How to Start Your Own Nurse Practitioner Private Practice

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A nurse practitioner consults with a patient in an office.Tens of millions of Americans struggle to access and afford health care, an issue exacerbated by the nation’s ongoing shortage of providers. Nurse practitioners (NP) can help address gaps in care, given the broad range of services they’re able to provide and the relatively low cost associated with those services.

NPs are advanced practice nursing professionals who provide many of the same services as physicians, but often with a more holistic approach. With the Health Resources and Services Administration (HRSA) reporting in 2023 that 259 million Americans live in primary and mental health care workforce shortage areas, many states are exploring ways to allow NPs more autonomy to provide services once offered only by doctors.

Many states already permit practice autonomy for NPs, and others may follow — making it a great time for nursing professionals to consider pursuing a career as an NP and starting a private practice. However, what’s the path to starting a nurse practitioner private practice?

A Doctor of Nursing Practice (DNP) degree provides the highest level of nursing knowledge and leadership skills, which can be valuable preparation for starting an NP private practice.

What Is a Nurse Practitioner Private Practice?

In 2020, most NPs worked for others in locations such as hospitals and group practices, according to the American Association of Nurse Practitioners (AANP). But a growing number were choosing to work in private practice

Private practice, AANP indicates, was among the top 10 work settings for NPs in 2020.

Nurse practitioner private practices are independent businesses that NPs operate themselves to provide patient care. About 4% of NPs reported to AANP that they provided services in these settings.

Nurse Practitioner Services

Whether they’re working for other health care professionals or in their own practice, NPs offer services that blend the treatment of medical conditions with a focus on disease prevention and health education.

NPs are a type of advanced practice registered nurse who perform work that often is similar to that of a physician. NPs’ scope of responsibility varies by state, but the types of care that NPs typically offer include the following:

  • Managing patients’ overall health care
  • Diagnosing and treating acute conditions, such as infections and injuries, and chronic disorders, such as diabetes and high blood pressure
  • Prescribing medication, including controlled substances
  • Ordering, conducting, and interpreting medical tests and X-rays
  • Counseling patients about lifestyle choices that promote wellness

Nurse Practitioner Specializations

NPs provide primary, acute, and specialty care, but the overwhelming majority of these professionals hold a certification in some type of primary care. In 2022, AANP reports, 88% of NPs held a certification to provide primary care, offering long-term assistance for various health needs — from preventive procedures to disease management.

Each NP chooses a particular patient population or condition as a focus of care. Family nurse practitioner (FNP) is the most common area of specialization, according to AANP. In 2022, about 70% of NPs specialized in providing primary care for patients from infancy to older adulthood.

Among the other common areas of specialization for NPs are:

  • Adult-gerontology primary care: Offering primary care to patients from young adulthood to older adulthood
  • Adult-gerontology acute care: Offering short-term care for acute conditions to patients from young adulthood to older adulthood
  • Psychiatric mental health: Focusing on treatments that support patients’ mental health
  • Women’s health: Providing various medical services to women, including OB-GYN care
  • Pediatric: Caring for patients from infancy to young adulthood

Why Start a Nurse Practitioner Private Practice?

NPs who are considering starting a private practice might wonder what the advantages are. The reasons that NPs go into business for themselves range from following their own interests to meeting community needs. Often NPs who choose to start a private practice do so for the independence it can give them to choose their own hours and services.

Some of the primary benefits of opening a nurse practitioner private practice include the following:

Gaining Independence

Leading a private practice can give NPs more independence than they might have when working for others. For example, they can set their own:

  • Work schedule
  • Services
  • Operating procedures
  • Fees

Closing Health Care Gaps

The Association of American Medical Colleges (AAMC) projected in 2021 that there could be a shortage of as many as 124,000 primary and specialty care physicians by 2034. To compensate for this deficit and meet the growing demand for health care, the organization suggested expanding the role of other advanced health care professionals, including NPs.

NPs with their own practice can match their specialties and areas of expertise to a community’s medical needs. HRSA, for example, noted that the U.S. had a shortage of more than 17,000 primary care practitioners as of February 2023. The nation also needs roughly 8,000 more mental health practitioners to accommodate the needs of those living in shortage areas. These care gaps are especially prevalent in rural areas.

Increasing Income Potential

Operating their own practice gives NPs greater authority to establish their own rates, thus dictating the earnings they will receive. Unlike most clinics and hospitals, private practices can establish their salaries without regard to the pay scale.

Developing Business Skills

NP practices are businesses, so operating them effectively requires business savvy. Starting a private practice gives NPs the opportunity to go beyond their nursing expertise and strengthen the skills they’ll need to address concerns ranging from finances to marketing.

How to Start a Nurse Practitioner Private Practice: 13 Steps

NPs who decide to start a private practice need to take some key actions to set the business up for success. Here are 13 steps outlining how to become a nurse practitioner and how to start a nurse practitioner private practice.

1. Become a Registered Nurse

NPs typically earn a Bachelor of Science in Nursing (BSN) degree as part of their preparation, though some schools offer bridge programs that allow aspiring NPs to advance their education with an associate’s or other undergraduate degrees. Then, to earn a state-required registered nurse (RN) license, graduates must pass the National Council Licensure Examination (NCLEX).

2. Pursue Graduate Education

NPs must hold a graduate degree in nursing. The Master of Science in Nursing (MSN), which builds on the knowledge gained through a BSN program, is the typical minimum requirement for becoming an NP.

A DNP degree, however, builds on master’s-level content to provide the highest level of preparation for nursing leadership responsibilities, such as starting a private practice. Additionally, AACN and other nursing groups have advocated for making doctoral-level education a requirement for all NPs.

3. Obtain NP Licensing and Certification

NPs must obtain national certification in their area of specialization; this requires passing a board exam. Although requirements vary, states generally offer NP certification to those meeting criteria that include holding national certification.

4. Determine State Practice Authority

Each state has its own specifications for the type of work that NPs may perform and the level of autonomy they’re afforded. The level of authority that a state grants NPs to practice independently can affect NPs’ plans for starting a practice there.

NPs who are looking to start a practice should carefully review the types of services that their state’s practice authority allows them to perform and whether they may do so independently. Then they should consider whether the scope of that authority makes it practical for them to start a private practice in that state.

Practice Authority Types

As of 2022, 29 states and territories had granted NPs full practice authority, according to AANP. Following are the various levels of practice authority that states may grant NPs:

  • Full practice. This designation allows NPs to perform all the typical tasks associated with the role, including ordering and interpreting tests and prescribing medication, without supervision.
  • Reduced practice. NPs in states with reduced practice authority are restricted from performing at least one of the tasks that NPs perform, and the designation sets limits for practice autonomy.
  • Restricted practice. This scope of practice restricts at least one service and requires supervision by another health care provider.

5. Outline a Business Plan

NPs who want to start a private practice should gather and outline their ideas about how the business will operate. This outline, which will inform the practice’s business plan, can include everything from the name of the practice to the types of patients the practice will treat.

6. Consider Locations

Another crucial step in starting a nurse practitioner private practice is determining the logistics for the business, including identifying a location. Below are some issues to keep in mind when deciding where to establish a private practice.

Area Demographics

NPs should consider the regional demand for the services the practice will offer. HRSA indicated, for example, that the U.S. had 3,450 medically underserved areas as of February 2023. California had the highest number of these areas, with 214.

Tax Rates

State and city rates for corporate, income, sales, and property taxes will affect the practice’s cash flow projections. The Tax Foundation provides an index of what it describes as business-friendly states, with Wyoming topping the list for 2023.

Nurse Practitioner Salaries

NPs should also explore typical salaries for the profession in the area they’re considering. The median annual salary for NPs nationwide was $120,680 as of May 2021, according to the U.S. Bureau of Labor Statistics (BLS). California was the highest-paying state, with a median annual salary of $151,830.

7. Choose a Legal Structure

The legal structure of a business guides its operations and tax requirements. Structures to consider include the following:

  • Partnership. The partnership structure is for businesses with multiple owners, with one partner assuming the greatest amount of responsibility and paying self-employment taxes. Limited liability partnerships (LLPs) absolve owners from responsibility for other owners’ actions.
  • Limited Liability Company. The LLC structure exempts the owner from paying corporate tax and from liability in the case of business bankruptcy, but it does require self-employment tax.
  • Corporation. Establishing a corporation separates business owners from personal liability, but it requires corporate income tax (except in the case of S corporations).

8. Secure Required Permits

NPs starting a practice must obtain any necessary permits and licenses the nation, state, and community require. One requirement, for example, is securing a federal tax ID number from the IRS. Additionally, states that call for income and employment taxes for the business require separate tax ID numbers.

9. Obtain a DEA Number

NPs who plan to administer, prescribe, or dispense a controlled substance as part of their practice must register with the Drug Enforcement Administration (DEA). The U.S. Department of Justice issues the registration number.

10. Obtain a National Provider Identifier

The National Provider Identifier is a unique identifier for health care practices that submit claims for insurance plans, such as Medicare. The identifier also simplifies the process of accessing health records.

11. Purchase Malpractice Insurance

Securing malpractice insurance to protect against the possibility of this type of lawsuit is important. Regardless of whether the practice ever faces accusations of negligence or error, guarding against the high cost of defending the practice against such charges can provide peace of mind.

12. Order Supplies

Starting a nurse practitioner private practice also requires the purchase of equipment and supplies. NPs should carefully consider the following factors when buying these items:

  • Quality
  • Cost
  • Warranties
  • Ease of use and reuse

13. Market the Practice

Marketing a nurse practitioner private practice is critical in attracting not only new patients but also qualified staff. A few options for getting out the word about the business are:

  • Establishing a website for the practice that incorporates terms potential patients will include in online searches
  • Purchasing online ads that appear when potential patients browse the internet
  • Posting information about the practice on social media
  • Touting positive online reviews of the practice’s services
  • Sending emails announcing the new practice

How to Create a Nurse Practitioner Private Practice Business Plan

For NPs starting a private practice, creating a formal document that expands on their outlined plans for the business can help to solidify ideas and goals. The business plan serves as a road map for the practice’s structure, operations, and plans for growth. It can also help NPs show potential partners and investors that working with the business is a wise choice.

Components of a Nurse Practitioner Private Practice Business Plan

A traditional business plan is the most common type of business plan, according to the U.S. Small Business Administration (SBA). This type of plan is quite detailed and comprehensive, providing the in-depth information that investors and lenders are likely to seek. Each part of the private practice business plan should help show how the practice will differentiate itself from other providers to offer the highest-quality care.

The components of a nurse practitioner private practice business plan can include the following:

Executive Summary

An executive summary is a high-level overview at the beginning of the business plan. In this section, NPs should clearly specify the value they’ll bring to patients and the community.

Market Analysis

In the market analysis section, NPs should identify the practice’s potential strengths, weaknesses, opportunities, and threats; this is known as a SWOT analysis. They should note the patient populations they plan to target and the types of services that other providers are offering to serve these groups. The goal is to show why the market that the NP has selected for the practice provides it with a good opportunity for success.

Practice Overview

An overview of the practice should provide details about the business, such as:

  • Background about the practice and the nurse practitioner who will run it
  • General information about the services the business will offer
  • Details about the location of the practice
  • Timing for the practice’s opening

Services Offered

The business plan should also include a section that provides greater detail about the services the practice will offer. In describing each service, the business plan should include information about the fee the practice will charge for it as well as the anticipated profit it will generate.

Organization and Leadership

The business plan should explain the selected legal and management structures of the business. The organization and leadership section also serves as an opportunity to provide more information about the NP who will own the practice and to share resumes from any potential employees.

Marketing Strategy

In the marketing strategy section, NPs should outline plans for how they’ll market the practice, including the allotted budget. This section should also note how the business will measure the success of its marketing efforts.

Financial Projections

The business plan should include projections about financing for the first five years, focusing the greatest detail on the coming 12 months. The projections should note figures such as:

  • Income
  • Capital expenditures
  • Cash flow

Funding Requirements

To help secure financial support for establishing the practice, the funding requirements section should indicate whether the NP is seeking a loan or an investment. Financial information should also include details such as:

  • Amount of money the business is requesting
  • Length of time the financing will cover
  • Equipment, bills, and processes the funding will support

Tips for Operating a Nurse Practitioner Private Practice

Starting a nurse practitioner private practice can offer many rewards, but establishing a new business isn’t always a smooth process. NPs can avoid a host of pitfalls, from struggling with startup costs to navigating complex laws and regulations, by following the tips below.

Be Patient

Starting a business entails many steps that take time to organize and follow. NPs starting a private practice should map out the necessary actions and resist skipping important steps or rushing the process.

Conduct Research

Those starting a practice should learn about the rules and regulations that will dictate how they’ll operate the business — or if it even makes sense for them to do so. Thorough research on issues like the scope of practice for NPs or tax laws in a given state is crucial.

Enlist Help

Hiring professionals for work that requires specialized knowledge can smooth the process of starting a practice. For example, enlisting the help of a top-quality insurance coder can make the process of seeking reimbursements more straightforward. Partnering with financial and legal professionals can help NPs stay abreast of budget concerns and protect the business against lawsuits.

Continue Learning

NPs typically need to complete continuing education to maintain their certification. However, it makes sense for those with their own practice to also stay abreast of the latest trends in nursing leadership and business.

Advance Your Career While Meeting Community Needs

Starting a nurse practitioner private practice can lead to a host of benefits for you as well as the patients your practice will serve. Developing nursing and leadership expertise is an important part of taking that step. If you’re ready to take your knowledge and skills to the next level, explore the Regis College online MSN to Doctor of Nursing Practice program.

You can choose from six nurse practitioner specialties, or you can focus on nurse leadership or nurse education. The online program also provides flexibility, so you can complete your degree without interfering with commitments at work and home.

Discover how the Regis online MSN to DNP program can help you advance your career and serve your community.

Recommended Readings

Promoting High-Value Care in the Nursing Field

What Is Health Equity, and Why Does It Matter?

What Is Patient-Centered Care? A Key Component for Advanced Nursing Care


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American Association of Nurse Practitioners, “The Path to Becoming a Nurse Practitioner”

American Association of Nurse Practitioners, State Practice Environment

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