When is the best time to raise your prices in private practice?
The best time is completely dependent on you. I know you probably don’t like that answer. Yet, take a deep breath. In and out. This is your private practice, and you are on your own unique journey.
I want to share with you key areas to explore when you are deciding to raise your prices in your counseling business.
Education and Skill Development
Having a license means that you are required to engage in continuing education. Consider how much additional training you have accumulated since you started your practice or set your private practice fees. For instance, if your original fee was $100.00 when you first started. And you started your counseling business with an associate-level compared to today, holding full license status. That’s a big difference. Having this shift gives you space to build confidence in knowing that you can raise your fees considering the growth in education and skill development.
Market
- What does your market area look like?
Consider taking about an hour to engage in market research focused on all the private counseling practices in your area. Take time to identify and find the professionals who serve persons similar to those you serve. For instance, if you are an LPC that serves couples. Take time to find other LPC professionals in your area that serve couples.
During the research identify their fee. You can use the data found to make an appropriate decision. I’ve found myself providing consultation to several clinicians who set their fees at a rate of, for example, purpose, let’s say $40.00. The clinicians originally set their rates without engaging in market research. After taking the time to review the market, we found that they were substantially lower than the market. We increased the fee in order to balance the practice with that of the market area.
Communicate with Integrity
I strongly recommend that counselors educate their clients and community with updates. An update can be that the practice is closed due to snow or in this case that fees are changing. A simple yet powerful way to do this is by sending an email to the clients you currently serve and updating both the intake documents and website with new fees.
The current clients and perhaps referral partners are the only persons who would benefit from education on the shift in the fee. The education is conducted to highlight that you are operating an honest practice. The email can include key reasons that you are increasing your fees, the expected date that the fee will be increased, payment plans that may support the increase in fee, and the fee itself.
Not too long ago, I worked with a couple that owned group practice. They raised their fees without sharing them with their current clients and found that over half the therapists on staff experienced a strong reduction in their caseload.
I share this with you as a key point of reference. Sometimes we can evaluate why we want to make changes in our business while forgetting that others can’t read our minds. The couple who owned a group practice developed a methodology for why they increased their fees. It made perfect sense. Yet, there was a gap. The clients showed up and noticed that they were being charged a few more dollars. At the end of the day, the simple action of educating those we serve goes a long way.
Business Logistics
Increasing your fees can be connected to the backend of the business. For instance, if you are renting an office space and the landlord decides to increase rent. This shift may require you to identify how you are going to stabilize your practice. One way of doing so is by increasing your fees. Again, the recommendation here is to educate your clients and referrals prior to updating the fee.
Private Practice Goals
About a month ago, I held a workshop for counselors in private practice. It was focused on marketing a private practice, utilizing passive income to generate additional income as a means to level up their business and lifestyle. One of the key areas that we focused on included that of developing and meeting private practice goals. I’ll share an example so that you can follow along.
During the workshop, one of the clinicians shared their goal of wanting to shift from renting their office space to purchasing their own property. This was an awesome goal! I certainly was all about it. The shift to owning your property would level up both the business and life of the clinician. The clinician would be able to earn additional passive income by leasing out the additional office spaces in the commercial property that they own while continuing to operate their private practice.
We then focused on how to make the goal possible. I shared with the clinician varying ideas. One was to increase their fees. The reason I recommended an increase in fees what to showcase the impact of numbers.
Let’s say that you charge $100.00 an hour while working 30 hours per week.
In one week, you earn $3,000.
There are 52 weeks in a year, so that comes to $156,000.
Now let’s consider a $15.00 increase.
That would shift you from $100.00 an hour to $115.00.
With the $15.00 increase, the total in a year comes to $179,400.
The difference between the two is $23,400. Now that’s pretty wild right! From a simple $15.00 increase you are earning $23,400. I shared this with the clinician. Today, the clinician is moving in the right direction and hopefully will soon have the cash flow to purchase their commercial property.
You Are Struggling In Your Counseling Business
- Are you struggling to pay your bills?
- Are you having a hard time covering the overhead? Expenses like rent, license fees, and so forth.
You can, of course, add more clients to your caseload. Yet, this is not always the direction that I encourage clinicians to take. My first question to you is to identify the number of people you can see a week while feeling that you are showing up for them and yourself. When clinicians pack on too many clients, I often raise an eyebrow with a focus on concerns connected to burnout. An additional reading to help is, leveling up your counseling practice. I personally found myself at one point seeing too many clients.
The clinician and helper in me wanted to help everyone. I remember at one point; I would be at home with my wife and fall asleep during conversations. She wasn’t a fan of that of course. My shift came when I realized that I was falling behind on showing up for those I serve in the way that I felt I should. Instead of adding more clients to your caseload, my thought is that we should revert back to a grounding question.
The question is, what is the number of people you can see a week while feeling that you are showing up for them and yourself. At the end of the day, I want you to end your workday and have the energy to show up for yourself and those you love. I honestly think those we serve desire the same from us.
If you are struggling to pay your bills, it may be a good time to raise your fees. Of course, first, take time to build your caseload to the appropriate number of clients. For instance, if you have 5 clients on your caseload and your ideal number is 20. First work to get to the 20 number. If you get to the 20 number and are struggling to pay your bills, then shift to increasing your fees. In the point above, I shared the impact of a $15.00 difference in fee. Consider what number you need to increase to in order to find stability and growth in your business.
We started the conversation with the question, when is the best time to raise your prices in private practice?
I hope that you have found clarity and direction in this reading.
If you are ready to start consulting, I would love the opportunity to help you level up your life and private practice.
Hi, I’m Juan. My wife Elizabeth and I started our journey right out of grad school. We love helping clinicians move forward and navigate challenges in their journey of building a counseling private practice. Learn how to build your ideal private practice. One that allows you to live your best life while providing a beautiful service.
