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.
Therapy Contractor Pros and Cons: Flexibility, Earnings, and Independence
If you’re a therapist looking for more control over your career without taking on the full responsibility of running a private practice, working as an independent contractor might be the perfect middle ground. As a contractor, you provide therapy services to an organization, such as a private practice group, a mental health clinic, or an online therapy platform, but you’re not a traditional employee. This means you have more freedom to choose your work settings and caseload while still benefiting from some level of administrative support. However, contracting also comes with financial and business-related challenges that require careful consideration.
Advantages of Being a Contract Therapist
One of the biggest benefits of working as a contractor is the greater flexibility it offers. Unlike employees, who have set schedules determined by their employer, contractors often have more control over their hours, caseload, and even the type of clients they work with. This can be especially appealing if you want to create a work schedule that fits your lifestyle or balance multiple professional opportunities. You may also have the option to work in different settings, such as private practices, telehealth platforms, or wellness centers, allowing you to diversify your experience.
Another key advantage is the potential for higher earnings compared to salaried positions. As a contractor, you’re typically paid per session rather than receiving a fixed salary, which means your income can increase based on the number of clients you see. While you won’t have access to the same benefits as an employee, the ability to set higher fees or take on more clients can lead to greater financial growth over time. This makes contracting an attractive option for therapists who want more earning potential without the full burden of private practice ownership.
Contracting also provides a balance between independence and support. While you have more control over your professional decisions, you often still receive some administrative assistance from the organization you contract with. Many agencies handle marketing, client referrals, and billing, which can reduce the amount of business management you need to do. This allows you to develop professional independence while avoiding some of the more time-consuming tasks that come with running a fully independent practice.
Challenges of Being a Contract Therapist
Despite its advantages, working as a contractor comes with significant financial responsibilities, including managing your own taxes, health insurance, and retirement savings. Unlike employees, contractors do not receive benefits such as paid time off, medical insurance, or employer-sponsored retirement plans. This means you must budget carefully, set aside money for taxes, and secure your own healthcare and financial planning options. If you’re not prepared for these responsibilities, the financial uncertainty of contracting can be stressful.
Another challenge is that contracting requires strong business and organizational skills. Since you are technically self-employed, you must keep track of your income, expenses, and client load while ensuring you comply with legal and ethical requirements. Some therapists thrive in this environment, while others may find the additional administrative work overwhelming. If you’re considering contracting, developing strong time management and financial planning skills is essential.
Lastly, job security is lower compared to full-time employment. Since you are not an employee, your contract could be ended at any time, and client referrals are not always guaranteed. Your income may fluctuate depending on client demand, seasonal trends, or changes within the organization you work with. If you prefer a steady paycheck and guaranteed hours, contracting may feel too unpredictable.
Is Contracting the Right Choice for You?
Deciding to become a contract therapist depends on your career priorities. If you value flexibility, higher earning potential, and professional independence, contracting can be a rewarding path. However, if you prefer job security, stable benefits, and a structured work environment, employment may be a better fit. Understanding both the advantages and challenges will help you make the best decision for your professional growth and personal needs.
Therapy Entrepreneur Pros and Cons: Freedom, Growth, and Challenges
If you’ve ever dreamed of being an entrepreneur, becoming a private practice owner might be the perfect career path for you. Owning a practice gives you full control over your work, from setting your fees to choosing your clients and designing your services. It also offers the highest earning potential in the long run, making it an attractive option for therapists who want financial independence. However, with great freedom comes great responsibility—private practice ownership requires business skills, marketing strategies, and a willingness to take financial risks.
Advantages of Private Practice Ownership
One of the biggest advantages of owning a private practice is full control over your policies, fees, and client base. Unlike employed therapists, who must follow an organization’s guidelines, you get to shape your practice the way you want. You decide how many clients to see, which populations to serve, and what therapeutic approaches to use. This level of autonomy allows you to build a career that aligns with your values and passions.
Another key benefit is the highest earning potential in the long run. While it takes time to build a profitable practice, successful private practice owners can earn significantly more than salaried employees or contractors. Since you set your rates and control your caseload, you have the potential to maximize your income without limits imposed by an employer. Over time, as your client base grows and your reputation strengthens, your financial rewards can increase substantially.
Owning a practice also gives you the flexibility to implement unique therapeutic approaches and specialized services. If you have a passion for a niche area—such as trauma therapy, couples counseling, or mindfulness-based therapy—you have the freedom to structure your services around your expertise. You can also create workshops, group therapy sessions, or online programs to expand your reach and impact. This creative freedom is a major draw for therapists who want to practice in a way that feels authentic and fulfilling.
Additionally, private practice offers the opportunity for business growth. Once you establish a solid client base, you can expand your practice by hiring other therapists, offering supervision, or adding new services. Some therapists grow their practice into a full mental health clinic, increasing both their impact and revenue. If you’re entrepreneurial, private practice ownership can open the door to exciting business opportunities beyond one-on-one therapy.
Challenges of Private Practice Ownership
While private practice ownership is rewarding, it comes with significant upfront investment and financial risk. Starting a practice requires money for office space, licensing, insurance, marketing, and administrative software. It may take months or even years to build a steady client base, meaning you must be financially prepared for fluctuations in income. Unlike employees, who receive a stable paycheck, private practice owners must manage both their revenue and expenses carefully.
Another challenge is that running a practice requires business acumen, marketing strategies, and administrative skills. You’re not just a therapist—you’re also a business owner, responsible for attracting clients, managing finances, and keeping up with legal and ethical regulations. Many therapists find the business side of private practice overwhelming, especially if they lack training in entrepreneurship. Learning how to market yourself, handle bookkeeping, and manage administrative tasks is crucial for long-term success.
Finally, work-life balance can be difficult, especially in the early stages of private practice. Since you are responsible for every aspect of your business, it’s easy to work long hours trying to grow your client base and manage operations. Without proper boundaries, private practice owners risk burnout. However, with time and experience, you can create a schedule that supports both your professional and personal well-being.
Is Private Practice the Right Choice for You?
If you’re passionate about building something of your own and willing to navigate the challenges of entrepreneurship, private practice can be an incredibly rewarding career path. The key is to plan carefully, seek support, and develop both your clinical and business skills to create a practice that thrives.
Therapy Employee Pros and Cons: Stability, Benefits and Career Growth
If you’re considering a career as a therapist, one of the biggest decisions you’ll face is whether to work as an employee, independent contractor, or private practice owner. Each path offers unique advantages and challenges, and your choice will depend on your professional goals, financial needs, and preferred work style. Working as an employee provides stability, structured support, and benefits that many therapists find appealing. However, it also comes with limitations in flexibility and earning potential.
Advantages of Being an Employed Therapist
One of the biggest perks of working as an employee is the stable income and benefits that come with a salaried position. Unlike independent contractors or private practice owners who must generate their own client base, employed therapists receive steady pay. Many employers also offer health insurance, retirement plans, and paid time off, providing financial security and peace of mind. If you value consistency and predictable earnings, employment may be the ideal path for you.
Another significant advantage is the administrative and billing support provided by the employer. As an employee, you don’t have to worry about handling insurance claims, scheduling clients, or maintaining financial records—these responsibilities are managed by the organization. This allows you to focus on your primary role as a therapist, providing high-quality care without the stress of business management.
Employment also provides opportunities for professional development and supervision. Many organizations offer regular training, workshops, and access to experienced supervisors. If you’re working toward licensure, being in an employed position often means having built-in supervision, which can save you time and money. Even after licensure, being in a structured setting with colleagues and mentors can help you continue growing professionally.
Additionally, employment offers a predictable work schedule and lower financial risk. Unlike private practice, where income can fluctuate depending on client demand, an employee position typically provides a consistent workload and pay. You won’t have to worry about marketing yourself, handling cancellations, or experiencing seasonal income drops. If you prefer a structured work environment with reliable hours, employment can be a great fit.
Challenges of Being an Employed Therapist
While employment offers stability, it also comes with certain limitations in control over your schedule and client caseload. Your employer determines your hours, the number of clients you see, and, in many cases, the types of cases you handle. This lack of flexibility may not suit therapists who prefer autonomy in choosing their clients or setting their own pace.
Another downside is lower earning potential compared to private practice. While a salaried job provides financial security, it also means your income is capped. Private practice owners have the potential to set higher rates and take on more clients, leading to greater earnings over time. If maximizing your income is a top priority, employment may feel financially restrictive in the long run.
Lastly, some therapists find employment challenging because it offers less flexibility in therapeutic approaches and decision-making. Agencies, hospitals, and clinics often have strict protocols, documentation requirements, and guidelines for treatment. You may not have the freedom to use certain modalities, tailor sessions entirely to your preferences, or make independent clinical decisions. If you prefer full creative control over your therapeutic approach, employment might feel limiting.
Is Employment the Right Choice for You?
Choosing to work as an employee depends on your priorities. If you value stability, benefits, and structured support, this career path may be a great fit. However, if flexibility, autonomy, and higher earning potential are more important to you, contracting or private practice might be better options. Ultimately, the best decision is the one that aligns with your long-term professional and personal goals.
