How to Start a Virtual Counseling Business

Start a Virtual Counseling Business by following these 10 steps:

1. Plan your Virtual Counseling Business
2. Form your Virtual Counseling Business into a Legal Entity
3. Register your Virtual Counseling Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Virtual Counseling Business
6. Get the Necessary Permits & Licenses for your Virtual Counseling Business
7. Get Virtual Counseling Business Insurance
8. Define your Virtual Counseling Business Brand
9. Create your Virtual Counseling Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your Virtual Counseling Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a Virtual Counseling Business?

You may need to upgrade equipment or make other changes to your home office. Privacy is crucial; you ought to have a keyed door lock and locking file cabinet. Suitable two-drawer cabinets start at under $80. New office equipment can cost hundreds or thousands of dollars depending on the features, capacity, quality, and materials. If you subscribe to an office supply store's email list, you'll probably receive valuable coupon codes. These retailers also have free reward programs, but they're really only worthwhile when you plan to spend at least $250 in one store.

Ensure that no one can easily hear through your room's windows or walls. You might have to replace a drafty single-pane window. Soundproofing or insulation could also prove necessary. Fortunately, some of these enhancements reduce heating and cooling costs. You may need financing to afford a major project. Home improvement loans have interest rates ranging from 4.5% to 36%, according to NerdWallet. You'll pay a lower rate if you have a high credit score.

What are the ongoing expenses for a Virtual Counseling Business?

You will need to pay for malpractice insurance, marketing, and internet access. Anti-virus software helps maintain confidentiality; it only costs small businesses around $35 to $85 per year. Services like Hushmail provide encrypted email and online forms at an annual cost of about $70. If you don't have a suitable office, you'll need to rent commercial space or a larger home.

Who is the target market?

Virtual counseling has become popular among military personnel, young people, and disabled individuals. Women undergo therapy more frequently than men, according to the American Psychological Association. While many men suffer from serious problems like addiction, anxiety, and depression, they find it harder to discuss emotions or reveal a need for help.

How does a Virtual Counseling Business make money?

Some clients directly pay for each session. Others purchase weekly or monthly memberships. Insurance companies and employee assistance programs frequently cover online counseling; you'll need to submit claims to them. Demand for this service may rise when inclement weather discourages outdoor activities and makes travel more difficult.

How much can you charge customers?

Some well-known services charge around $150 to $450 per month. People pay the highest rates for live interactions. A single session costs $75 to $180 for therapy and closer to $300 for psychiatry.

How much profit can a Virtual Counseling Business make?

This occupation has the potential to achieve a rather high profit margin. Unlike most businesses, it won't require you to travel, rent a building, or purchase many supplies. You can live in a rural or small-town location with low housing costs. Profits will differ depending on your specialty. Estimates vary widely; some sources indicate that you could earn a net income as high as $100,000 per year. This becomes easier to accomplish when you have mental health expertise.

How can you make your business more profitable?

Additional education could give you the credentials needed to serve higher-paying clients. However, this takes time and would probably result in substantial student loans. An alternative is to find ways to minimize expenses. For example, you can shop around for better deals on internet access. Customers who use the same company for a long period of time tend to pay higher rates. Your current provider might offer a discount if you inform them of a lower price you found elsewhere. The same strategy can help you save money on insurance, billing services, and advertising.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Virtual Counseling Business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

If you'd like to help other people improve their lives, this line of work may appeal to you. Virtual counseling proves desirable for busy parents and therapists who prefer living in rural areas. You need to communicate well, listen patiently, and have a willingness to discuss personal matters.

What happens during a typical day at a Virtual Counseling Business?

Counselors either participate in live discussions or respond to messages left by clients. They primarily have one-on-one meetings, but certain specialties like marital counseling involve multiple people. This profession also necessitates extensive paperwork. Billing tasks can become time-consuming and complicated.

What are some skills and experiences that will help you build a successful Virtual Counseling Business?

The necessary qualifications differ depending on your area of expertise. You'll probably need a bachelor's or master's degree. The Distance Credentialed Counselor certification isn't required but may prove beneficial. One way to get started is to read a book that introduces readers to this field, such as "Online Therapy: A Therapist's Guide to Expanding Your Practice."

What is the growth potential for a Virtual Counseling Business?

Online counseling had already begun to experience moderate growth when the COVID-19 pandemic triggered rapid expansion. Certain virtual therapy companies saw 30% to 80% growth in recent times. If you want to go beyond serving clients on your own, you could start a group practice or agency. California-based BetterHelp provides an example of large-scale expansion. It has more than 3,000 counselors who have assisted over 600,000 clients.