Setting Fees in Private Practice
Setting fees in Private Practice is a hot topic. I’ve also had to go through my own journey when it comes to setting fees in my own business. It can be challenging to set your rates, especially when you are new to Private Practice or running your own business.
In this week's blog, we’ll go through some misconceptions about fee setting. We’ll also talk about the outgoings and hidden costs of running a Private Practice. Finally, I’ll give you a simple formula to calculate your session fees and how you can STILL offer a low fee programme if you want.
Comparing to Other Therapists
What I’ve seen a lot of therapists do when they look at their fees is compare themselves to other therapists in their area. Whilst this may seem like a good starting point it can lead to you undervaluing yourself. Those therapists might have done this same exercise and now you’re just joining a group of underpaid business professionals.
You may have a particular niche you work in and this may merit a premium rate. You have no idea about their outgoings. They may work at home online-only or rent an expensive room in the centre of town. You won’t necessarily know those details so you may be comparing apples to oranges.
COMPARING APPLES TO ORANGES
Comparing yourself to other therapists might seem like a good starting point however, this can lead to you undervaluing yourself.
Cheap Doesn’t Equal Value
You may think that if you make your fees low or lower than other therapists in your area that you'll get more clients. Whilst that may be true how long will it be before you resent working for such a low amount. You are not paid for the 50 minutes you are with the client. You are paid for your skills, experience and training. My husband is a personal trainer, he charges clients an hourly rate and then makes them do all the work!
On the flip side, if you were flicking through a directory of professionals and you came across the lowest rate, what would you think about that business? I’d personally jump to the conclusion they were less qualified and less able to help me. You shouldn’t guess what people will be able to afford. You should price based on what you need and want to earn based on your own personal situation.
You Are a Business Owner
WHEN YOU ARE IN PRIVATE PRACTICE YOU ARE A BUSINESS OWNER
You may not feel like that to start with but you will have set up costs right from the start. You will also have monthly outgoings and all this should be taken into consideration when you are setting your fees.
If you don’t take your business seriously, who will? Put your fees on your website. You can read more about Special Practice Websites. You’ll get better inquiries when you do this and you can always mention your lower fee programme if you have spots available.
Client Work
Remember the work doesn’t stop after 50 minutes. There will be lots of additional work for you to do outside of the session. Supervision, Research, Administration, Invoicing, Marketing, Bookkeeping, the list goes on... If you schedule 15 client sessions a week you will need to at least double that for the above. You can of course outsource some of that work to a Virtual Assistant but what you will save in time you will need to pay for in hours worked. You can take a look at what Tasks you can Outsource to a VA to get you started.
Calculating Session Fees
First, work out what you want your take home money to be after expenses.
Add in your annual expenses or estimate if you are brand new. You can check out the Outgoings in Private Practice blog for things to think about.
Add these figures together to get a total
List how many weeks holiday you want to take
Add on a couple of weeks for sickness
Take the total number of weeks away from 52
Divide the total take home and expenditure by the number of weeks you will be working
Divide that by the number of sessions you want to do in a week
.
30,000
6,000
36,000
6 weeks
2 weeks
44 weeks
36,000 divided by 44 = £820 (rounded)
Divided by 15 sessions = £55 (rounded)
There is your ideal minimum session fee.
Low Fee Programme
If you would like to be able to serve your community and be able to offer a lower fee option you can always set up a low fee programme. You will need to adjust your figures slightly to ensure you can still meet your target earnings. You could offer 20% of your slots on this programme for example. I’d encourage you to create a reduced fee agreement and agree to a set number of sessions or a set amount of time at this rate. This will ensure you can continue to offer these spots and you will not have too many people on this programme.
Conclusion
Setting fees in Private Practice can be an emotive subject. Try to take the emotion out of it and just use maths. You have studied hard to be able to work in Private Practice. You are a professional who has skills and experience which will benefit your clients' lives. Also, take into account you can only take care of others when your time is valued and you feel financially secure.
If you’d like more help with setting your fees or setting up your private practice you can book an Admin Audit call with me. We’ve also created templates for therapists in Private Practice which include invoicing and bookkeeping.
We specialise in helping therapists in Private Practice. You can check out how you can work with us HERE. If you’d like help with knowing the best way to invoice, sign up for the invoicing freebie.
