Setting private practice fees doesn’t need to be a complicated process. We can make it difficult because of our worries about our self worth and being good enough.
My own coach has an expression:
It’s maths or drama
and I’ve learned that we can make setting private practice fees a drama by allowing our mindset issues to get in the way of the maths.
In this blog, there’s a simple Fee Setting Tool that will help you to price your service so that you can earn a sustainable living from counselling. It takes all the complications out of the process because simply, it’s all about the maths.
A common technique for setting fees
Often the way we set our fees is to look at what other local therapists are charging by consulting their websites or online directories. This may be helpful to benchmark an approximate “going rate” but it can lead to therapists undervaluing themselves.
This is because our internal dialogue usually goes something like this:
“So they’re charging “X”. Well, they’ve been in practice for a while. They’re probably more experienced than me. Their website looks really professional. Clients are more likely to choose them. I think I’ll have to charge less than them”.
Recognise those thoughts? That’s some of the drama.
So what are there disadvantages of setting private practice fees by copying others?
You may be:
- joining a pool of other therapists who do not know how to set fees and are undervaluing themselves
- assuming that clients will be attracted by low fees
- structuring your fees without considering your own niche
- undervaluing aspects of yourself that will make clients want to choose you, whatever your experience
For a further exploration of these themes, see my subsequent blogs.
Calculating Private Practice Fees
A simple and logical way to start working on your fee rate is to ask the following questions:
- What are my income needs (either part time or full time)? Set a target wage. Incidentally, the Association of Independent Professionals and the Self-Employed (IPSE), has suggested taking the equivalent earnings you would have received as an employee and adding a third
- What are my annual expenses? This includes things like supervision, CPD, room hire, cost of utilities, advertising, insurance, professional membership fees, stationery, web hosting services, etc.
- How many weeks’ holiday do I want? For example, will it be 4 weeks or 6 weeks? Remember to include time for bank holidays. Allow yourself some sick weeks as well. Subtract the number of weeks from 52.
The income you need to earn is a sum of your target wage and your annual expenses (your gross income).
So, to reach a fee level, do the following:
- Divide your gross income by the number of weeks you wish to work.
- Divide the weekly figure by the number of clients you can reasonably see in the time available. Don’t be tempted to over-inflate this number as each week will include a certain number of cancellations or postponed appointments.
Here’s a simple tool that will help you do the maths:
This fee setting sounds scary!
However simple it is to use the tool, it’s at this point that any underlying difficulties in your own relationship to money may emerge.
Thoughts such as:
- I can’t charge “x”! No one will pay me that!
- No one else charges “x” so I can’t!
- I can’t charge “x”! I’m not worth it!
indicate it’s time to see if a different perspective may help you in fee setting.
I expand on these themes in the following post: Fees for Private Practice: What is Affordable?
Possibly you may think you can’t charge high fees or that you won’t be able to attract enough clients who are prepared to pay them. That’s where coaching can help. I can help you create clients who just want to work with you and are willing to pay your prices.
If you’d like to explore how to grow a profitable private practice, please book in for a free, no obligation exploratory session with me.