Business - Understanding Your Value and How to Market it - Your Fee Schedule

Those who are starting a new private practice might have difficulties setting the fee schedule that they will use for their clients. There are several factors that will help to determine this.

1. Your Local Market - You will need to do some research for your community or area. The cost of living and number of services available all affect the demand for services you provide. Not everyone will be able to afford you and it is therefore important that you know the free public or low-fee services which you can use for referrals.

2. Your Competition - There may be other professionals who at first glance appear to offer similar services to yours. Those who state that they provide "counselling", for example, differ greatly in their training, professional designation experience. You need to consider this as well as the comparative effectiveness of your services. Many people who state that they are "therapists" may not get good results or not be considered by the clients as being "helpful".

3. Your Self-Image - I was a Social Worker before I trained as a Psychologist and therefore had been used to working in the public sector. I found it difficult at that time to go from $34.00 per hour salary to $145.00 per hour fee base. My Business Manager asked me a number of questions about what i had to offer the clients and we agreed that I would set the $140.00 rate for the next three clients. They all accepted this without question. I had studied for a number of years and invested a great deal of effort into my preparation for private practice. I guess I just hadn't grown into the professional role yet. Since then, I have become more comfortable in charging an appropriate professional fee that recognizes the value I provide.

4. Your colleagues (the fees of other professionals with whom you collaborate) - One day a while ago, my son asked "How many years of education does the lawyer who is upstairs in your building have and what is her rate per hour?" My answer was "She has a four year degree and charged $350.00 per hour". He then asked the same thing about my situation and I replied "I have eleven and a half years of education, the same number of years of experience and charge $160.00 per hour". We were working with the same clients at the time and I was providing good value for them at less than half the fee. Sometimes you need to look around the community and determine your value in comparison to other professionals.

5. Your Financial Goals and Needs - You will need to calculate all of the expenses to operate your business and the number of billable hours that you are planning to work in order to set a fee that will meet your income goals.

6. Your Professional organization - A recommended fee schedule usually states the hourly rate that a newly-registered professional can use. You will need to adjust this based on the above factors and any specific expertise that you offer.

Setting your fee schedule can be difficult. If you are approached to sign a contract for referred clients, you will likely be offered a lower rate and may choose to take it in exchange for the guaranteed business.

At times, I have wondered if people would be willing to pay my fee if I raised it. My concerns were unfounded and I was quite surprised to learn that some people believe that the more they pay, the higher the quality they will receive.

We need to remember that people choose to have their needs met in different ways. Whether it is because of economic status or personal preference, society provides different options to accommodate this. You can, for example, have your hair cut for a few dollars or a few hundred dollars!

Finally, you need to remember that some clients have Employee Benefit Plans or Health Spending Accounts that will cover part or all of their fee. In my practice I do not offer pro bono (free) services. I do good referrals for quality services and ensure that I use a share of all my profits for philanthropic purposes.

Determining your fee schedule is an adventure that will require thought and flexibility as you refine the process for both present and future work.