Common Frustrations for Therapists Working as Employees, Contractors and Entrepreneurs
It is important to understand your personality, the needs of your family and your professional goals as you make decisions about your career path. Not matter which path you take, you will encounter frustrations.
Frustrations of Being an Employed Therapist
Working as an employed therapist comes with frustrations that can impact your job satisfaction and overall well-being. From limited control over your caseload to dealing with bureaucratic policies and high workloads, being an employee often means navigating challenges that are outside of your control.
Limited Control Over Caseload, Scheduling, and Treatment Approaches
As an employee, you may not have much say in your caseload or schedule. Your employer typically assigns clients based on availability and organizational needs, rather than your preferences or areas of expertise. This can lead to situations where you’re working with clients who may not be the best fit for your skills or therapeutic approach. Additionally, your schedule is often dictated by the agency or institution you work for, which can mean long hours, back-to-back sessions, or limited flexibility to adjust your workload.
Beyond scheduling and caseload, you might also feel restricted in how you approach therapy. Some agencies have strict guidelines about treatment modalities, session structures, or documentation requirements. If you prefer a more creative or integrative approach to therapy, these constraints can be frustrating and limit your ability to provide the best care for your clients.
Bureaucratic Policies and Administrative Burdens
Another common frustration of being an employed therapist is dealing with bureaucracy and administrative tasks. Many therapy positions require extensive documentation and compliance with agency protocols. While these policies exist for a reason, they can often feel overwhelming and time-consuming.
If you work in a hospital, health center or nonprofit organization, you may also experience red tape when trying to implement new ideas or advocate for your clients. Decisions about client care, resources, or program changes often need to go through multiple levels of approval, which can slow down the process and limit your ability to act independently.
Potential for Workplace Burnout Due to High Caseload Demands
Many employed therapists struggle with heavy caseloads and unrealistic productivity expectations, which can contribute to burnout. In some settings, therapists are expected to see a high number of clients per day, leaving little time for self-care, supervision, or even proper documentation. Over time, this constant demand can lead to emotional exhaustion, stress, and reduced job satisfaction.
Additionally, many therapists feel pressure to meet quotas or productivity goals that prioritize numbers over client well-being. This can create ethical dilemmas and make it difficult to provide the level of care you believe is necessary. If your organization doesn’t support a healthy work-life balance, burnout can become a serious issue, impacting both your personal well-being and your effectiveness as a therapist.
Frustrations of Being a Contract Therapist
Working as a contract therapist also comes with its fair share of frustrations. Unlike employees, you don’t have guaranteed work, paid time off, or employer-sponsored benefits. You must also take on the responsibility of marketing yourself and maintaining a steady client base.
Inconsistent Income and Difficulty Securing Steady Work
One of the biggest frustrations of contract work is inconsistent income. Since you are only paid for the clients you see, your earnings can fluctuate from month to month. If clients cancel, reschedule, or drop out of therapy altogether, your income takes a direct hit. Additionally, securing contracts with agencies, private practices, or telepractice platforms is not always a straightforward process. There’s no guarantee that a contract will last long-term, which means you may have to continuously seek new work opportunities.
This inconsistency can make it difficult to budget and plan for expenses. Unlike employees who receive a predictable salary, you must build financial reserves and plan for slow periods.
No Paid Time Off or Employer-Sponsored Benefits
Another major downside of contract work is the lack of paid time off and benefits. As a contractor, you don’t receive employer-sponsored health insurance, retirement contributions, or paid sick days. If you take a vacation or need time off due to illness, you don’t get paid—which can add stress when trying to maintain a healthy work-life balance.
Constant Need for Self-Promotion and Networking
Unlike employees who are assigned clients by their workplace, contractors must actively promote themselves and network to maintain a full caseload. This means consistently marketing your services, building referral relationships, and staying visible in professional communities. If you don’t put in the effort to attract clients, your income can quickly decline.
For some therapists, self-promotion feels uncomfortable or time-consuming. If you don’t enjoy networking or marketing, contract work can feel like an ongoing hustle to keep your schedule full.
Frustrations of Being a Private Practice Therapist
Private practice also comes with unique frustrations that many therapists don’t anticipate. From handling administrative tasks to dealing with financial unpredictability and professional isolation, being your own boss isn’t always easy.
Managing Administrative Tasks (Billing, Insurance Claims, Marketing)
One of the biggest frustrations of running a private practice is the sheer volume of administrative tasks you have to handle. Unlike employed therapists who have billing departments and administrative support, private practice owners are responsible for everything—scheduling, billing, insurance claims, bookkeeping, and marketing. When you rely on third party payers to provide funding, navigating complex reimbursement processes and dealing with claim denials can be especially frustrating and time-consuming.
In addition, you must continuously market your practice to attract new clients, which can be overwhelming if you’re not experienced in business or advertising. Many therapists find themselves spending just as much time on administrative work as they do in therapy sessions.
Financial Unpredictability, Especially in the Early Stages
Unlike a salaried job, private practice comes with no guaranteed income. This is particularly stressful in the early stages when you’re still building your client base. Some months, you may have a full caseload, while others might bring unexpected cancellations or slow client flow. Seasonal fluctuations—such as lower client engagement during holidays or summer months—can also impact your income.
Additionally, you must cover all business expenses, including rent, malpractice insurance, software subscriptions, and marketing. If you don’t plan accordingly, these costs can quickly add up and eat into your profits. Many therapists in private practice set aside savings, diversify their income with workshops or consultation services, and create a financial buffer to help manage these ups and downs.
Isolation from Colleagues Without a Structured Work Environment
Another challenge of private practice is professional isolation. Unlike working in an agency or hospital, where you have colleagues to collaborate with, private practice can feel lonely. You don’t have built-in supervision, team meetings, or informal support from coworkers, which can make the work feel isolating—especially when dealing with difficult cases.
Without a structured work environment, it’s easy to feel disconnected from the professional community and experience burnout. To combat this, many therapists in private practice join peer consultation groups, attend professional networking events, or rent office space in shared therapy suites to stay connected. Prioritizing professional relationships and supervision can help you maintain support and avoid the emotional strain of working alone.
Managing Frustrations and Finding Balance
Despite these frustrations, private practice can still be an incredibly fulfilling career path. Developing strong business skills and staying connected with colleagues can help you can create a practice that is both sustainable and rewarding.
Differences in the Financial Risks for Employees, Contractors and Entrepreneurs
Financial Risks of Being an Employed Therapist
Choosing to work as an employed therapist comes with many benefits, such as stability, benefits, and administrative support. However, it’s important to recognize the financial risks that come with this career path. Unlike self-employment, where your income can grow based on the number of clients you take on, being an employee means your earning potential is largely determined by your employer. Understanding these financial limitations can help you make informed decisions about your career and financial future.
Limited Earning Potential
One of the biggest financial risks of being an employed therapist is limited earning potential. While self-employed therapists can increase their rates, take on more clients, or expand their services, employees are typically paid a set salary or hourly wage. Even if you work more hours, your income is restricted by your contract and company policies. Over time, this can become frustrating, especially if you feel that your skills and experience warrant higher pay.
Dependence on Employer Decisions
As an employee, your salary increases and job security are in your employer’s hands. Raises and promotions are often tied to budgets, performance reviews, and organizational policies. Even if you excel in your role, you may not have much control over when or how your salary increases. Some organizations offer annual cost-of-living raises, while others may freeze wages due to financial constraints.
Vulnerability to Budget Cuts and Restructuring
Another financial risk of employment is job instability due to budget cuts or restructuring. Many therapy positions are funded by grants, insurance reimbursements, or government programs, which can change over time. If an organization experiences financial difficulties, they may reduce hours, cut benefits, or even lay off staff. Even in a secure job, there’s always the possibility that your employer could make changes that affect your income or workload. This unpredictability can create stress.
Financial Risks of Being a Contract Therapist
Working as a contract therapist offers flexibility and higher earning potential, but it also comes with financial risks that employees don’t have to worry about. Unlike salaried positions, contract work doesn’t come with a guaranteed salary, employer benefits, or job security. If you’re considering becoming a contractor, it’s essential to understand these financial risks.
No Guaranteed Pay: Income Fluctuates Based on Client Load
One of the biggest financial risks of contracting is that your income is entirely dependent on your client load. Since you’re only paid for the sessions you complete, slow periods—whether due to seasonal trends, cancellations, or lower demand—can significantly impact your earnings. Unlike an employee who receives a salary, you must prepare for fluctuations in income. Some months may be highly profitable, while others may fall short of your financial needs. To manage this uncertainty, having a financial cushion and budgeting carefully are crucial.
Responsible for Self-Employment Taxes and Business Expenses
As a contractor, you’re also responsible for self-employment taxes, which are higher than those of traditional employees. While employees have taxes automatically deducted from their pay, contractors must set aside money for taxes, which can be around 15% or more of your earnings. If you don’t plan properly, tax season can be a stressful financial burden.
In addition to taxes, you must cover all business-related expenses. This includes liability insurance, continuing education, professional memberships, office supplies, and even rent if you work in a physical office. Many contractors also invest in marketing and administrative tools to manage their practice efficiently. These costs add up quickly, so keeping track of expenses and planning for deductions is essential for financial success.
Potential for Contract Termination Without Long-Term Job Security
Another major financial risk of contract work is the lack of long-term job security. Most contract positions do not guarantee steady work, and an organization can terminate your contract with little notice. If an agency or private practice you work with experiences financial difficulties, shifts its focus, or restructures its team, you may suddenly find yourself without income. This unpredictability can make it challenging to plan for long-term financial stability.
To mitigate this risk, many contractors diversify their income sources by working with multiple agencies, private practices, or telehealth platforms. Having different revenue streams reduces the impact of losing one contract. Building a strong professional network and maintaining a steady client base can also help you stay financially secure even if one opportunity disappears.
Financial Risks of Running a Private Therapy Practice
Owning a private therapy practice can be incredibly rewarding, offering full autonomy and the highest earning potential in the long run. However, with that freedom come financial risks that employees and contractors don’t face. As a private practice owner, you are responsible for generating your own income, managing business expenses, and navigating financial fluctuations. Understanding these risks and preparing for them can help you build a stable and sustainable practice.
No Guaranteed Income: You Must Generate Your Own Clients
Private practice owners must consistently attract clients to maintain income. In the early stages, this can be particularly challenging as you work to build a reputation and client base. There may be months when your schedule is full and others when referrals slow down. If you don’t have a solid marketing plan or referral network, financial instability can become a major concern.
Responsible for Business Expenses: Rent, Software, and Marketing
Running a private practice means covering all business expenses yourself, including office rent, therapy software, website maintenance, and marketing costs. These expenses can add up quickly, especially if you operate out of a physical office rather than a home-based or virtual setting. Even online practices require investment in scheduling software, telehealth platforms, and advertising to attract clients. Unlike an employee who benefits from an employer’s resources, you must budget carefully to ensure your practice remains financially sustainable.
Risk of Client Cancellations and Seasonal Income Fluctuations
Another financial risk is client cancellations and seasonal slowdowns. Some months, particularly during holidays or summer, may see fewer clients booking sessions, leading to a drop in income. Additionally, last-minute cancellations and no-shows can disrupt cash flow, especially if you don’t have a clear cancellation policy in place. To protect yourself financially, consider diversifying your income streams through workshops, group therapy, or digital products. Having a financial reserve can also help you weather slow periods.
The Reward: Full Autonomy Over Your Practice
Despite these financial risks, one of the greatest advantages of private practice ownership is full autonomy. You have the freedom to set your own fees, choose your ideal clients, and design your therapeutic approach without restrictions from an employer. You have the power to shape your practice in a way that aligns with your values and passions. This level of control allows for deep professional fulfillment and the opportunity to create a business that reflects your vision.
Managing Financial Risks and Thriving in Private Practice
While private practice carries financial risks, there are strategies to make it more secure. Learning basic business skills, tracking expenses, and seeking mentorship from experienced private practice owners can provide valuable insights. By taking proactive steps, you can minimize financial stress and focus on growing a fulfilling and profitable practice.
