanding your own reasons is crucial because they will shape every decision you make along the way.
Some therapists hit an income ceiling. With only so many hours in a week and only so much you can charge per session, solo practice has natural limits. A group practice removes that ceiling by letting you earn from the work of multiple clinicians.
Others feel isolated. After years of working alone in an office, the idea of colleagues to consult with, learn from, and share the load becomes deeply appealing. Group practice offers professional community in a field that can otherwise feel lonely.
Many therapists also want greater impact. You can only help so many people yourself. Building a team multiplies your ability to serve your community, especially underserved populations or specialized niches where demand exceeds supply.
Good Reasons to Expand
- + You genuinely enjoy mentoring and developing other clinicians
- + You want to increase income beyond what one caseload allows
- + You are excited about building systems and processes
- + You want to serve more clients than you can personally see
- + You dream of building something that could run without you
Warning Signs to Reconsider
- - You are burned out and think more help will fix it
- - You want someone else to handle admin while you just do therapy
- - Everyone else seems to be doing it
- - You dislike confrontation and difficult conversations
- - You prefer working independently without oversight responsibilities
The Financial Reality of Group Practice
Group practice economics work differently than solo practice. The math seems straightforward at first - if you keep 30-35% of what each clinician bills, and you have five clinicians, that adds up quickly. But expenses scale up too, often in ways new practice owners do not anticipate.
Your overhead increases significantly. Larger office space, more technology licenses, administrative support, higher insurance premiums, and increased marketing costs all eat into that margin. Many first-time practice owners are surprised by how thin the profit margin actually is in the early years.
Monthly Expense Comparison: Solo vs Group Practice
| Expense Category | Solo Practice | Group (5 Clinicians) |
|---|---|---|
| Office Space | $500 - $1,500 | $2,500 - $6,000 |
| EHR and Practice Management | $50 - $150 | $250 - $500 |
| Administrative Support | $0 - $500 | $2,000 - $4,000 |
| Marketing and Advertising | $50 - $200 | $500 - $2,000 |
| Insurance and Liability | $100 - $200 | $500 - $1,200 |
| Clinician Compensation | N/A | 60-70% of collections |
| Typical Total Overhead | $700 - $2,550 | $5,750 - $13,700 |
Here is the reality: if your clinicians keep 65% of what they bill and your overhead runs 20%, you are making about 15% on each session they provide. With a clinician billing $8,000 per month, that means roughly $1,200 goes to you. Multiply by five clinicians and it adds up, but it takes time to reach that scale.
Financial Runway Requirement
Plan for 6-12 months of uncertain income during the expansion phase. Many practice owners take a temporary pay cut during growth. Having savings or a line of credit prevents making desperate decisions that hurt your practice long-term.
Hiring the Right People
Your first hires will make or break your group practice. One excellent clinician can build your reputation. One poor hire can damage it with every client they see.
Clinical quality must be your top priority. Check references thoroughly. Review their documentation samples. Have them complete a clinical scenario exercise. Your name is on every session they provide.
Cultural fit matters more than you might expect. You will spend significant time with these people. Do you enjoy their company? Do they share your values about client care? Can you imagine having difficult conversations with them?
Hiring Checklist for Your First Clinician
- Verify active licensure and check for any disciplinary actions
- Contact at least three professional references
- Review clinical documentation samples for quality and compliance
- Conduct clinical scenario assessment during interview
- Clarify contractor vs employee classification with a lawyer
- Create detailed written agreement covering compensation, expectations, and termination
- Establish 90-day probationary period with clear milestones
A critical legal note: contractor versus employee status is a legal distinction, not a choice you make for convenience. Misclassification can result in back taxes, penalties, and legal liability. Consult with an employment attorney before bringing on your first clinician.
Essential Systems for Group Practice
Solo practice can run on intuition and memory. Group practice cannot. You need documented systems that work whether you are present or not.
Operational Systems
- 1. Scheduling coordination - Room assignments, telehealth protocols, time-off management
- 2. Client assignment - Intake process, matching criteria, waitlist management
- 3. Communication - Team messaging, meeting cadence, urgent issue protocols
- 4. Documentation - Note templates, compliance requirements, deadline tracking
Clinical and Financial Systems
- 1. Quality oversight - Chart reviews, outcome tracking, supervision structure
- 2. Billing and collections - Insurance claims, payment posting, AR management
- 3. Payroll - Compensation calculation, tax withholding, payment schedule
- 4. Credentialing - Initial credentialing, re-credentialing tracking, CAQH updates
Build Systems Before You Hire
Document your processes before bringing on clinicians, not after. It is much harder to systematize when people are already doing things their own way. Your onboarding should include clear, written expectations for every aspect of their work.
The Time Investment Reality
Many therapists underestimate how much time management requires. Expect to spend 5-15 hours per week on group practice management tasks, and that number grows with your team size.
Weekly responsibilities include reviewing documentation, providing clinical consultation, handling scheduling issues, managing the client pipeline, and addressing the inevitable HR situations that arise. Monthly tasks add payroll, financial review, marketing assessment, and team meetings.
This time has to come from somewhere. Most practice owners gradually reduce their clinical caseload as the practice grows. Some eventually step out of direct client work entirely to focus on management. Others maintain a small caseload to stay clinically sharp and grounded in the work.
The Three Phases of Group Practice Growth
Understanding what to expect at each phase helps you prepare and prevents discouragement during difficult periods.
Phase 1: Launch (Months 1-6)
High chaos, low profit. You are building systems, training your first clinicians, and learning what you do not know. Expect your income to drop initially as you invest time in infrastructure. This is normal.
Focus: Systems, hiring quality, establishing culture
Phase 2: Stabilization (Months 7-18)
Systems start working, caseloads fill, revenue becomes predictable. You will likely lose at least one clinician during this phase and learn valuable lessons about hiring. Profitability begins.
Focus: Refining systems, building referral sources, team development
Phase 3: Scale (18+ Months)
The practice runs smoothly. You can step back from daily operations. New hires onboard efficiently. Revenue is stable and growing. Now you face decisions about how much bigger you want to grow.
Focus: Strategic growth, leadership development, sustainability
Is Group Practice Right For You?
Answer these questions honestly. There are no right or wrong answers, but they reveal whether your temperament and goals align with what group practice requires.
Self-Assessment Questions
- Do you enjoy teaching, mentoring, and developing others?
- Are you comfortable making decisions that affect other people's income?
- Can you handle conflict directly and constructively when it arises?
- Are you willing to learn HR, accounting, and management skills?
- Do you have financial runway for 6-12 months of uncertain income?
- Can you tolerate ambiguity and solve problems without clear answers?
- Are you excited, not anxious, about the business side of practice?
If you answered yes to most of these, group practice may be a strong fit. If several feel like obligations rather than opportunities, there is nothing wrong with a thriving solo practice.
Key Takeaways
- 1. Group practice is a different job - you become a business owner who happens to do therapy, not a therapist with extra income.
- 2. The financial reality is thinner margins - expect 15-20% profit after clinician compensation and overhead, not the windfall many imagine.
- 3. Your first hires are critical - one bad clinician damages your reputation with every client they see.
- 4. Build systems before you hire - documenting processes after people are in place is exponentially harder.
- 5. Plan for 12-18 months to stability - the launch phase is chaotic and often temporarily reduces your income.
- 6. Self-awareness matters - thriving in group practice requires genuinely enjoying management, not just tolerating it.
Frequently Asked Questions
How much money do I need to start a group practice?
Plan for $10,000-$30,000 in initial expenses depending on your market. This covers legal setup, office space deposits, technology systems, and initial marketing. More importantly, have 6-12 months of personal living expenses saved since your income may drop during the transition.
Should I hire contractors or employees?
This is a legal determination, not a preference. The IRS has specific criteria for worker classification. If you control how, when, and where the work is done, they are likely employees regardless of what your contract says. Consult an employment attorney before making this decision.
How long until my group practice is profitable?
Most group practices reach consistent profitability within 12-18 months. The first 6 months typically involve investment without return. Break-even usually happens between months 6-12 with a full caseload of clinicians.
What is a fair compensation split for clinicians?
Industry standard ranges from 60-70% of collections for contractors, with the practice keeping 30-40%. For employees, base salaries plus potential bonuses are more common. Your split should account for what you provide - referrals, administrative support, space, supervision, and liability coverage.
How many clinicians should I hire first?
Start with one. See how that relationship works, learn from your mistakes, and refine your systems before adding complexity. Many practice owners who hire multiple clinicians simultaneously struggle to give adequate attention to onboarding and quality control.
Can I keep seeing clients while running a group practice?
Yes, but expect to reduce your caseload over time. Most practice owners maintain 10-20 clients while managing a small practice, though some step out of clinical work entirely as the practice grows. Your clinical income will be replaced by practice revenue.
Growing from solo to group practice is not a decision to make lightly, but for the right person with the right preparation, it offers rewards that solo practice cannot match. Take time to assess your motivations, prepare financially, and build systems before you hire. The therapists who succeed in group practice are those who embrace the business owner role rather than viewing it as an obstacle to clinical work.
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TheraFocus Team
Practice Growth Strategists
The TheraFocus team is dedicated to empowering therapy practices with cutting-edge technology, expert guidance, and actionable insights on practice management, compliance, and clinical excellence.