Mistakes - we all make them. But the best thing about having people forge paths ahead is that you can learn from others. So we put together some of the top fee mistakes we see counselors make in private practice.Read More
Welcome to Lesson #2 on How to Set your Fee!. Here is what you need to do:
1) Watch the video
2) Calculate fee for current financial goals
3) Evaluate revenue streams and assess if they are viable for your financial goals (insurance companiesRead More
How do you determine your fee? - It's a question we get asked A LOT. And while, I can't tell you, your rate should be X, I can tell you how to determine your fee. So before you go creepin' on your peers' websites and looking at what others charge, I want to take you through a part of the process we have our own clients go through in our coaching program.
Sit down and look at what you want for your life. Really dream. Imagine what life looks like in 5, 10, 20 years from now. Where are you living? Who is in your life? What does your day to day look like? Some people even do vision boards to really capture what they are pursuing. This is the most important research you can do in determining your fee.
Now, let's consider that dream and the lifestyle that goes with it. What do you think you need to make to get to that place. I'm not saying you are gonna be there tomorrow, but let's kinda explore the cost of living. My dream is much more affordable in Minnesota than in California, but alas, I plan to stay here. I know what my mortgage looks like and what it is like to live here. But for me, I know I plan to move and do some things in my life that require more income. Retirement, college savings, etc....Look at the big picture and let's draw and estimated amount of money that you will one day need.
You have your number, now it is time to crunch it. You want to make $200,000. Let's say your fee was $150. You estimate 1 client slot at 48 sessions per year - because you are going to get sick or want to take a vacation, so that means your average client slot is worth $7,200. That means you need about 28 clients per week to get to your $200,000. Of course that doesn't factor in client's missing appointments, but we are estimating right now. If you charged $100 per session - you are looking at 42 clients!!!
Go back to that vision...what kind of hours were you working? 20 hours per week...4 hours per day? or 3, 10 hour days? Now compare what you crunched in terms of numbers to hit your goal...is it feasible.
You have two options - increase your fee or diversify your income (that is a whole other blog). By diversify, I mean, find other ways of bringing in income besides having your butt in the chair. Ok, so let's say you see that you need your fee to be $200 an hour and you're thinking..."there is NO WAY I can charge that." Let's evaluate the limits you put on yourself. There are people that charge that amount and others that don't feel worthy of that. Heck, I don't charge that, but I am working on it :) You have to do a little bit of reflection and evaluate
What is your time worth to you?
What is your education and training worth to you?
What is your skill worth to you?
It is a lot harder, in my humble opinion, to start with low fees and increase them over time than to start at the fee that you really want to charge. WHY? Because you are going to have to work just as hard at getting a client at $60 a session as you will at $100 a session. After you play with the numbers, then you get to decide what you are comfortable with - while recognizing your WORTH. You will have to battle the demons of doubt and fear to claim what you really feel you are worthy of charging.
What about your sliding scale? Bottom line - no more than 20% of your business should be sliding and you need to crunch the numbers for what you can afford to do. Ironically, when you take care of yourself and are financially stable, you have more room for the sliding scale clients. If you start off with sliding you will find yourself stuck in a cycle of not having enough for yourself which will lead to more burn out.
Notice I didn't say anything about comparing yourself to other people or wondering what someone else would really pay for counseling. This is about you making your business work for your life and your dreams. Yes, there are more details to the process, but this is a good summary of how I have helped other therapists determine their fee and I hope it helps you to reconsider your options and really look at what you have been doing in your business.