The Costs of Starting an OT Private Pay Practice

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There is a perception that starting an OT Private Pay Practice will be very expensive. However, this doesn't have to be the case. There are many expenses associated with starting a business that just simply can be delayed or avoided all together when you are starting your OT Private Pay Practice.  Learn the 8 most common expenses you will encounter when starting your OT Private Pay Practice.


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In this video, Doug Vestal, Ph.D., shares the 8 most common expenses associated with starting an OT Private Pay Practice and how much they cost. Additionally, starting on the side or part-time allows you to keep your expenses low while you are building your caseload.


This video is not intended as professional or legal advice. Be sure to seek the services of a professional and understand the risks you are undertaking.


Are you worried about how much money it costs to start an OT private pay practice?

Then, stick around because I’m going to breakdown the 8 most common expenses with staring an ot private pay practice.  And I’m going to show you that there is a way of starting your practice that is much cheaper than you probably thought.

Hi – I’m Doug Vestal and I help OTs just like you start and grow thriving private pay practices.  My wife and I founded our own successful OT private pay practice in NYC in 2014.  And I make these videos to help you achieve success even quicker.

Alright – let’s jump right into the start up expenses associated with starting your OT private pay practice.

If you go to google and type in “expenses with starting an OT private pay practice” then you are going to get a list of about 8 things that are:


  1. Business registration and permits
  2. Rent
  3. Equipment
  4. Insurance
  5. Supplies
  6. Marketing
  7. Staff
  8. Accounting


And unfortunately, a lot of people stop right here because they see this list and start to get overwhelmed. 

But here’s the thing – there is a big difference between a generic list on the internet and what you actually need to consider in practice.

So, let’s break down these 8 common expenses to a.) put some actual dollars against them so you can see what it would cost and b.) critically look at these categories because depending upon the way you start you aren’t going to incur all these expenses at all.

The way I recommend you start your OT private pay practice is on the side.  And invest in your practice as you start to see clients and you are generating revenue to put back into the business. 

I believe this is the most straightforward way to sensibly start your practice.

Alright, the first expense is Business registration and permits.  Before you see a client in your business you need to make sure you are legit from a business perspective.  That means forming an actual business entity.  This could be an LLC or PLLC.   Now, there are online sites who do this for you and there’s also lawyers who will do it for you. 

But, you can also do this yourself in your state.  You just have to follow the process your state requires and pay the fees.  This is the cheapest option.

The fees you pay will depend upon the state you are in.  They range from $40 – 500 and the average state fee is $132 for 2023.

Now, the downside to doing it yourself is it takes more time and you have to be the type of detailed person who follows the procedures laid out by your state.

The alternative is to use an online service which will charge you a flat fee of a few hundred dollars in addition to the state fee.

But you can totally do it yourself.  So, let’s put in $132 for the business entity.


The second big expense is rent.  Now, I do not recommend you go out and sign a huge lease on a great office space.  In my opinion that is a path to financial ruin.

Instead, like I said in the beginning I always recommend you start on the side.  Start seeing clients in the evening or the weekend while you keep your full-time job.

Get your OT practice out in your community and start building a case-load.

Drop down to 4 days a week and see clients 1 day a week.

You don’t need a huge space with all the bells and whistles.  If your type of OT practice is suited to seeing clients in their home then you can totally eliminate any expenses related to rent.

If that isn’t feasible then find an allied practitioner in your community that has space for rent.  You can rent a room in their space and either pay each time you use it or strike a deal where you have it on a certain day of the week.

You get flexibility in terms of leases and reduce your burden. 

I’ve had a ton of my students do this and they pay anywhere from $200 - $350 per month renting a room one day a week.

But, the good news about rent is this is one of those expenses that you can set up as only  occurring once you have clients.

So what I’d recommend if you are being really cost conscious is to get yourself out there, start building connections, start your marketing plan and build interest.  And then, only start renting a room one day a week once you have paying clients.  This way your rent is offset by the clients you are seeing.

So I’m going to put a $0 in this category because you absolutely can see clients in their home to start or build up an interest list before you ever see a client in an office.

The 3rd expense you’ll hear talked about is Equipment.  But I am going to put this expense at 0.  And the reason for this is because you aren’t building this big office environment from the very beginning.

When you get started and you are seeing your first 10 clients you don’t need a huge amount of equipment.  In fact, you probably have all the props and “equipment” already to see your first 10 clients.

It is so easy to overcomplicate things but I would stress here that what you have 5 years into your practice isn’t what you need 5 days into your practice.

With a little creative thinking and planning you can keep this expense in the very beginning to the bare minimum.

You really have to ask yourself, if you absolutely, 100% need it and if it will really make a difference.

I’ll give you an example from our private pay practice in NYC.  We did house-calls so we could see new moms in their environment.

Now, it would have been very easy to convince ourselves that we needed to bring a table with us so that we had a dedicated space where the Mom could lay if we had to do any hands-on work.

But that would have been a couple of hundred bucks and we’d have to lug it around on the subway.

So, we dispensed with the idea of bringing our own table and we turned it into something very OT: we used their natural surroundings to do our work.

Think creatively in this category and give yourself permission to grow into it as your client caseload grows.  You absolutely don’t need everything at once.

The 4th common expense is insurance.  And this is absolutely vital before you see your first client in your business.  But, it doesn’t cost that much to obtain insurance.  We paid about $200/year for ours.  There are tons of providers out there specializing in the type of insurance you need.  So shop around and don’t skip this important step.


The 5th common expense is supplies.  This is everything from towels to paper and pens.  But remember you don’t have to have something that is completely stocked from the very beginning.  You are growing as your client visits increase.  So really, the bulk of this is incurred as you operate your practice, not as an upfront cost.  I wouldn’t put more than $100 in this category in the beginning.


The 6th common expense is marketing.  Marketing is incredibly important because it is through marketing that you generate the interest in your practice so your first clients find you. 

This is definitely not a category you can delay.  So you do want to invest in this category.  Notice I didn’t say expense.  Your marketing is an investment in your OT practice because you literally get that money back in terms of potential clients calling you and booking.


At the same time, you can be smart with how you spend your marketing dollars.  There are two important pieces of marketing you can create right away.  The first is a “rack-card” and the second is a tri-fold brochure.

The rack-card is a little like an expanded business card in that you have a little more space to talk about the services in your OT Practice and use language that appeals to your ideal client.


The tri-fold brochure educates your ideal client on a problem that you help them solve.  So think about what your ideal client is struggling with and think about what content you can create that helps them with this problem.  This could be tips, tricks, exercises, mindfulness exercises, resources they should consider, a check-list to help them identify, really you name it.  And you turn this into an educational based tri-fold brochure.

You can design this all yourself in Canva and then spend $300 on an online printing service like Vistaprint to have them professionally printed and delivered to you.

This way when you meet with potential referral sources or give community workshops you have 2 concrete, tangible, and helpful things to leave with them.


The 7th common expense category is staffing.  But we are going to put a big fat 0 right next to this because you aren’t going to hire right away when you are starting on the side and seeing clients.  There is no need to go out and hire someone when you should be focusing your efforts on attracting clients and providing amazing care to them.  Let your caseload build and your waiting list grow before you ever hire.


The 8th and last common expense is accounting services.  Unless you enjoy handling your own taxes and reading up on the newest requirements then hiring a CPA is definitely worth the cost.  They can be instrumental in reviewing the financials of your OT practice and making sure you are getting the most out of your practice.  In the beginning you won’t need a lot from them.  But as you grow you’ll want to lean on them more and more.

The costs for CPAs has a wide spectrum.  That’s why I’d recommend you ask for recommendations from other small businesses in your area. 

And then I would reach out to a couple and interview them yourself.  Explain your situation.  You are just starting and in the first year you won’t have complicated returns to file.  You likely won’t have employees you need to pay.

You will likely be one of their simplest and easiest clients.  And then ask them what they will charge you to handle you in the first year of business.  Expect to pay anywhere from $300 - $700 but consider it money well spent.

And remember, this is money that is coming out of seeing clients.  This isn’t a huge, fixed, start up expense.  This is incurred essentially after you start and are building your caseload, seeing clients and generating revenue.

Now, your particular circumstance will differ of course.

For instance, the state filling fees depend upon your actual state.  Also, you may decide you don’t want to do it DIY and so you pay someone to help you. 

Or you do decide to invest upfront in renting a room one day a week or buying some initial equipment.

So this is really the floor or the bare minimum on the startup costs.

Some people do end up spending a lot more than this.  Sometimes if you ask someone how much it costs it is like asking the question “how long is a piece of string.”

But, what I’ve found is that people in general overspend when they go about starting their practice.  They are really excited about it, feel this pressure to be perceived as very legitimate and so expenses have a way of getting out of hand.

So what I would encourage you to do is set a budget for these items.  Get crystal clear on each category the money you are willing to spend.  And ask yourself a couple of critical questions along the way.

  • Is this something I have to incur right now or is there an alternative? Can I delay this expense by 6 months or 1 year?  Or can I set a plan where I will only purchase this piece of equipment after I’ve generated say $5,000 in revenue?
  • Really ask yourself if this expense is something that is going to bring in new clients? Put it through that filter to make sure you are being intentional about spending money.


Setting up an OT practice is very different than other businesses.  Think about a dental office?  That dentist has to rent a building, spend 100s of thousands of dollars on dental equipment, hire a front desk, hire dental hygienist all before the dentist ever sees their first patient. 

But with OT, you have this amazing opportunity to really just start seeing clients without all that initial upfront costs.  Your business model is totally different than a lot of other industries.

So embrace that mentality and philosophy when starting your practice and you’ll be able to keep your expenses down.