If you’re a mental health provider, grad school taught you all about how to be a clinician. You learned to diagnose and treat the seemingly endless variety of ways in which we humans make a mess of our emotions and those of our loved ones. Then, you learned how to implement all that knowledge in a clinical setting through supervised therapy, learning from teachers, supervisors, and mentors, perfecting your ability to provide therapy. What you probably did not study nearly as much (if at all) is how to run your practice as a business. One aspect, the one that determines how much money your practice brings in, is setting your rates.
Therapists Are About Giving; Charging Money? Not So Much
No matter your degree, you chose to become a therapist because you care about people; you want to give, to help. I know this firsthand because my wife is a Marriage and Family Therapist, and that describes her to a “T.” One result is that when trying to figure out how much you should charge, you probably agonized over making it “fair,” fearing that if you charge too much nobody will come through your door and that even if some people do, many others won’t be able to afford it. That’s what happened when my wife first opened her private practice, she tried to intuit the “right” rate, looking at what other providers charged in our area. After working with a marketing coach, she more than doubled her rate. Guess what, people continued coming in through her practice door, and her take-home income increased dramatically!
The Problem with Setting Your Rates too Low
They say that familiarity breeds contempt. From my experience, this is why most of us have a tough time assessing the value of our own talents and knowledge. Your expertise and experience make therapy seem to you like water to a fish. You probably don’t realize any more how much you know about helping people – It’s all transparent to you! No wonder that you have a hard time charging premium rates for your services.
This reminds me of a story (true or not, doesn’t really matter) about Pablo Picasso. The famous artist is sketching in the park when a woman recognizes him and asks him to sketch her portrait. Studying her briefly, he creates her portrait with a single stroke of his pencil. The woman is ecstatic, “Amazing! You captured my essence with one stroke! Thank-you! How much do I owe you?” His reply, “Five thousand dollars.” The woman sputters in shock, “F-f-five thousand dollars?! It took you seconds to make this sketch! How could you ask for so much money?” “Madame,” responds the artist, “it took me my entire life to make this sketch!” The moral of the story is that similar to Picasso, you’re not simply selling the time spent with your client. You’re providing incredible value that’s only possible due to your many years of study and experience!
If you set your rates too low out of fear that clients won’t come, if you try to guess what they’re willing to pay, or if you charge what most of your colleagues charge, you set yourself and your clients up for a bad outcome. You may be forced to take on far more clients than you can serve at your best – some clinicians I know see 8, 10, or even 12 clients per day! If that describes you, then you know how burned out you get by the end of such a day. Can you honestly say that your last few clients on such a day experience the same attentive and empathic therapist that the first few clients saw that morning? If you set your rates too low and don’t make it up through sheer volume of clients, your income will suffer and you may be forced to shutter your practice, depriving your clients of your services altogether.
Set Your Rates like a Business Sets Prices
A while back, I surprised, not to say shocked, my web-hosting guy. I told him I want him to make a good profit on me. What? As a customer, I’m supposed to try to get the most goods and services out of businesses for the least amount of money, right? Why would I want him to make a profit on me? Simple. If he doesn’t make a good enough profit, he’ll go out of business, and I’ll have to find someone else. Someone who may not be anywhere near as good at what he does, or as responsive. You see, there are real costs, both monetary and other, to having to find a replacement who may not be as good. I’d rather pay more now than suffer those greater costs later.
How about your clients? You’re the person they trust to help them with their most intimate thoughts, feelings, and relationships. Don’t you think they want you to be able to afford to see only as many clients as you see at your best? Or do you think they’d rather save a few bucks and be your 10th client of the day, at which point you’re so drained that you have a hard time listening to them, let alone remembering the details of what they told you last session or the one before?
The bottom line is that you need to think like a business owner, because as a solo practitioner that is exactly what you are. You need to set your rates based on the income you need, your business costs, and how many sessions you can take on without burning out. My free worksheet helps you do exactly that.
But What About Those Clients Who Can’t Afford Higher Rates?
The answer is two-fold. First, you aren’t (and can’t be) the perfect fit for all clients. This applies not just to therapeutic rapport, but also to your rates. Some clients may be unable or unwilling to pay your rate, in which case they’re free to find another therapist who charges less (perhaps that therapist has lower costs, or doesn’t need as much income). In fact, you can offer to refer them if you know such a colleague. Second, setting your rates higher doesn’t mean you can’t reduce your rates on occasion. For example, it would be perfectly reasonable to accept a request from a current client who suffers a major financial challenge and asks for a temporary reduction so he or she can keep seeing you. I’d just recommend that you specify how long the reduction applies, whether in weeks or number of sessions, after which you can reassess.
What’s your experience with setting rates? What do you think about this post and/or my free worksheet? Please leave your feedback below. I promise to respond to all (relevant ) comments and questions.