Start a Virtual Counseling Business by following these 10 steps:
- Plan your Virtual Counseling Business
- Form your Virtual Counseling Business into a Legal Entity
- Register your Virtual Counseling Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Virtual Counseling Business
- Get the Necessary Permits & Licenses for your Virtual Counseling Business
- Get Virtual Counseling Business Insurance
- Define your Virtual Counseling Business Brand
- Create your Virtual Counseling Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. 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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
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.
STEP 2: Form a legal entity
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.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
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.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a Virtual Counseling Business
Despite the obstacles mentioned above, you can successfully advertise your service to clients of both genders. Some men have a greater openness to counseling if it's completely private. Your service may appeal to them when you use different promotional language that emphasizes confidentiality and leaves out the word "therapy."
Consider paying for a listing in a respected database of online counselors, such as GoodTherapy.org. Try to exchange referrals with fellow professionals who have related but different specialties. For instance, some people with addictions might benefit from marriage counseling (and vice versa). You can also attract customers by writing a newspaper column about your topic of expertise.
How to keep customers coming back
To gain new clients, emphasize your credentials as well as approachability. You should appear qualified but not intimidating. Think about offering a discounted or complimentary first session. This will give the customer a risk-free opportunity to evaluate your service.
You can retain clients by maintaining a high level of quality. Don't overwork yourself; people will notice the difference if you're exhausted, sick, or distracted. It's better to put off working until you have enough energy to concentrate and provide helpful responses. If customers stop scheduling appointments, give them some time before asking why. Try using a different contact method.
Privacy holds great importance for many clients; always treat it as a high priority. Send mail in security envelopes with a return address that doesn't reveal the nature of your business. Ask to speak with the client when you initiate a phone call and use a corded telephone. Don't rely on standard unencrypted email or insecure public WiFi connections.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Virtual Counseling Business in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a Virtual Counseling Business?
Thoroughly screen new clients before sending any bills or arranging long sessions. Make sure you truly have the ability to help them and meet their specific needs. If you don't, refer the customer to a better-qualified specialist.
Carefully review each insurance company's rules prior to submitting a claim. Do this as soon as possible; it can take time to get paid, and the insurer may request further details. Try to verify that you'll receive payment before completing multiple sessions.
It often becomes harder to follow laws and insurance rules when serving out-of-state clients. Focus on attracting customers who live in your region. If a nearby state has a much larger population, consider moving there before starting a practice.
How and when to build a team
It's not essential to hire employees. You'll probably find it easier to maintain confidentiality without a staff. Nevertheless, a billing specialist could prevent payment delays and help you focus on the things you do best. These advantages become especially significant when you need to collect money from multiple insurers. Billing experts often request a fraction of your income rather than a wage or salary. If you attract more customers than you can serve, you could also hire counselors as contractors. These professionals receive around 60% to 70% of the fees paid by clients.