Setting the right price for your counseling and therapy services is critical for the success and sustainability of your business. The price is right when it attracts the right type of client, the right number of clients per month, and provides you with enough cash flow to sustain both your practice and your lifestyle.
Let's see 6 tips about how to price your therapy.
The price of your services will impact both your earnings and whether a potential client wants to work with you. When sorting through hundreds of counselor profiles, aside from your professional headshot, the starting price of your services is one of the most evident elements of your listing. User research has also revealed that price is one of the first sorting filters that potential clients look at, deciding (in sometimes a mere split second) on whether they will even consider finding out more about the therapist.
Set the price too high, and your potential client may turn away from your profile and not even take the time to read on any further about your qualifications; set the price too low and your expertise may be questioned and you may be perceived as not being qualified enough to help.
Setting the right price for your services — where should you start?
Sure, attracting clients to your practice should be at the core of your pricing strategy, but this is just one of the many points to consider. As a counselor or therapist, you also need to think about how rare your specialty and qualifications are. Are the sole expert in your field in the world, in your country, in your region?
“Money is one of the more complex issues facing therapists and clients, especially at the beginning of treatment, and many therapists tend to avoid exploring this important topic.” — Ofer Zur
While the fields of mental health, medicine, and wellness have an element of altruism, and attract many professionals that are in the industry because of their passion for helping people feel better, feel happier, feel more satisfied in their lives, a private therapy practice must still be run as a business. And in a business, you as the service provider must help your clients by delivering valuable and quality services. You must also focus on generating enough profit to sustain your practice and your lifestyle.
In a recent survey, 60% of the medical and non-medical providers on the RingMD telemedicine platform cited “growing their business” and “running their business” as their least favorite part of their profession, with many even feeling uncomfortable with enforcing a cancellation policy with their no-show clients.
Overhead costs & administrative budgeting – how much cash flow do you need to survive?
Prior to publishing the cost of your services, take time to budget the amount of cash flow you need to sustain your practice and your lifestyle, then consider the current state of your practice, your ideal future state, and the likelihood of you reaching your ideal future state.
Here are six steps to help you get started with your pricing strategy.
- Budget the amount of cash flow you need to sustain your practice
Take out your notepad or electronic spreadsheet, and document all the costs of running your business, including:
- Cost of maintaining your professional credentials — does your industry require you to pay membership fees to the state or national professional associations?
- Cost of certifications, core, and further education — being a health expert requires continuous learning. Your outstanding student loans and costs of conferences and coursework are all necessary for staying relevant.
- Your online presence, advertising & marketing — do you pay to be listed in a directory, pay for online ads or need to pay for your website domain and graphic designer to maintain a personal website? While listing your professional profiles on RingMD is free, many providers choose to still retain their legacy private websites and blogs.
- Private & practice insurance.
- Rent — whether you practice from home, a clinic or a shared office, each location comes at a price.
- Transportation — are you not running your practice online and need to travel to/from the office or to your client’s home? Make sure to jot down the cost of all those metro tickets, tolls and gallons of petrol.
- Administrative support staff — your accountant, assistant, lawyer, etc.
- Extra & miscellaneous costs — write it out and define it, there are certainly more costs to running your business.
This is a daunting step for many counselors, but it is a critical step to running a sustainable business. Just remember — if you can’t afford to maintain your practice, you won’t be able to help your patients and focus on being present for them.
The Cost of Running Your Practice =
Cost of maintaining your professional credentials + Cost of certifications, core, and further education + Your online presence, advertising & marketing + Private & practice insurance + Rent + Transportation + Administrative support staff + Extra & miscellaneous costs
- Add in the budget needed to sustain your lifestyle
Start with the core— how much do you need to earn to pay off your monthly bills to stay afloat (mortgage, your children’s school, food, car payments)? Then think about your lifestyle and what’s important to you — how much extra income do you need monthly to attend to your mental and physical fitness, buy new clothing, electronics, a new home or travel the world? As you help your clients attend to their personal goals, don’t forget about your own!
- Consider the current state of your practice
You should now have a ballpark estimate of how much you need to earn monthly to live the life you want and maintain your practice. Now you need to conduct a realistic assessment of the state of your business today.
- What is the current size of your client base?
- How many clients do you have right now?
- How many hours do you consult each week? Each month?
- Define your ideal future state
You should now have a ballpark estimate of how much you need to earn monthly to live the life you want, but can the current state of your practice take you there?
Image the life you want to lead and what kind of work schedule you want.
What’s the right number of clients and consultations for you? Being a therapist takes its toll and you need time to recharge as well — how many clients are too many and how many hours can you realistically work each month?
- Basic lifestyle pricing for sessions
Think about the life you want to lead, how much income you need to sustain that life, and then work backwards to figure out the price that you will need to charge per session. Start by adding up your total practice & lifestyle costs, and figure out if the amount that you are consulting with patients can cover your costs with the below formula.
Your Baseline Consultation Price =
Your Monthly Needs (Budget to Sustain Your Practice ± Budget to Sustain Your Lifestyle) / # of Monthly Consultations
- Benchmark your price
Do your research. Search for therapists with similar qualifications and expertise as you, and for therapists proximate to you — what are they charging? Talk to your friends, family and even patients; how much would they be willing to pay for the services you offer? And what does your gut tell you?
What price feels simply too high to charge your clients?
Pricing your services can get complicated quickly, especially because many therapists choose to sell bundled, multiple-session “packages”. Keep in mind that you won’t know how much your patients will be willing to pay you until you try it out.
Reflect, do your research, and test it out
You can always adjust your prices in the future if the current structure isn’t working for you! Read on to find out how to put your best foot forward with a complete an informative counselor profile. Interested to show your skills and expertise off in RingMD's online therapist, doctor and wellness professional directory? Then sign up below, for free.