Hello there, and welcome back to the Mountain Practice Journeys podcast!
I’m your host, Cindy Norton.
Here in Episode 9 I’m going to talk about why you shouldn’t charge what you’re worth in your private practice. I know that’s a strange statement, but keep listening and I’ll explain myself. I think you’ll like what I have to say.
Let’s get started.
Podcasts are growing in popularity and there are already so many great private practice podcasts out there. If you join the Trailblazer community via my seasonal newsletter you will receive a free A-Z download that includes a list of my favorite private practice podcasts.
I hope that the Mountain Practice Journeys podcast will earn its spot in your regular podcast listens.
See below for the episode show notes links and transcript…
Episode 9 Show Notes Links
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Episode 9 Transcript
Hello there, and welcome back to the Mountain Practice Journeys podcast! I’m your host, Cindy Norton. Here in Episode 9 I’m going to talk about why you shouldn’t charge what you’re worth in your private practice. I know that’s a strange statement, but keep listening and I’ll explain myself. I think you’ll like what I have to say.
Let’s get started.
Have you been wanting to start your private practice, but you can’t seem to take that first step? Maybe you’re afraid of failure or lack confidence, or maybe the idea of running your own practice is overwhelming. I’m Cindy Norton, owner of Mountain Practice Journeys and I help therapists and counselors to love the business side of private practice. I’ll share with you practical skills and advice along with a healthy dose of inspiration so that you can be on your way to the practice of your dreams. Put on your hiking boots, and let’s get going.
If you haven’t yet listened to Episode 8, I urge you to do that. In that episode I chat with Ryan Schwartz, the founder of Mental Health Match. Ryan shares his uplifting and inspiring story of how Mental Health Match came to be.
Mental Health Match is a new therapist directory that helps to connect you with ideal clients. If you’re already intrigued by this new directory and want to create your profile so that you can start being matched up with new, ideal clients listen to Episode 8 to get my referral code for a free 6 months.
Now let’s get to today’s episode.
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?
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 in 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 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 people?” 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 (aka: ourselves) with fees (aka: our 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 our “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 to our clients on those really rough days. If only there was a better way. Well, if you can do basic math, there is!
This episode was partly inspired by a podcast interview I listened to in October 2017. Nam Rindani was interviewed by Annie Schuessler of Rebel Therapist podcast and I felt an instant connection to the way in which she described her fee setting process.
I highly suggest listening to her interview. I’ll provide the link in the show notes found at mountainpracticejourneys.com/episode9/. Nam discusses her thoughts on fee setting and charging what you are worth around the 32 minute mark.
Here are a few of her 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. Tiffany McLain of heytiffany.com has a Fun With Fees Calculator on her website that I highly recommend.
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 leaving out – but you get the drift.
The point is – you deserve to get paid for all your hard work. If your fee is $150, 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 $150/hour, because it is highly unlikely that we have 40 hours of clients per week (whew, I’m tired just imagining that).
With everything considered, what are you really making for an hour of your work? You deserve to be paid for not just your time, but your skills and knowledge too.
What I hope that you take away from this episode 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 since we’re talking about keeping track of your money I thought I’d mention my Old School Financial Spreadsheet. I’ve created a beautifully designed spreadsheet to keep track of your income and expenses. It includes a video tutorial, financial summaries for each month and year, itemized entries so you can keep accurate records, a section to account for credit card processing fees, formulas galore so you don’t have to do any math, an automated line chart that creates a beautiful graph for your income and expenses for the year, a guide for common IRS deductions along with the appropriate categories, and it is compatible with distribution accounts such as Profit First or the envelope system. Check out the show notes at mountainpracticejourneys.com/episode9/ for a link to purchase.
During each episode I’ll be giving you one small take away, action step, or mindset shift. I call these acorns. Listen to episode 0 to get the scoop on what the acorns are all about.
The acorn from this episode is to not make your private practice a charity.
And there’s a caveat here: If you’re independently wealthy, or if your partner makes enough money to support your entire family, and you don’t need your private practice income to make ends meet – then this message is not for you.
This message is for us therapists who rely on our private practice to pay our bills and to survive. It is our job. People with other jobs don’t feel guilty for making money. In fact, they are typically looking for ways to get raises and promotions to make even more money. And not to make more money in a greedy way, but to make more money to afford vacations with their family, contribute to their retirement, have a social life, and enjoy some downtime and self-care – all which, by the way, makes for a well-rested and effective therapist.
The fact is that the higher your rates are, and the more money you make, the more able you are to help others. Let me give an example. Which therapist would you rather be?
Therapist A wants to provide counseling services to low income families, so she starts her practice with a very low rate, and a generous sliding scale. And she fills her practice. But one year in she is complaining about having to see 38 clients a week just to meet her living expenses.
She hasn’t been able to save any money for taxes and has made no contribution to her retirement. She is also physically, mentally, and emotionally exhausted because she cannot afford a vacation, nor can she afford to take any time off. How long do you think she can keep up this pace? One year? Two years?
If she burns out after the first year and leaves the therapy field, maybe she has helped about 50 low income clients by providing therapy services. But how effective were those sessions when she was emotionally drained? What quality of care were her clients receiving?
Therapist B also wants to provide counseling services to low income families, but she is aware of the reality of her situation. She saw her colleague (Therapist A) leave the field because she was overworked and underpaid. (And remember, in private practice we get to decide the hours we work and the rates we charge – so Therapist A created the overworked and underpaid scenario for herself.)
So Therapist B decides that she wants a sustainable private practice that allows her and her clients to be well taken care of. She wants this to be her life-time career so when she opens her practice, she sets her rates high and offers three sliding scale spots through Open Path so that she can work with the low income families that she absolutely loves.
If you want to learn more about offering sliding scale spots through Open Path you can go back and listen to Episode 5.
Once her practice is full and she is able to easily pay her bills, contribute to retirement, and practice self-care, she decides to raise her rates as well as open up three more sliding scale spots. And because she is making a sustainable income she is able to set aside some time to create on online program that targets the specific needs of her low income clients. She sells it at an extremely affordable rate, so that more of her niche can access the support they need.
From the income of the online course, she is able to open up 3 more sliding scale spots in her practice. She ends up staying in practice for 20 years. She has served countless low income clients through her many years in practice, ever-growing sliding scale spots, and the immensely affordable and supportive online course. I’d be willing to bet that she has served hundreds, if not thousands, of the clients who needed her the most.
So, do you want to serve and make a difference in 50 clients lives and be burnt out in a year, or do you want to serve thousands of clients over the lifetime of your career?
The irony is that by not making your private practice a charity, you are able to do more charitable work. Let that sink in.
As I outlined in episode 0, I’ll be alternating between a fun fact and ‘what I’m digging’ segment with each new episode.
What I’m digging for this episode is MOO. MOO is where I order my business cards and they are pretty sweet if I do say so myself. I’m always getting compliments on their shape, design, and feel. MOO does an excellent job and only produces high quality products. If you want to stand out, you’ve got to get these cards.
I personally order the square cards and the mini cards because they are a bit different and stand out. To order the finest business cards out there visit the show notes page for a referral link to get 25% off your first order. While you are ordering, be sure to add a free sample pack so that you can experience many of the products that MOO has to offer.
Thank you so much for joining me today on your private practice journey.
For episode 10 I’ll be encouraging you to do what you want in your private practice. Whenever I say this I imagine Cartman from South Park saying “Whatever, I Do What I Want.” And by the end of the episode my goal is to have you saying it too.
Join me over on Instagram @mountainpracticejourneys for helpful information and tips for your practice.
And, if you’ve been enjoying the show please take a minute to rate and review the Mountain Practice Journeys podcast over on Apple podcasts.
There’s no way you can know how much it means to me that you choose to join me here as I share all things related to private practice. Please subscribe so you don’t miss a step. For more information about this episode, please visit the show notes page at mountainpracticejourneys.com/podcast I truly appreciate you Trailblazers. Your mountain is within reach. Journey on.
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