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Private Practice Kickstart
with Miranda Palmer, LMFT
& Kelly Higdon, LMFT

Starting a Counseling Practice Part 7: Creating a GOOD Referral Base

Starting a Counseling Practice Part 7: Creating a GOOD Referral BaseIf you build it, they will come. I talk to therapists daily who truly believed that if they had an office space, and a website, that clients would find them. The truth is, it isn’t just about building it, people have to be able to FIND you!

When starting out in private practice, the fastest way to grow a practice is to have a strong referral base. A strong referral base are people who come in contact with the kind of clients you can provide awesome clinical services to often, who know your work, and can refer clients when appropriate.

Developing a Referral Base

I’ve talked with people who had tons of referrals, but it wasn’t helpful. Case in point: A few years ago, I went to see a new primary doctor who’d I never met before. To say I wasn’t looking or feeling my best was the understatement of the year. I was SICK. Icky, coughy, haven’t showered because I can’t muster up the energy-sick!

As she assessed me, it came out that I was self-employed, and that I was a therapist. She asked what my specialty was- I very clearly remember giving her my elevator speech in my most icky-sicky dispassionate, half-voice/half-cough- and her face LIT up! She was a former therapist, and attracted trauma clients to her primary care practice and had been looking for a great referral!

I was SO sick- so we didn’t talk much, and I didn’t think much about it- until the calls started coming in. Referral after referral. Great right? Every referral without fail was covered by Medicare, which I didn’t accept (and couldn’t as a MFT). I finally called to clarify my practice so we could ensure the referrals were a good match for both of us!

I’ve met tons of therapists who tell me that they get phone calls from clients and “nobody can afford therapy.” In some cases, this includes people reporting not being able to afford even the copayment on their insurance plan. This is an example of having a referral base that is a mismatch for the therapist’s private practice.

What are you great at?

A good referral base needs to understand what you are great at, who you are great at working with, the parameters of your practice, and really believe in what you do. This is why your mom isn’t always a great referral source- she either thinks you can help ANYBODY on the planet, or thinks you are completely incapable!

In order for your referral base to know what you are great at, you need to be able to articulate it! Be clear about exactly what you do. If I had told that wonderful doctor that I saw everybody- she wouldn’t have even given me a second look. Learn how to articulate not just what you “could” do in your scope of practice- but what you really excel at.

Who are you great with?

You also need to determine who you do your best work with. We all want to be inclusive and be able to work with everyone. However, let’s do some math here. Let’s say you work in a ton with only 10,000 people in it. Let’s say, on any given week, one half of one percent of the people in that town were in need of a therapist: That is 50 people! Can you really do great work working with 50 people every week? How big is your town?

You need to clarify for yourself and your referral sources who you can do your best work with in the private practice setting. We need to find a way to actually narrow that focus down, so you get a manageable group of people calling you.

Paradoxically, the more clear you are on who you work with, the more phone calls you will get from motivated clients who aren’t only willing to schedule- but they will do the work, invest their time, show-up, and refer other motivated clients.

Setting boundaries

Now onto therapist’s favorite topic: setting limits or parameters in private practice. In my example, I didn’t take Medicare, couldn’t take it actually. It made the decision quite easy! However, in most cases- you have to develop the specific parameters of how to develop your private practice.

When I started my private practice, I hadn’t been licensed long enough to qualify for most insurance panels, which meant I HAD to start a cash pay private practice, In addition, I had a nursing child at home, and to make private practice make sense, I had to make money without working a ton of hours that required childcare.

When I told certain colleagues and friends I wasn’t taking insurance- several told me that they wouldn’t be referring clients to me. Or, that they would refer clients to me as soon as I starting taking insurance. Initially, it stung a bit, but I kept my focus on my family and the bottom line: To leave my infant- I had to make a decent income! Soon referrals were pouring in, and I had to expand into full-time, and then stop taking new clients altogether.

Remember, a private practice is a business- with self-employment taxes, expenses, and a self-funded benefit package. If you want to keep your doors open, pay your taxes without taking out a second mortgage, and take a day off and still be able to afford groceries- you need to treat your business like a business.

There are TONS of ways to give back to your community. The best way you can give back in the context of your private practice is to do excellent work, and improve the reputation of our profession! Don’t be afraid to hold to your value, even if a friend or family member referred someone over. There will be other referrals in the future.

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Starting a Counseling Practice Part 7: Creating a GOOD Referral Base

Miranda Palmer, LMFT

Miranda Palmer, LMFT is passionate about empowering therapists to be extraordinary. Palmer trains therapists how to develop private practices that not only thrive financially, but that provide excellence in clinical care through free private practice marketing trainings, the Business School Bootcamp for therapists, and free study group for licensing exams for pre-licensed therapists.


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APA Reference
Palmer, M. (2019). Starting a Counseling Practice Part 7: Creating a GOOD Referral Base. Psych Central. Retrieved on June 4, 2020, from