How to Start a Nurse Practitioner Private Practice

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A nurse practitioner meets with a patient in an exam room.

Nurse practitioners (NPs) play a vital role in patient care. They provide many of the same services as physicians, but often with a more holistic approach to treatment and at less cost to patients. One of the top 10 work settings in which NPs provide care is in private practice, according to a 2020 report from the American Association of Nurse Practitioners (AANP).

The opportunities for providing this assistance are many. The Health Resources and Services Administration (HRSA) reported in 2022 that 89 million Americans live in primary care health professional shortage areas (HPSAs), while 143 million live in mental health care HPSAs. To fulfill these unmet needs, the United States needs some 15,540 new primary care providers and about 7,150 additional mental health care providers to enter the workforce. This shortage of care providers is especially pronounced in rural communities and underserved urban populations.

With the COVID-19 pandemic putting additional strain on the health care system, many states are addressing care gaps by granting NPs more autonomy. This expansion of authority could lead to greater opportunities for NPs to operate their own practices. The path to becoming an NP and opening a private practice includes pursuing an advanced nursing education such as a Master of Science in Nursing (M.S.N.) degree.

Why Start a Nurse Practitioner Private Practice?

Before exploring how to start a nurse practitioner private practice, nursing professionals may be curious about what benefits private practice can offer. For many NPs with their own practice, the primary benefit is the increased autonomy it affords.

NPs in private practice are entrepreneurs who operate their business either independently or in collaboration with a physician, depending on the state in which the practice operates. Starting a private practice can offer NPs the following advantages and experiences.

Be Your Own Boss

Private practice NPs often have more autonomy than those who work in facilities owned by others. Whether operating independently or in collaboration with other health care providers, they can enjoy more flexibility to set their own rules and treat patients on their own terms.

Run a Business

Starting a private practice allows NPs to exercise their business acumen in addition to applying their health care expertise. NPs in private practice use their business skills to perform tasks such as setting up a new enterprise and marketing their services.

Address Critical Health Care Needs

Opening a practice as an NP allows nursing professionals to match their specialty and areas of expertise to a community’s needs. For example, according to a March 2021 report from the Rural Health Information Hub, the national clearinghouse on rural health issues, about 61% of primary care HPSAs and 58% of mental health HPSAs were in rural areas. Both primary care and mental health NPs could address these unmet health care needs by opening new practices in rural communities.

9 Steps for Starting a Nurse Practitioner Private Practice

The process for how to start a nurse practitioner private practice begins with pursuing an advanced education, followed by becoming certified and fulfilling licensing requirements. Then, to open their private practice, NPs should take action related to insurance, logistics and promoting the new business. The following are among the critical steps for NPs going into private practice.

1. Complete Necessary Education

Becoming an NP requires a Bachelor of Science in Nursing (B.S.N.) degree followed by an advanced degree such as an M.S.N. (Master of Science in Nursing). These degree programs typically include classroom and clinical work focused on health assessment, pharmacology and pathophysiology. When pursuing an advanced degree, nursing students should consider the patient population they want to serve as NPs and focus on that track.

2. Obtain Licenses and Certifications

Generally, NPs hold a registered nurse (RN) license. State licensing boards typically require nurses to pass the National Council Licensure Examination (NCLEX) before they receive an RN license.

Graduates of advanced nursing programs should pursue national NP certification in their area of focus, such as family medicine or psychiatric-mental health care. Then they can seek state licensing as an NP.

3. Determine Practice Authority

The level of autonomy, or practice authority, that NPs have varies by state. This practice authority dictates the types of services an NP can offer in their state. Knowing a state’s level of practice authority is important in determining whether to open a practice alone or in collaboration with a physician.

In almost half of U.S. states, NPs can operate with full independence. Other states limit NPs’ autonomy to specific services or settings. The following are designations of NP practice authority.

  • Full practice: States with full practice authority allow all NPs to independently perform services such as evaluating patients, ordering and interpreting tests, designing and managing treatment plans and prescribing medications.
  • Reduced practice: In some cases of reduced practice authority, NPs must collaborate with another health care provider to provide patient care. Other states limit the setting in which NPs provide certain services.
  • Restricted practice: States with restricted practice authority require supervision by another health care provider for NPs to provide patient care.

4. Consider Logistics

Another key step in establishing a private NP practice involves creating a business plan that outlines how the practice will operate and grow, and that addresses the market for the services the business will offer.

Select a location for the business, based on financial and legal factors such as cost, service demand, tax rates and average salary for NPs. When exploring demand and competition for NP services, for example, it could make sense to consider rural communities, which have an acute shortage of health care providers. Then secure any funding needed to open the practice.

5. Choose a Legal Structure

Several options exist for choosing the legal structure of a business, with each offering different opportunities for business operations and finances. Common legal structures include the following types.

  • Corporation: This structure protects the business owner from personal liability, but typically requires the payment of corporate income tax. One type of corporation structure, S corp, is exempt from corporate tax. This structure also carries high startup costs.
  • LLC: Under a Limited Liability Company (LLC) structure, business owners also are protected against personal liability and exempt from corporate tax, but this structure requires paying self-employment taxes.
  • Partnership: Businesses with more than one owner may be partnerships. Limited partnerships offer more control for one partner, who must pay self-employment tax. Under Limited Liability Partnerships (LLPs), each partner is not liable for the other partner’s actions.

6. Secure Required Permits

Opening a private practice requires obtaining a federal tax identification from the Internal Revenue Service as well as business registration. In states that require income and employment tax, new businesses may need a separate state tax ID number.

7. Get a National Provider Identifier

The National Provider Identifier (NPI) is a unique ID for recognized health care providers under the Health Insurance Portability and Accountability Act (HIPAA) Administrative Simplification Standard. Obtaining an NPI allows a practice to perform tasks like accessing health records and billing Medicare.

8. Purchase Malpractice Insurance

Malpractice insurance is relatively low-cost protection in case of a malpractice lawsuit. This insurance guards the business owner and their employees against negligence claims and financial loss.

9. Market the Practice

To survive and thrive, a new NP practice needs patients. Marketing efforts such as social media posts and website development represent important steps for starting a nurse practitioner private practice. Other options for marketing include email, newsletters and patient referral programs.

Nurse Practitioner Private Practice Tips

NPs in private practice have the important distinction of helping the nation meet its growing health care needs. While being a business owner has its challenges, the following tips can help NPs in private practice overcome them.

  • Consider the desired impact for the practice: NPs should determine the needs their practice will address and select a practice location where they can provide the greatest benefit.
  • Be ready to perform business tasks: Owning an NP private practice entails performing tasks beyond typical nursing functions. NPs who want to start their own business should be prepared to take on responsibilities such as bookkeeping, networking and making staffing decisions.
  • Keep tabs on the practice’s finances: Closely monitoring cash flow and budgeting accordingly can help ensure the practice has enough money to meet its expenses.
  • Establish a support network: NPs starting a private practice should identify health care professionals they can turn to for professional and moral support when needed.

Play a Key Role in Meeting Health Care Demands

NPs are in high demand, and those who start their own practices are providing more options for patients in medically underserved areas to access the care they need. If you are interested in pursuing entrepreneurship as an NP, you would do well to explore the University of North Dakota’s online Master of Science in Nursing program and its Family Nurse Practitioner and Psychiatric- Mental Health Nurse Practitioner tracks.

The M.S.N. program can provide the nursing expertise, leadership ability and cultural understanding to equip NPs to manage much-needed care for a variety of communities. The program offers this important training with the convenience and flexibility of 100% online coursework.

Discover how the University of North Dakota can help you achieve your dream of starting your own NP private practice.

Recommended Readings

Essential Nursing Skills for MSN Students

What Kind of Nurse Should I Be? Exploring Nursing Specialties

Where Can a Family Nurse Practitioner Work?



American Association of Nurse Practitioners, Findings from 2020 Survey Show Nurse Practitioners (NPs) Continue to Provide Quality Health Care During the Pandemic

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

American Association of Nurse Practitioners, Practice Management

American Association of Nurse Practitioners, State Practice Environment

American Nurse, “Starting a Nurse Practitioner Clinic: Legal Considerations”

Health Resources & Services Administration, Shortage Areas

HealthUPP, “How to Start Your Own Practice as a Family Nurse Practitioner”

International Nursing Review, “Leveraging Nurse Practitioner Capacities to Achieve Global Health for All: COVID-19 and Beyond”

Minority Nurse, Nurse Practitioners: Opening Your Own Practice

National Athletic Trainers’ Association, “National Provider Identifier: Why Should You Have One?”

NP Hub, Starting Your Own Private Practice as an NP: First Steps

Patient Engagement HIT, “Making the Case for Expanded Nurse Practitioner Scope of Practice”

Rural Health Information Hub, Health Care Access in Rural Communities

Smart Clinix, “Starting Your Own Private Practice as a Nurse Practitioner”

U.S. Bureau of Labor Statistics, Nurse Anesthetists, Nurse Midwives and Nurse Practitioners