Financial planning for a counselling practice

A counselling practice is a business with unusually low overheads and unusually lumpy income. That combination is forgiving if you plan for it and unkind if you don’t. The aim isn’t spreadsheets for their own sake. It’s knowing your practice can carry you through a quiet August.

Know your real costs

Room hire, membership, insurance, supervision, software, marketing — write down everything, including the annual bills that are easy to forget. Money Helper’s budget planner is a free place to start. You can’t price sensibly until you know what it costs to keep the lights on.

Set fees you can defend

Price on your training, your focus and what the local market bears — not on what you’d feel comfortable charging a friend. Undercharging is the most common early mistake, and it’s a hard one to undo, because raising fees on existing clients is awkward. Start nearer where you actually mean to be.

Put tax aside as you earn it

Self-employment tax catches anyone who spends the gross. A simple habit fixes it: move 20–30% of every payment into a separate account the moment it lands, so January’s bill is money you never counted as yours. HMRC’s Self Assessment guidance helps you size the percentage.

Build a buffer

Aim for three to six months of running costs in reserve. Therapy income dips — over summer, around Christmas, whenever a cluster of clients ends at once. A buffer is the difference between a slow month and a genuine crisis.

The numbers worth watching

You don’t need management accounts. A few figures tell you most of what matters:

• What it costs to win a client — roughly, marketing spend divided by the clients it brought in. If a directory listing produces steady enquiries cheaply, lean there.
• What a client is worth over time — average number of sessions times your fee. It reframes a single enquiry as a relationship rather than a one-off.
• What’s left after costs — track income against outgoings each month, so a weak quarter is something you saw coming, not something you discover.

Xero or QuickBooks will automate most of this; for a small caseload, a well-kept spreadsheet does the same job.

Build these habits while the numbers are small and the stakes are low. They scale with you — and they’re far harder to install once the practice is busy.