Our Guide To Setting Your Therapist Rates
Are you happy with your rates? Do you know it’s time for an increase but worry about losing clients? Do you — and please be honest — actually believe your value is not worth the investment?
Setting therapist rates can be a tricky business. Many therapists find this task difficult, for a variety of reasons. So in this article, you’ll learn how to set private practice fees in a way that is congruent with your values and serves your life.
How to set private practice fees
First, appreciate that profits are a necessary part of sustainability. A sufficient income is required to afford your rent, to entice and keep a great team, to attend conferences and keep up-skilling, to market so you can reach those who most need your expertise, and to lead a quality of life that encourages clinical longevity. If you go out of business, you serve no one.
Second, do your research! What are other therapists in your area and/or practice niche charging? Remember that this is the range you’ll want to be competitive within.
Third, set your prices with consideration and strategy. Ask yourself questions like:
- What are your monthly expenses? How much money do you need to cover your costs?
- What income would you like to earn: What is your “I’m contented” number?
- What would you like to achieve in your personal life? For example, how many weeks of holiday would you like each year?
- How many clients would you like to see each day? How many sessions would you like to work per week?
- What are your unique abilities? Skills? Areas of expertise?
- Do you offer (or plan to offer) telehealth consultations? Or are you a face-to-face practice? If you consult in a low sociodemographic area and operate solely in person, you may need to consider this in your fee structure. Tip: If you’d like to know the average basic finances in your local area — like median household income — check out this free tool.
- Do you have — or will you develop — a marketing plan? This matters greatly. If you position yourself as the leading expert for a specific condition, price isn’t as relevant. You will have ample leeway to set pricing based on your needs and desires. If however, you are, in essence, a commodity — if you don’t have a good marketing plan — you might be stuck with the usual advice of “see what your competition is charging.”
Let’s look at these questions in more detail…
What are your expenses?
The first consideration is your capacity to meet your financial responsibilities because if you don’t cover your costs, you will be out of business quickly. That helps no one.
Add up your expenses. For example…
- Association memberships
- Legal and accounting fees
- Marketing (business cards, HIPPA-compliant email, and website, networking events, online directories, signage)
- Office equipment
- Phone and internet services
- Practice management system
- Staff wages
Many people, myself included, believe you should include your personal income here as well.
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How many clients would you like to see per session or per week?
Consider the number of clients you’d ideally like to consult with per week and build your schedule accordingly. Some therapists prefer to work only 3 longer days of the week, while others might prefer spreading those hours out between five days.
Understanding the number of clients you prefer to see will help you set appropriate rates.
What income would you like to earn?
By knowing your desired income you can reverse engineer your therapist rates.
You’d like to earn $100K per year working 46 weeks annually. That means you need to earn $2173.91 per week. If you’d like to see 20 clients per week, that works out to $109 per session.
Or maybe you’d like to earn $200K per year working 46 weeks annually. That means you need to earn $4348 per week. If you’d like to see 20 clients per week, that works out to $217 per session.
What would you like to achieve in your personal life?
Do you want to be present for your family? Pick your children up from school each day? Spend quality time with your aging parents? Or have a weekly date night with your spouse or best friend?
Or are there events or experiences you’d like to have? Places you’d like to visit. Hobbies you’d love to enjoy. Health classes you’d like to take.
Consider these as you plan your therapist rates.
This might sound shocking, I get it. But, yes, you are allowed to include your non-professional desires when setting fees. After all, profits are part of what empowers you to live a well, happy, and fulfilled life.
What are your unique abilities or your area (or areas) of expertise?
Consider how to set private practice fees in relation to your unique abilities and your area (or areas) of expertise — your niche.
See, what you do, the results you can achieve, and the expertise you hold should be determinants in the rates you set.
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I’ll quote from our article, Find Your Mental Health Niche to Supercharge Practice Growth, to bring this point home…
First, pretend you have a brain tumor. Will you turn to a family doctor for treatment or a neuro-oncologist? Will dollars be the determining factor in who you consult or their expertise?
Second, imagine that you develop depression. Would you prefer to see a therapist who specializes in this condition — an expert with a vast depth of knowledge, expansive training, and condition-specific experience — or would you seek support from an unqualified neighbor?
People are (usually) interested in the best care they can afford. Particularly regarding mental health and emotional problems; challenges that can detrimentally impact every aspect of life. If current and potential clients have a strong, valid reason to believe that you are the best therapist for them, budget becomes less of a deciding factor.
So, be ever-evolving; continually work to improve your skills. Become an expert in a niche. Then absolutely incorporate your uniqueness into your therapist rates.
Do you have a marketing plan?
Effective marketing allows you to rapidly establish your credibility as a niche thought leader. This marks you as “the” expert in your field. Instead of the plod of a referral-based practice, the right marketing approaches will explode your reach, impact, and elevate your rates.
Looking for more super-charged marketing tips?
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Given the opportunity, do you believe people would happily pay well to consult with the likes of Laura Kauffman, Steven Pinker, or Jordan Peterson?
Love them or loathe them, people love celebrities. The right marketing plan will supercharge your status. You, too, can achieve niche-specific celebrity. Celebrity that persuades and, yes, earns you a higher income.
Tip: Our therapist websites and resources are crafted to harness the power of marketing and elevate your success.
The therapist rates takeaway
I trust you now feel more confident in answering the question: How to set private practice fees?
Remember, select your rates strategically. Start with your end goals in mind. Consider your desires for both professional and personal success. Pin down your niche. Then market and work to make your dreams come true. You deserve it!
P.S. Want more information on setting and raising your therapy rates?
Therapist and business owner, Julia Smith, MEd, RCT, CCC, shares her best tips on our Fall Into Cash Podcast episode, Setting and Raising Your Rates Ethically For New And Current Clients.
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