5 Mistakes Therapists Make When Closing Their Practice
Oct 06, 2024
Deciding to close your therapy practice isn’t just a business decision—it’s a significant personal and professional transition that can be both overwhelming and emotionally draining. Whether you’re closing your practice due to retirement, a career shift, or burnout, it’s essential to navigate this process with care and intentionality. However, without a clear plan, therapists often make mistakes that create unnecessary stress and legal complications.
In this post, I’ll walk you through five common mistakes therapists make when closing their practice and how you can avoid them to ensure a smooth and ethical transition.
1. Failing to Create a Detailed Closure Plan
Closing a practice is a multi-step process that involves more than just informing clients and staff. From canceling business licenses and insurance policies to managing digital records and notifying colleagues, having a plan is crucial. Many therapists jump into the closure without creating a comprehensive roadmap, which can lead to missed steps and legal oversights.
What to Do Instead:
Create a closure timeline that spans 3-6 months and outlines every step in the process. Break it down into categories: legal obligations, staff & client communications, financial closeout, and business dissolution. Having a clear timeline ensures that nothing is forgotten and gives you the confidence that each step is handled thoroughly.
2. Underestimating the Legal and Ethical Requirements
It’s easy to get caught up in the emotional side of closing your practice, but there are serious legal and ethical responsibilities involved. You need to follow state-specific guidelines, notify licensing boards, and ensure client records are handled according to HIPAA regulations. Missing these critical steps can lead to professional and legal consequences.
What to Do Instead:
Familiarize yourself with your state’s legal requirements for closing a therapy practice. Notify all relevant licensing bodies, handle client records securely, and document every step. Be sure to inform clients and your staff how they would go about requesting files in the future. Consider using a course or consulting with a legal professional to ensure compliance.
3. Not Providing Clients with a Transition Plan
One of the biggest mistakes therapists make is neglecting to develop a clear transition plan for their clients. Simply informing clients of your closure is not enough; they need guidance on how to proceed with their care. This is especially important for clients in the midst of treatment or those with complex needs.
What to Do Instead:
Create a transition plan that outlines referral options, provides resources, and details how you’ll support clients through this process. Prepare scripts and letters for each type of client (active, inactive, or those on a waitlist). This not only fulfills your ethical duty but also helps your clients feel cared for during a time of change.
4. Ignoring Financial and Business Closeout Tasks
It’s easy to overlook the financial and business aspects when you’re emotionally overwhelmed, but things like final payroll, business debts, and canceling insurance policies must be addressed. Many therapists get stuck when it comes to the financial closeout, leading to complications with taxes, unresolved debts, and outstanding payments.
What to Do Instead:
Work with an accountant or financial advisor to ensure all business accounts are reconciled and tax obligations are met. Cancel or transfer business licenses, liability insurance, and other professional accounts. A financial checklist can help keep everything organized.
5. Overlooking Self-Care and Emotional Closure
Therapists often focus so much on meeting legal and client obligations that they forget to take care of themselves during this process. The emotional toll of closing a practice is significant, involving grief, burnout, and identity shifts. Ignoring your own emotional needs can leave you feeling depleted and unable to move forward.
What to Do Instead:
Schedule time for reflection, self-care, and support. Consider working with a coach or therapist to process your own emotions around closing your practice. Create a ritual or a symbolic gesture to mark the end of this chapter and celebrate the impact your work has had.
Ready to Close Your Practice With Confidence and Peace of Mind?
If you’re feeling overwhelmed by the thought of closing your practice, you’re not alone. Download my free Therapy Practice Closure Checklist for a step-by-step guide to help you get organized, or check out my course, The Graceful Exit, for comprehensive support on every legal, financial, and emotional step of the way. For those who need extra support, check out my coaching options.
Created by:
Dawn Leprich-Graves, LCPC, LPC, PMH-C, ASDCS
Clinician, Coach and Connection Catalyst
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