Stacey Steinmiller of Authentic Self Counseling has been a part of the Abundance Practice-Builders Group for what feels like forever. She’s been an incredible support for folks and it’s been awesome to watch her practice grow from across the internet.
Stacey had an “ah ha” moment around fee setting and I love this perspective as an addition to the many ways we can go about deciding what to charge. Hopefully this is helpful for perspective! Here’s Stacey:
Math Makes Fee Setting Fun
Setting fees for your service is a stressful experience to say the least. I know I have struggled and continue to struggle with this. I have read different mindsets on the matter in trying to figure out how to set my fees, live the life I want and have clients willing/able to pay. This is particularly stressful when you are in a self-pay model such as myself whereas taking insurance your fees are set for you.
I knew I needed to change my mindset around this money thing in order to feel comfortable charging my clients for my service. I know I’m a therapist, but part of my being is a mathematician and I like numbers. They are safe, unwavering and don’t lie. Sometimes when I am struggling with a concept, I turn to numbers to help me out.
I really wanted to know the financial investment my clients are making or being asked to make and the impact that has on their lives. I read one of Mari Lee’s blog posts about fee setting and she used a percentage of someone’s salary to bring home a point the investment the person would have to put in therapy. So with that sparked an idea and I started googling income in my area…
I’ll start with Rochester, because that’s where I live 🙂 Our median household income is around $53,000. If I charge $100 a session (easy for math purposes) and that person comes to therapy biweekly for one year, the investment is $2,600 in that year (probably less because you go on vacation, holidays happen, etc, but just stick with me here). Percentage wise if that person makes the median household income, then he/she will be investing 5% of their salary!
I don’t know about you guys but THIS was really helpful for me. 5% of someone’s salary on psychotherapy which can stop their emotional suffering, improve their relationships, increase life satisfaction, lead to promotions and themselves making more money, being a healthier person…. Hmmm 5% for all that seems like a good deal to me!! THIS was the magical thing that allowed me to feel good about my price price point with my population and the service I was offering.
Doing the math also allowed me to have a set number to figure out the whole sliding scale thing! Prior I was just using a sliding scale to get people in the door. I later learned this was bad business practice and frankly unethical. Opps. Now I feel comfortable talking about my fee, the investment the client is making, and have criteria that needs to be met if someone inquires about a sliding scale. (This results in less “ummmms” and “uhhhhs” on the phone). Also, pair this info with Allison’s new scripts that you all bought and you’re golden!
The other important thing for me was knowing my clients investment as it relates to the city they are living in. Wages and cost of living are different from city to city. A $2,600 a year therapy investment is 5% of your median household income in Rochester, NY but it is 6% in Asheville, 4% in Salt Lake City and 3.5% in Seattle. This demonstrates why people in different cities may be charging different rates, based on the cost of living and wages.
Your clients might be spending 8% of their salary or 15% depending in their income and your rates. There is no rule as to what percentage a person should pay for therapy and people could pay more or less or come to therapy more or less often, but the point is doing this research and math might help you in your fee setting journey and understanding what your client’s willingness and ability to pay your fee might be.
Thanks math! I also wrote this blog post and put it up on my blog and linked it near where I have my rates so my future clients can see how awesome of a deal they are getting to check it out click here.
Oh, so you might be asking how I did the math. I don’t want to sound patronizing so if you’re like, “Stacey, I know how to find percentages,” then you don’t have to read this part. If you’re like “I don’t remember 7th grade math that was a long time ago,” then I’ll fill you in!
I use the trusty equation of “percent times total equals part” (% x total = part)
(It was how I was taught as a young lady. I know other people use different means of doing this but that’s what’s stuck in my brain).
Let’s use Asheville’s numbers because that’s where Allison lives.
So we fill in the equation % (this is the unknown) x 45,000 (median household income according to Forbes.com) = $2,600 (or whatever your fee is times weeks that you suspect you’ll see your client in a year).
Now to get the % alone on the equation we must divide 45,000/45,000 =1 and the other side we divide 2,600/45,000 = 6%
If you’re paying attention you’re gonna be like, “but I got .05777!!! What the shit!” Good. As you also remember you must multiply your number by 100 in order to get a percent (i.e move your decimal point over 2 spaces so you get 5.7 which I rounded up to 6%).
If you’re still confused just be like “Stacey I live here – this is my rate” and I’ll just do it for you. Or ask Siri, she might be able to do it for you. Or use whatever method you like. I know my mom does it differently when we are shopping and she is determining the best deal! And I’m sure these common core peeps do it in a way my brain may not be able to comprehend.
Now that you completed your math lesson for the day, I’d love to hear your thoughts on this. I’m in no way saying this is something you have to do, but rather it is just ONE tool to help you out on this crazy journey of private practice.
Allison Puryear is an LCSW with a nearly diagnosable obsession with business development. She has started practices in three different states and wants you to know that building a private practice is shockingly doable when you have a plan and support. After retiring her individual consultation services, she opened the Abundance Party, where you can get practice-building help for the cost of a copay. You can download a free private practice checklist to make sure you have your ducks in a row, get weekly private practice tips, listen to the podcast, hop into the free Facebook Group. Allison is all about helping you gain the confidence and tools you need to succeed.