What Is Private Practice? Definition, Advantages, and Challenges

Private practices offer numerous benefits for both clients and practitioners, including more control over your schedule, the ability to choose your clients or patients and set your own rates, and the potential to make more money. But the road to starting and maintaining a private practice can be daunting.

In this blog post, we’ll answer the question, “What is private practice?” explain how it works, and detail the steps you’ll need to take to create and run a successful one.

Key Takeaways

  • Private practice refers to a professional business not owned or overseen by a government or corporate entity.
  • Health care providers, legal professionals, business consultants, and creative professionals are typically in private practice.
  • Advantages of private practice include autonomy, ideal work culture, meaningful relationships with clients, higher earning potential, and the opportunity to develop skills.
  • Challenges of private practice include knowledge of managing a business, managing expenses and capital, broad knowledge of the field, risks associated with independence, and regulatory and legal considerations.
  • Steps for starting a private practice include networking with other practitioners, creating a business plan, obtaining professional certifications and legal permits, hiring staff to manage auxiliary functions of the business, and promoting the practice.
what is private practice

Definition of Private Practice

A private practice refers to a business or professional practice operated by an individual or a group of professionals, typically in the health care, legal, or counseling fields. It operates independently from governmental or institutional organizations and is usually owned and managed by the practitioners themselves.

Private practices provide services directly to clients or patients, offering personalized care and maintaining greater control over their practice’s operations, policies, and financial aspects.

Setting up a stand-alone office, establishing schedules based on availability, and hiring staff are some of the tasks that private practitioners undertake. Nowadays, it is not uncommon for professionals like doctors, lawyers, and others to work for a company while pursuing private practice during their available hours.

A private practice gives you the freedom to build stronger connections with clients while using a dependable, systematic approach to sharpen their skills. 

Advantages of Private Practice

The following are some of the perks of opening a private practice:


Unlike the more restrictive work environment of an employee, private practitioners have the freedom to decide on the strategy for their own professional business. 

Aside from the fact that they can proactively modify their operating hours to entertain the varying needs of their clients, they can also provide more flexible payment options to ensure a higher degree of client retention and satisfaction.

Ideal Work Culture

One of the rewarding outcomes of undertaking the path of private practice is establishing a work culture aligned with your own values and principles as a professional. 

You can create your own procedures and guidelines for serving clients and craft a unique mission and vision statement, core values, and KPIs to propel your firm to success. 

Indeed, these are all critical tasks that private practitioners typically undertake in the early stages of their careers.

Meaningful Relationships With Clients

It is highly likely that private practitioners can build and cultivate meaningful relationships with their clients. This is because they can interact more and closely monitor the progress of their client’s cases. 

With consistent and effective service, private practitioners can eventually be considered trusted partners by their clients over the years.

Higher Earning Potential

Private practitioners enjoy greater autonomy and have complete control over their income. They can decide how many clients to accommodate in their schedules, unlike in employment, where compensation is fixed. Some practitioners even work evenings and weekends to expand their client base.

Opportunity to Develop Your Knowledge and Skills

Private practitioners must stay up-to-date with their knowledge and skills to ensure they provide timely and relevant solutions to clients’ varying needs. 

Continuous professional development (CPD) certifications and training, as well as networking and communication with other experts in their field, are essential responsibilities that practitioners undertake to sustain the effectiveness of their private practice.

Challenges of Private Practice

Despite the dynamic and rewarding benefits of becoming a private practitioner, there are also several challenges that accompany it: 

Requires Knowledge of Managing a Business

Since the path of private practice is essentially the creation of one’s business, a well-grounded knowledge of establishing, operating, and managing this career is necessary. 

In addition to their client-facing activities, private practitioners must also perform other tasks to support the overall operation of their business. This includes maintaining the office space and managing cash inflows and outflows. To accomplish these tasks, practitioners must hire competent and reliable staff members.

Managing Expenses and Capital 

Private practice is suitable for professionals who have matured in their field and are already capable of shouldering the needed capital for starting this venture. 

However, it must be noted that before the actual operation, expenses related to the construction of a physical or virtual office, procurement of the needed business permits, and allocating a sustainable amount of compensation for their hired staff must be already in place. 

Requires a Broad Knowledge of the Field

Achieving a balance between having expertise in a specific field and being a credible generalist is a challenge that private practitioners must face. It is important to maintain this balance to ensure client loyalty and the ability to provide services to a wider range of cases.

Risks Associated With Independence

Since they are their own bosses, private practitioners are more likely to experience a higher degree of work-related and financial stress than professionals who work for someone else.

Some states have stringent guidelines for a professional to proceed with private practice. Given that private practitioners undergo minimal supervision, licensing entities might require them to achieve an appropriate length of service as employed professionals before they are permitted to work independently.

Types of Professionals in Private Practice

types of private practice professionals

Here are some of the professionals that are known to work as private practitioners:

Health Care Providers

Health care providers like physicians, therapists, and dentists often establish private practices. Some prefer to have their own offices and set their clinic hours, while others offer house-to-house services after clients have scheduled an appointment and agreed on a meeting location. 

This is particularly common for physical and occupational therapists. Their work includes a thorough medical diagnosis of the patient and the identification of the right approaches and succeeding steps to manage and cure the patient’s illness.

In private practice, legal professionals serve as advocates for their clients, whether they are individuals or organizations, in civil or criminal court proceedings.

Their work includes the acquisition of relevant case facts by conducting interviews and research, creation, and proofreading of the needed legal documents, and provision of legal advice to reach a valid settlement for their clients. 

Business Consultants 

The role of business consultants is crucial in helping private organizations become productive and effective in achieving their goals. 

First, they diagnose the underlying issues of the business by conducting an extensive analysis, research, and interaction with the stakeholders. After identifying the problems, they conceptualize an approach or strategy to reach a certain organizational objective within a well-defined timeline.  

Creative Professionals 

To efficiently generate and manage resources and outputs related to art and design, creative professionals such as writers, designers, and artists often work with entertainment-related companies or private firms’ marketing and R&D departments. 

How to Start a Private Practice

Although the approach may vary depending on the field of expertise, here are some steps that must be taken into account for a professional to start a private practice.

Network With Other Private Practitioners

how to start a private practice

Professionals can begin their journey as private practitioners by learning from the successes and failures of their colleagues who have already established themselves in this field. 

By creating strong networks and joining related fellowships and conferences, interested professionals can take note of their colleagues’ experiences and advice, thus avoiding common pitfalls.

Create a Business Plan

After acquiring sufficient insights from their colleagues, they have to formulate a business plan, which includes the creation of the business details, marketing strategies, operational plans, and financial projections of their income and cash flows.

Professionals looking to establish private practices must obtain all necessary certifications and business permits before opening their services to the public, which varies depending on their location of operation.

Formulate a Structured Payment Scheme for Your Clients

Health professionals may join insurance provider panels to expand their clientele who depend on health insurance for routine medical check-ups. 

A clear contract also benefits private practitioners working on time-bound projects with clients. Online payment methods are now popular for clients who prefer cashless transactions.

Hire Staff to Accomplish Auxiliary Functions of the Business

Private practitioners hire staff to manage administrative tasks like scheduling appointments, paying expenses, tracking revenues, and completing paperwork. This reduces burnout and allows them to provide better service to their clients.

Promote Your Business

Private practitioners can utilize various marketing strategies to promote their services to the public. By identifying their niche and working with marketing personnel, they can create effective approaches to attract potential customers. Partnering with other private practitioners or organizations can also help widen their reach.

Frequently Asked Questions

Why do doctors prefer private practice?

Private practice is suitable for doctors who prefer to have more autonomy in managing the needs of their patients. They are also more flexible in deciding their preferred schedules, technology, and equipment to meet their clients’ needs.

What is the work of private practice?

Private practice is essentially a form of business wherein a licensed professional independently provides a service to a client. 

How do doctors make money in private practice?

Doctors are usually compensated for every appointment that they have with their patients. They can partner with insurance providers to receive commissions from patients who rely on health insurance policies (e.g., HMOs) to undergo medical assessments and other medical-related procedures. Also, doctors can provide various modes of payment for their clients to choose from (cash, check, or online means of payment). 

What type of doctors are in private practice?

Primary care doctors are the types of doctors that usually venture into private practice. Specifically, these are physicians who are experts in family medicine, internal medicine, pediatrics, or obstetrics/gynecology.

Final Thoughts

A private practice enhances autonomy and flexibility, and has the potential for greater financial rewards.

Now that we’ve answered the question, “What is private practice?” you know it has many benefits, but also takes considerable effort, dedication, and business aptitude. If you’re considering establishing your own private practice, ensure you conduct extensive research, formulate a comprehensive business plan, and consult with experienced professionals. 

With the right mindset and approach, opening a private practice can be a fulfilling and successful career path.