Employee, Contractor, or Private Practitioner?

Written by Neva Quantz

We are going to start right at the basics.
Are you going to become an Employee? A Contractor? Or a Private Practitioner?

Each one of these scenarios has pros and cons. Whether you view something as a pro or a con will largely depend on your personal view of work and money.

Employee:

Some of the Pros are:

The business system is already in place, including appropriate office space and administration.
Your Income is guaranteed whether you see clients or not, and you will receive a paycheck every two weeks or monthly.
You will have a ready-made client base at your disposal.
Your employer may cover your Association Memberships and Professional Liability Insurance costs.

Some Cons are:

Type of employment is usually highly dependent on your degree. The higher the degree the better the package.
Income is usually lower (you start out at a basic income which raises until you reach the company’s designated ceiling).
Expectations are high, especially on your client load and keeping the available appointments full.
You will be paying Income Tax at the highest possible rate with few write offs.
You may still be responsible for your Association Memberships and Professional Liability Insurance costs.

Contractor:

Some of the Pros:

The business system may already be in place, including appropriate office space and administration.
You have the potential to make good money if you are a good therapist and you have secured a good contract.
There are some tax advantages (Know your local, state/provincial and federal laws on contracting).
You may have a ready-made client base at your disposal.

Some Cons are:

You have the potential to make poor money if you are a poor therapist and/or you have secured a poor contract.
You are responsible for your Association Memberships and Professional Liability Insurance costs.
You may not have a ready-made client base at your disposal.
The business system may not already be in place, including appropriate office space and administration.
You may find yourself responsible for some or all of the administration and office costs.

Private Practitioner:

Some Pros are:

You are responsible for developing the Business System.
You are your own boss.
Your income is entirely dependent on your competence and skills as a therapist.
You have the opportunity to develop a world class practice.
There are many tax advantages.
You assume all the risks and benefits.

Some Cons:

You are responsible for developing the Business System.
You are your own boss.
Your income is entirely dependent on your competence and skills as a therapist.
You will have to build your own client base.
You assume all the risks and benefits.

In order to fully assess what your desire is in this regard you need to answer the following questions in a thoughtful and realistic manner. I encourage you to answer them in full and in writing so that a year or more from now you can accurately reassess your position.

Why did I become a therapist?
What areas of therapy am I passionate about?
What do I expect to receive financially from providing therapy?.
How do I view my current financial resources?
Do I view therapy as an “act of service” or “as a business”?

Take your time assessing and researching your answers. Know yourself.
If you do a thorough job you will be very comfortable with your choice – Employee, Contractor, or Private Practitioner.

Next Month:
If your choice is to become a Private Practitioner we will begin the enlightening process of Writing a Business Plan.

Best Regards,
Neva

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