How to Start a Mental Health Agency: A Quick Guide

Is opening your own mental health agency something you’ve always dreamed about? Getting started can feel intimidating but if it’s something you’re passionate about it’s worth the time and effort. Opening a mental health agency can be a challenge, but you can start a thriving, needed mental health agency in your community.

The Mental Health Industry in the United States

Mental health is big business in the United States. Mental health accounts for 15,000 agencies and practices and more than $20 billion in annual revenue in the United States, and those numbers keep growing. While most people don’t think of mental health as a business, the demand for mental health counseling, substance abuse recovery programs and psycho-pharmaceuticals has created a growing industry. The impact of the Covid pandemic on the industry is still being measured but it’s likely that we will continue to see sharp growth in the industry.

How to Start a Mental Health Agency

Often when a person wants to start a mental health agency, it’s because they want to help people. While this is an incredibly worthy and important goal, it’s also important to strategically plan and to view yourself as an entrepreneur. To grow as an entrepreneur or business owner, check out Gaebler’s resources for becoming an entrepreneur and incorporate some of their tips into starting your agency.

You should also do the following before starting your agency:

Create a Business Plan

Your mental health agency’s business plan should be unique to your vision for your agency.

  • Mission Statement: Your mental health agency’s reason for serving the community. Be specific about who you’re going to serve. You can’t be all things for all people.
  • Goals & Objectives: A list of ideals for success that will guide your agency and help make decisions.
  • Action Plan: Specific benchmarks that help create your business environment, understand demographics and make quantitative estimates.

Research Other Mental Health Agencies in Your Community

Understand who the other agencies are in your community. Find out if they’re able to meet the needs of the community or if there are needs that are unmet. Network with CEO’s, directors, and therapists so you can learn about their perspective on the industry and where there might be opportunity to grow. Volunteer in an agency if possible so you can learn more about how an agency runs.

Apply for state and local certifications

To open a mental health agency, you have to have the proper certifications from the state, county and city you’re in. If you aren’t currently certified, research what’s needed in your community and apply to get certified. If you are currently or have been certified in the past, make sure your certification(s) are up to date. You may need to attend classes through the county in order to be fully certified.

Consider Becoming a Contract Provider

Depending on the state and county where your agency is located, you may be eligible to become a contract provider. Contract providers provide specific mental health services to those in need and are reimbursed by the county or state for those services. You can be contracted to provide very specific types of services like substance abuse counseling, helping people experiencing homelessness or helping women who are victims of domestic violence. The application process to become a contract provider can be extensive but can help to grow your agency and create the ability to help those who are very most in need.

If you’re a Los Angeles County mental health agency, visit the LADMH website for more information on how to become a contract provider.

Join Mental Health Organizations

Joining mental health organizations is a great way to give your agency legitimacy and get referrals for potential clients who are looking for help. Two national organizations to consider are Mental Health America and National Alliance for Mental Illness (NAMI). There are also a variety of state and local organizations depending on where you’re located.

Exym and Mental Health Agencies

Starting a new mental health agency can be a challenge but if it’s something you’re passionate about it’s absolutely worth it! Once you start your agency, you may need EHR software for progress notes, billing, telehealth sessions and tracking compliance and documentation. Consider Exym, the leading EHR software in California. If you’d like to learn more, fill out our form here.