In our webinar How to Set Your Fee, we talk about getting started and how to actually calculate a fee for your private practice services. If you don’t know how to set your fee – start here first.
Recently we were asked – when do you raise your fee? Maybe you have a fee that is working for your business. This means you pay your bills, your taxes and yourself. Business is going great! But when do you raise your fees?
Annually you need to review your finances in addition to your monthly or quarterly bookkeeping. Sit down and look at your personal finances and the finances of the business. Has the cost to run business or your life increased?
In the US, every year the social security administration evaluates the cost of living using the consumer price index. From that evaluation, they determine how much, if any, distributions should go up to account for the change in cost of living. Almost every year (except for 2 years in the past 10) it has gone up. When was the last time your fee went up?
I’ve talked to therapists who haven’t raised their fees in years. Yet all other products and services continue to rise, accommodating for changes in our economy. Your business decisions should reflect this as well.
FIRST ANSWER: When your cost of living has increased or there has been a change in your financial portfolio that requires your business to generate more income.
If your business is in the flow, and you are getting consistent calls, raising your fee is something you want to look at. There may be more of a demand for your services as well. This is also another time you can increase your fee.
SECOND ANSWER: When you are full or have a waitlist.
Sometimes life changes as well. There was a time I could see 20 clients in my practice. Then the demands of family and my other business became greater and thus I couldn’t see as many clients as before, but I didn’t want my income to take a hit while I focused on other growth areas of my life. If you have to see fewer clients, then it might be time to raise your fee so you can continue to keep the doors open.
THIRD ANSWER: When your life changes and you don’t want your income to suffer for it.
I have received emails saying that it is unethical to raise a fee. Money becomes a moral issue when it is used to cause harm or assert power over another. Otherwise it is a resource, simply that. We have the freedom to choose how we use it.
The decision to raise your fees is a personal one. I am not sure it is an ethical one. Ethics come into play when our business decisions result in abandoning our clients or resenting our clients for things that we have chosen to do. Also when we make decisions that result in lack of self care, inability to function and therefore also impact the relationship with our clients.
Your money choices impact your clients.
The good news is, we can start integrating this conversation into the therapeutic room and make it part of the process. Imagine if in your informed consent, your clients are made aware that fees are reassessed on an annual basis. Imagine if there is already the understanding that you WILL talk about these things with them and have a process in place. It’s a much safer container! So please, let’s start integrating the reality that there is a financial transaction as part of that and it needs to be respected. Not something that become reactive, fear based or defensive in our businesses.
What if you discover your can’t raise your fee?
This question leads me to ask you more questions.
What is the evidence of the “can’t”?
Some people have a limit in their brain that really, is just in their brain. It’s a sign of their money blocks. Other times, yes…I can see how this might happen.
I you are on an insurance panel, you are limited to your reimbursement from that stream of income. You may consider getting off the panel. But even then, you may not want to. Ok….
ANSWER: Consider another stream of income.
If you have maximized the income from your current services AND you make a livable/sustainable wage AND you are taking care of your professional and personal life AND there is no financial struggle AND you want to make more money, then you may want to consider another stream of income outside of your traditional 1:1 services.
This can be done through products (physical and online), experiences (retreats), speaking or expanding your services with having other clinicians in your practice.
We have an upcoming training all about what you need to know to get started on another stream of income in your practice. Click here to join us!