There are several ways to organize a private practice.  This section describes the most common types for educational therapy and offers some considerations in deciding on what works best for you.  Since there are different options and rules depending on the city, state, or country you are in, please recognize that this is only a list of common types, not all types.  As you consider the type of business structures, AET recommends that you consult an accountant and/or attorney to understand the reporting and tax implications of your decision.

For-Profit/Non-Profit

One critical decision is whether you are going to be a for-profit or non-profit organization.  A for-profit organization is organized for the purpose of making a profit.  A non-profit organization is organized to provide services or work that will benefit the public.  A non-profit can collect donations and earn revenues, but any profit must be invested back into the organization or donated out to benefit the public.  In a non-profit, the educational therapist typically will be an employee paid out of the earnings. 

Types of For-Profit Business

Once you decide on a for-profit business, there are several different ways to organize your business.  They include sole proprietor, S-corporation, limited liability corporation, and more.  The website link below describes the different types of business structures available and some considerations in choosing one over the others.  Some states have restrictions on who can be in some types of business.  For example, in some states only licensed professionals can be organized in a professional organization.  In this example, an educational therapist cannot be an owner in a professional corporation unless they hold a license in another field such as psychology or speech and language pathology.  This website offers a brief summary of business types for you to review.

SBA.gov Website

There are costs, requirements, and benefits to each type of business, and what is right for you will depend on your financial circumstances, other income your family may have, your risk tolerance, what state you live in, and your tax situation.  It is important to know that your initial decision is not carved in stone.  If you start out as a sole proprietorship and your business grows to the point that you need a different structure, you can change it.  When deciding on the type of business you will start, it is imperative that you consult a professional accountant and/or attorney to receive the most pertinent information as it relates to your country, state, and/or city.

Business License Requirements

Many countries, states, and cities require a general business license, and many cities require a business license in order to do business within the city footprint.  The cost of the license will vary depending on your city, state, and country.  You need to determine what sort of business license is required before you begin to operate.  If a license is required, be sure to allow adequate time to apply for and receive it before beginning to see clients.