Start a Private Practice in Texas: Checklist

Starting a private therapy practice in Texas is one of the most exciting decisions you will ever make as a mental health professional. You have completed years of training, logged thousands of supervised hours, and passed your licensing exam. Now it is time to build something of your own. This comprehensive checklist walks you through every critical step, from BHEC licensing verification to opening your doors to your first clients.

Here is the reality: graduate school taught you to be an excellent clinician, but it did not teach you how to run a business. If the administrative side feels overwhelming, you are in good company. I have watched dozens of therapists successfully launch Texas practices, and every single one started exactly where you are right now - uncertain but determined.

Step 1: Verify Your Texas Licensing Requirements

Before anything else, confirm your license is in good standing with the Texas Behavioral Health Executive Council (BHEC). This single regulatory body oversees LPCs, LMFTs, LCSWs, and psychologists in Texas. Your BHEC license number will appear on every piece of practice documentation you create.

Log into the BHEC portal and verify your license status, expiration date, and continuing education requirements. If you are coming from another state, ensure your Texas license is fully active before signing any leases or spending money on practice setup.

Step 2: Form Your Business Entity

In Texas, licensed healthcare professionals must form a Professional Limited Liability Company (PLLC) rather than a standard LLC. This is not optional - it is a legal requirement. The PLLC structure protects your personal assets from business liabilities while allowing you to practice under your professional license.

You will file your PLLC formation documents with the Texas Secretary of State. The filing fee is $300, and processing takes approximately 3-5 business days for online submissions. Choose your business name carefully - it must include "PLLC" or "Professional Limited Liability Company" and cannot be misleadingly similar to another registered Texas business.

Step 3: Secure Essential Insurance Coverage

Professional liability insurance (malpractice coverage) is your first line of defense against claims. Texas does not legally require therapists to carry malpractice insurance, but practicing without it is reckless. A single lawsuit could wipe out your personal savings and destroy your career.

Most new Texas therapists purchase policies with $1 million per occurrence and $3 million aggregate coverage. Annual premiums typically range from $400 to $900 depending on your license type, specialty, and claims history. Major providers include HPSO, CPH and Associates, and the American Professional Agency.

Step 4: Establish HIPAA Compliance

HIPAA compliance is not optional, and violations can result in fines ranging from $100 to $50,000 per incident. As a private practice owner, you are both the covered entity and the one responsible for ensuring every aspect of your practice protects patient information.

Start by creating written privacy policies and procedures. You need a Notice of Privacy Practices that every client receives, a process for handling PHI requests, and documented training for anyone who accesses patient information - even if that person is just you.

Step 5: Choose Your Practice Management Tools

Your electronic health record (EHR) system will become the operational backbone of your practice. Choose wisely from the start - migrating patient records between systems later is both painful and risky from a compliance perspective.

Look for an EHR that includes scheduling, documentation, billing, and secure client communication in one platform. Standalone tools can work, but integrated systems reduce administrative burden and compliance gaps. Make sure whatever you choose comes with a signed Business Associate Agreement.

Step 6: Set Up Your Practice Location

You have several options for where you will see clients: traditional office space, sublease arrangements, home office, or fully virtual practice. Each option has different cost structures, flexibility levels, and compliance considerations.

Many successful Texas practices start with a hybrid model: sublease a few hours of office space per week while building your caseload, then transition to dedicated space once revenue stabilizes.

Step 7: Set Your Session Fees

Setting your fees is both a business decision and a clinical one. Underpricing your services does not just hurt your income - it can actually make clients value therapy less and reduces the sustainability of your practice.

Research local market rates for your specialty and license type. In Texas, private pay rates for individual therapy typically range from $80 to $200 per session depending on location, specialty, and experience level. Urban areas like Austin, Dallas, and Houston command higher rates than rural communities.

Step 8: Market Your Practice

Even excellent clinicians struggle if potential clients cannot find them. Your marketing does not need to be aggressive or salesy - it simply needs to make your services visible to people who are already looking for help.

Start with the basics: create a professional website, claim your Google Business profile, and list yourself on therapist directories like Psychology Today. These three steps alone will generate most of your initial referrals.

Frequently Asked Questions

How much money do I need to start a private practice in Texas?

Most Texas therapists launch their practices with $2,000 to $5,000 in startup capital. This covers PLLC formation ($300), malpractice insurance ($400-900 annually), EHR subscription (first month), website setup, and initial marketing. Starting with a sublease arrangement rather than a traditional lease significantly reduces upfront costs.

How long does it take to get a full caseload?

Most new practices reach a sustainable caseload within 3 to 6 months. Factors that speed this up include specializing in high-demand areas, accepting insurance panels, active marketing, and building referral relationships. Some therapists fill their schedule faster; others take longer. Patience and consistent marketing efforts are key.

Should I accept insurance or go private pay only?

This depends on your financial situation and clinical preferences. Insurance panels provide a steady stream of referrals but involve lower reimbursement rates and administrative burden. Private pay offers higher session rates and clinical freedom but requires more active marketing. Many Texas therapists start with insurance panels to build their caseload, then gradually transition to private pay.

Do I need a separate business bank account?

Yes. Mixing personal and business finances undermines the liability protection of your PLLC and creates accounting nightmares at tax time. Open a dedicated business checking account in your PLLC name and run all practice income and expenses through it.

You Have Got This

Starting a private practice in Texas involves significant effort, but you have already done harder things. You completed graduate school. You accumulated thousands of hours of supervised experience. You passed your licensing exam. Compared to those accomplishments, forming a PLLC and setting up an EHR is completely manageable.

Take it one step at a time. You do not have to complete everything at once. Work through this checklist systematically, and before you know it, you will be welcoming your first private practice client through the door.

Thousands of Texas therapists have built thriving practices before you. You can absolutely do this too.