3 Major Milestones
There are 3 major milestones at which you should evaluate your fees and consider raising them. But there are other considerations you should be aware of, including some options on how to raise them and how to get comfortable with that new number.
#1 The first milestone is when you realize you set your fees without using math. Typically this is when you learn that your fees shouldn’t be based on the fees you see around you. This is by far the most common way people set their fees; they look at their colleagues and choose something that looks about average. They charge a bit more than insurance pays.
The problem here is that you are doing just what your colleagues did and NONE of you considered your mortgage or retirement or the vacation you want to take to keep yourself fresh. Insurance certainly never considered your life expenses, they’re going to pay the least they can get away with and still have providers.
The amount you’re charging may be enough for that, but if you didn’t do the math to make sure, then I strongly suggest you get on that. Tiffany McLain has a calculator you can use at heytiffany.com. It’s free, so go for it. Most people realize they need to raise their rates when they do this. I always recommend Inner Circle folx do this exercise and then we spend some time working through the discomfort that often comes up with raising fees. More on that in a minute.
#2 Another time to consider raising your rates is when you’re full. Let’s say you’ve already done the work to see what you want and need to get paid per session to do this career for the long haul. Once you’re full, you have proven to yourself that the demand is there. Assess your goals. Life changes. Maybe you just had a kid or want to have kids. Maybe you’re taking care of an aging parent or taking care of a sick spouse. Maybe you’re playing catch up with retirement like I am? Want to put some more in? Do Tiffany’s calculator again. If you see 20 clients a week and raise your rate $10 per session, that’s almost $10K more you can put in retirement per year. $10 increases aren’t something clients are likely to balk at and that’s a lot more peace of mind for you for your future. You may find your fees just fine where they are. But you have to do the math to know.
#3 Many jobs give annual raises. Or so I’ve heard. The jobs I had occasionally had the money to give cost of living increases to employees. Consider the kind of employer you want to be. If you give yourself annual raises, I recommend that it always be the same month, that you put it in your financial agreement that you increase your rates every January or June or whenever. And that you let any new clients you bring in in the previous 2 months know in that initial phone call.
I want you to follow the agreements and consents you have clients sign to the hilt. You expect them to, so you should, too. That means not putting that in there and then feeling weird about it. I wouldn’t put the amount that you raise your rates b/c that may change year to year. It may be $5 one year and $25 another depending on your circumstances.
Some folx keep current clients at their initial fee and increase rates only for incoming clients. Some raise it for everybody at once. Some step longstanding clients up over time and raise it for new ones. It totally depends on your practice.
Regarding how to get comfortable with your new fee, know that it takes time. Every time I have raised my rates I’m squirmy about it in my head for a while. Then I get to the place where I can say it out loud but I always cringe a little internally the first few times. Then it’s just what I charge… it feels normal.
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