You can also listen to the podcast episode on this topic here…
Fee setting can be tough, especially when you are a therapist new to private practice. You don’t want to charge too little, or too much. You’re probably a Goldilocks in that you want it to be “just right”. So, how do you get to this magical and elusive number?
Arriving At Your Fee
How did you decide on your rate? Was it random? What felt right? An average of what others were charging? On the low end of the average? The high end? What you felt your “worth” was? Or was it more mathematical? Did you work the math backwards from your income goals?
I think I considered all these questions as I was settling on my fee. I’m also a researcher, so I researched the shit out of everything I could.
I was an associate licensed therapist when I started my practice, so I searched for associate licensed therapists in my area and therapists who were in their first 2 years of private practice to see what they were charging. I wanted to see what was “normal” for my area. I looked at the numbers, took averages, considered the low and high ends of these numbers.
I also played with formulas that took into consideration how many weeks I wanted to work per year and how many clients I wanted to see per week to arrive at a number.
I believe it was a combination of all these things that helped me to finally settle on a rate. But I was also grappling with the “charge what you’re worth” statement, which brought in an emotional component to what I now see as strictly a business decision.
Don’t do what I did. There’s an easier and more effective way to arrive at your fee. More to come on that later. For now, let’s talk about worth.
What Does It Mean To Charge What You’re Worth?
Hell, I don’t know!
All jokes aside, there’s been a big movement in the therapist community to “charge what you’re worth”. But what does that even mean?
I get the premise behind it. In the recent past, money has been a dirty word for therapists. It’s something we didn’t talk about. And you were a bad, greedy therapist for wanting it.
This was very difficult for me to hear. Why can’t we say that we want our practice (business) to be successful? Why am I such an unsavory character for wanting to make enough money to live a comfortable life and ensure that my business is sustainable?
Why is it okay for businesses in general to make money, but when you throw a therapist into the mix the sentiments change?
We get unhelpful messages such as “you’re a therapist, you shouldn’t be in it for the money” and “not every single person on the planet can pay your fees, don’t you care about helping everyone?” Okay, that last one may have been a bit exaggerated, but you get my drift.
Maybe it’s because my educational background is in business management and marketing, but I believe we as private practice owners are, first and foremost, running a business. If we don’t have a business, we can’t be a private practice owner.
I think the problem may lie with the semantics of the word “worth” as it relates to the business of therapy. Let me explain.
It’s the nature of therapy that we are so intimately tied to the services we provide. Our work comes out of us. Literally. Out of our mouths. Our words are the service that people pay for. No wonder it’s so difficult to imagine our business as separate from ourselves.
But it’s something that we need to do. This is why I think we need to get away from so closely associating worth (ourselves) with fees (business). This can be very difficult for therapists to do.
Your worth is not quantifiable (you are priceless beyond measure 🙂 ), but your skills and services are.
I quickly found that your “worth” isn’t always consistent.
Here’s a quick example. How many of you have come out of a session with a client and felt terrible about it? Like you didn’t help at all? And have you also come out of a session feeling that a miracle just happened? That you were worth your weight in gold because of the amazing transformation that you helped to facilitate?
We intellectually know that our worth is intrinsic and shouldn’t fluctuate with outside influences. But, don’t we sometimes evaluate our worth by some external factor – like how our most recent session panned out?
This can put us on an emotional roller coaster.
That session you felt terrible about? You may leave feeling that you should have only charged $5, or even worse – maybe you should have paid your client for even being there during that shit-show!
And that session where the major transformation happened? Maybe that was worth $2,000, or it could even be priceless.
We wouldn’t have a business if we were so inconsistent, charging $5 one day, $2,000 the next, and paying out money on those really rough days. If only there was a better way. Well, if you can do basic math, there is!
Do The Math
This blog post was partly inspired by a podcast interview I listened to in October 2017. Nam Rindani was interviewed by Annie Schuessler of Rebel Therapist podcast (formerly the Therapist Club House podcast), and I felt an instant connection to the way in which she described her fee setting process – which she adopted after a conversation with her husband.
I highly suggest listening to her interview, and you can do so here. Nam discusses her thoughts on fee setting and charging what you are worth around the 32:00 mark.
Here are a few of Nam’s statements that really stood out to me:
- “I am not a therapist who set her fee based on how I value my work. I actually set my fee entirely based on math.”
- “This doesn’t have to be about emotions, it’s just math.”
- “What I will absolutely not do is make my fee about my self-worth.”
There are many fee calculators out there that you can use to help you in settling in on a rate for your services.
What I encourage you to do is to allow for the following considerations when you are arriving at your fee. Remove emotion and thoughts of worth, and take an honest look at what your business needs to not just survive, but thrive.
Your clients want your business to be successful, because they need you. Now what do you need to make in order to continue to stay in business?
Consider the life that you would be happy living. What are your personal expenses? Mortgage, car payment, property tax, retirement, student loans (gasp!), groceries, utilities, and the list goes on. I would also go so far as assuming that you would like to take vacations too. And all of this comes out of the percentage that you pay yourself from your business.
What kind of therapist do you want to be? I would assume that you want to continue learning through conferences, specialized trainings, and workshops so that you can better serve your clients.
You will also have other business expenses such as office rent, practice management software, business cards, liability insurance, and licensing dues.
You’re not just an employee of your business. You are the CEO (chief executive officer), the COO (chief operating officer), the CFO (chief financial officer), the CMO (chief marketing officer), the CIO (chief information officer), the head of the Human Resources department, and there are many more titles I’m forgetting.
The point is – you deserve to get paid for all your hard work. If your fee is $120, you don’t get to see all of that money. In fact, a large portion is already spoken for – whether it be for taxes or business operating expenses. And it’s not like we are really making $120/hour, because it is highly unlikely that we have 40 hours of clients per week (whew, I’m tired just imagining that).
What I hope that you take away from this post is that you are amazing, one-of-a-kind, and remarkable beyond measure.
You did notice that I said “beyond measure”, right?
So that means to get yourself and that sometimes-wavering self-worth out of your business decisions! Run your practice like a business, and be that awesome, caring, and compassionate therapist in your sessions.
And if you need help keeping track of your income and expenses, you should check out my Old School Financial Spreadsheet.
I Want You To Be Successful In Business & In Life!
Starting, growing, and maintaining a business is a big deal. It's super-exciting and super-scary all at the same time. I created Mountain Practice Journeys to support you through the difficult and muddy terrain, and to celebrate with you when you have reached each summit of the many mountains you will conquer on your journey.
Happy Climbing, Cindy