Planning to start your own speech-language pathology practice? Consider creating a “to do” list as the first step.

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Even for a simple one-person SLP practice based in your home, startup startup can be complex. You’ll need to form and register your business, create a budget, and put in place back office processes like bookkeeping, accounting, and billing that keep revenue flowing smoothly.

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Luckily, your “to do” list keeps everything in order. And by outsourcing tasks like bookkeeping and accounting, you can free up more time to focus on getting your SLP practice off the ground.

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Here’s how to get started.

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Before you begin

Before plunging into technical details like business structures, bookkeeping, and billing, decide on the fundamentals of how your practice will run.

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That includes: 

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• What your niche is. Your niche determines your target market. For instance, you may choose to focus on early intervention, neurodiversity-affirming therapy, literacy, or speech and sound disorders. Choosing a niche now helps you make important decisions, like where you will locate your SLP practice and how to market it.

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• Whether you’re going solo or starting a group practice. Generally, this guide assumes you’re starting a solo practice, without employees or business partners. But if you plan to hire practitioners or partner with other SLPs, expect to spend more time setting up payroll, managing staff, or electing a multi-member structure like an S corp or a partnership.

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• Your location. If you intend to run your SLP practice out of your home, consider any renovations you may need to make so you can see clients. If you plan to rent a space, that will affect your startup budget and add new steps like signing a lease. 

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• How you’re paying for it. You may be able to launch a simple, home-based practice with limited services for as little as a few thousand dollars. But commercial rental can drive up the cost. Consider funding options like business startup loans or lines of credit.

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If you’ve considered these factors but you’re still hazy on the details, it could mean you’re not quite ready to launch your own SLP practice. You may benefit from hiring a consultant to help you make concrete plans.

Build a startup budget for your SLP practice

Your startup budget will vary widely depending on the size of your practice

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Some major expenses to consider:

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• Rent
• Renovations
• Furniture
• Equipment
• Insurance
• Bookkeeping and accounting fees
• Legal consultation
• Business registration
• Banking fees
• Electronic health records (EHR), scheduling, invoicing, and other software subscriptions
• Marketing, advertising, and signage 
• Continuing education requirements
• Membership in professional organizations 
• Payroll services
• Wages and salaries (if you hire employees or contractors)
• Professional website
• Directory listings
• A business vehicle (if travelling to treat clients)

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Create two budgets:

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• One for startup expenses must pay for immediately, such as first and last month rent and damage deposit, equipment, your website, business registration, and insurance;
• Another for monthly fees, including rent, financing or loan payments, and accounting and bookkeeping fees.

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It’s a good idea to calculate both the amount you need to launch your practice and the amount you will need to spend during your first 12 months in operation.

Get an Employer Identification Number (EIN)

You need an Employer Identification Number (EIN) even if you don’t have employees, because it’s necessary for opening a business bank account and registering a business entity.

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Your EIN is like an SSN for your business. The IRS uses your EIN to track your tax filings and payments.

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Luckily, an EIN costs nothing, and you can apply for one online.

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Get an National Provider Identifier number (NPI)

A National Provider Identifier number (NPI) is key if you plan to become credentialed and bill insurance.

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However, even if you are planning to launch a cash-pay-only practice, you will need an NPI for out-of-network billing. 

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An NPI number is a ten-digit code, and you can apply for one online.

File a Doing Business As name (DBA), if necessary

If you have plans to operate under your own name, you do not need a doing business as (DBA) name. If you intend to add anything on to your name, or operate under a business name, you must register a DBA.

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For example, you would not need to register a DBA in order to operate as “Juana Perez,” but you would need to register a DBA in order to operate as “Juana Perez Speech Therapy” or “South River Speech-Language Pathology Clinic.”

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The cost of registering a DBA varies by state. For more info, check your Secretary of State’s website.

Set up a legal entity that protects you

As soon as you start working as an SLP and earning and income, the IRS considers you a sole proprietor.

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When you are a sole proprietor, your person and your business are identical. You file one tax return for both you and your business, and report business revenue and expenses on Schedule C of Form 1040.

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Since you and your business are one and the same, if your business owes any debts, you’re personally liable for them. Also, if someone sues your business, they sue you personally.

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Registering a separate business entity gives you some protection, because then your person and your business are considered legally separate entities. 

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In theory, if a lender tries to collect on one of your business’s debts, or if someone sues your business, it will only impact your business and its assets. Your personal assets remain protected.

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In practice, this protection is provisional. Your assets only remain protected so long as you meet the requirements of liability protection. That means keeping your business and your personal assets separate—with separate bank accounts, separate books, separate credit accounts, etc.

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You register a limited liability company (LLC) with your Secretary of State. The cost of registration varies according to your state. So do the annual fees you must pay to maintain your separate business entity.

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Many states require physical therapists and other professionals to register professional LLCs (PLLCs). These business structures typically demand that you maintain a certain amount of professional liability insurance coverage.

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Once you have registered your LLC or PLLC, you can then elect your tax status. You can choose to be taxed as a partnership, a C corporation, an S corporation, or a disregarded entity (which operates similarly to a sole proprietorship).

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Don’t procrastinate when it comes to registering a business entity. Skipping this step now can create complications in the future, when it will be harder to switch. You can learn more about registering an LLC or a PLLC from your Secretary of State’s website.

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Get a business license and apply for permits

In most cases, your state requires you to obtain a business license before your practice can start operating. The process varies from state to state. Your Secretary of State or your local branch of the Small Business Association (SBA) can provide you with the necessary steps.

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A business license allows you to operate within the bounds of your city or municipality, and the cost of obtaining one ranges from $80 – $200. 

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In addition to a business license, you may need to obtain operating permits in order to set up shop, particularly if you are operating out of a rented commercial space as opposed to your home. Contact the city or the municipality where your SLP practice will be based to find out which permits you need.

Purchase liability insurance

In most cases, your licensing board will require you to have professional liability insurance in order to operate.

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Professional liability insurance protects you in the event you are sued for malpractice or if a client files a complaint against you with your licensing board. It can cover the cost of legal fees as well as any damages you are required to pay.

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If you are a member of the American Speech-Hearing-Language Association (ASHA), you can save on the cost of insurance.

Open a business bank account

A small business bank account is more than a necessity—it’s also a powerful tool for running your practice’s back office.

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Most accounting and bookkeeping software—plus financial platforms like Heard—sync with your bank account. That means each transaction in your account is imported to your bookkeeping system so it can be categorized.

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Your bookkeeper—whether that’s you, using software, or the professional team at Heard—categorizes each transaction. When personal and business transactions are mixed in one account, the process becomes much more complicated and time-consuming. And if you do your own bookkeeping, it can lead to costly errors.

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Even more important: in order to maintain the liability protection offered by an LLC, you need to keep your personal and business finances separate. It’s impossible to do that unless you have separate bank accounts.

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Heard has partnered with BlueVine to offer online business checking accounts for SLPs. When you register with BlueVine, you avoid a lot of the business checking fees banks typically charge. There are other perks, too—like earning 1.5% interest on your account balance if you meet certain minimum banking requirements. Learn more about Heard and BlueVine.

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Choose an electronic health record (EHR) system

An electronic health record system (EHR) gives you a secure, centralized location for all your client information, including:

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• Contact information
• Treatment notes
• Insurance billing information 

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When you use an EHR, you help guarantee HIPAA compliance for your practice.

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Before seeing your first client, shop around and register for an EHR designed for SLP practices. It’s much easier to use an EHR system from the start than to transfer or transcribe the information later, and an EHR will help you stay HIPAA-compliant from Day One. 

Determine how you’ll bill clients

If you are credentialed and intend to bill insurance directly, a software-as-a-service (SaaS) billing solution will save you time and money. It can also reduce the likelihood of claims being rejected. (You can choose insurance billing as an integrated add-on when you sign up with Heard.)

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For cash pay, your billing options include:

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• Your EHR or practice management solution, with built in billing
• Payment processors like Stripe or Square
• Electronic fund transfers via online bank accounts
• A combination of the above

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Typically, EHR systems or payment processors will collect funds from clients, then send them to your bank account via ACH transfer. 

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Make sure you understand how payouts will show up on your bank statement. It’s important for tracking revenue once you set up your bookkeeping system.

Set up your bookkeeping system

Bookkeeping is the day-to-day job of recording and categorizing all your business transactions.

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Each time your practice is paid directly by a client or reimbursed by an insurance company, it’s recorded as revenue on the books. Each time it pays rent, pays insurance premiums, or spends money in any other way, the transaction is recorded on the books as an expense.

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Based on these recorded transactions, you can generate financial reports like:

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• The profit and loss report (P&L), which tells you how your practice is spending and earning money, and how much; and 
• The balance sheet, which summarizes your assets and liabilities.

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Without bookkeeping, it’s impossible to get a clear view of your practice’s financial operations. 

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Also, you need an accurate set of books and financial reports in order to file your taxes accurately. Inaccurate books lead to inaccurate tax filing, which may result in penalties from the IRS. It could also result in your business failing to take advantage of money-saving tax deductions.

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DIY software like QuickBooks allows you to record and categorize your transactions by hand. But it’s up to you to make sure your books are accurate before bringing them to an accountant for tax filing.

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A professional bookkeeper can do your bookkeeping for you, typically by using software like QuickBooks. But unless they are already familiar with how an SLP practice is run, you may find you spend as much time explaining to them how to categorize your transactions as you would doing the books yourself.

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Heard is the only financial platform built for SLPs and other wellness professionals. Our bookkeeping team imports and categorizes transactions for you. Then they hand off your books to qualified tax preparers to guarantee you an accurate tax return that takes advantage of deductions. Learn more about Heard.

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Set fees for your SLP practice

The fees you charge for each type of SLP treatment will depend upon:

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• Competitors’ fees
• Your operating costs
• Your target profit margin
• Staff wages or salaries
• Whether you primarily bill insurance or accept cash payment

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Also, location has an important role to play. Average fees for SLP therapy vary according to state, city, and municipality. 

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For a detailed guide, check out How to Set Your Rate for SLPs in Private Practice.

Choose a location for your SLP practice

If you’re planning to operate your SLP practice in a rented commercial space, you will need to find the right location before you open your doors.

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Some factors to take into account:

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• The location of referral sources. If you expect to receive referrals from particular clinics or other businesses, it could benefit you to have a practice based nearby.

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• Parking. If your rented space does not include parking, take into account street parking and other options nearby. 

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• Space size. How much space do you need to start operating now, versus in the future? Your commercial lease is likely to last at least five years, so keep future expansion plans in mind.

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• Length of lease. While a typical commercial lease lasts at least five years, you may be able to find a landlord who will agree to a three-year lease. A shorter lease offers greater flexibility in case you decide to move locations, but may also create future uncertainty for your practice.

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• Necessary renovations. If you are taking over a space previously used by a wellness practitioner, your rental may already include a front desk and waiting area. But if the space was used by a different type of business, you may need to make renovations before you can start seeing patients. Factor in renovations as a startup cost.

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Commercial leases can be complex. Consider hiring a lawyer to review the terms of your lease before signing. 

Begin marketing your SLP practice

Before your SLP practice launches, create a marketing plan. It should include:

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• Who you’ll market to
• Which channels you’ll use to reach potential clients (e.g. SEO, social media, digital or print ads, referrals)
• How you’ll measure the effectiveness of your marketing
• How much you will spend on marketing for your SLP practice

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Creating a marketing plan and setting a budget before your SLP practice opens helps ensure you are attracting new clients from the moment you go into business. 

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The alternative is to launch without a plan and wait for new clients to come through the door. If you already have an established clientele (from working as an employee of another practice) or if you have a particularly strong referral network, that may work. 

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But it’s better to be overprepared than underbooked. Aim to have the bare minimum in place before you launch:

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• A professional website with online booking and signup for email updates
• One or more social media accounts
• Listings in popular directories for PTs

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Also, take a moment to register your business with Google. That way, it will show up in local search results, and new clients can find your practice easily using Google Maps.

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Once your SLP practice is up and running, it’s time to start planning your finances. The first step? Keeping records of tax deductions for self-employed SLPs.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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Bryce Warnes is a West Coast writer specializing in small business finances.

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