Today, Joe Sanok speaks attracting your ideal clients, part 3 of 5, how to set rates.
In This Podcast
NOTE: This podcast is for people who are currently growing their practice.
How To Set Your Rates
You need to understand your worth and stand firm on that. This is the starting point of your setting your rates. You also need to work on having a healthy money mindset.
Think about the kind of life you want to live when setting your session rates and include all the necessities, i.e.: insurance, marketing budget, etc.
Work backwards from your annual goal of replacing your agency rate.
Survey locally and see what other practices, in the same range, are charging.
Raising Your Rates
I believe, everyone should be raising their rates throughout the year for new clients. As soon as I get really busy, I raise my rates. I don’t, however, raise my current clients rates until the end of the year.
Ideal client webinar: http://www.practiceofthepractice.com/idealclient
Previous podcast in this series: http://www.practiceofthepractice.com/session214
Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners that are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
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Pop 215 Ideal Client 3 Of 5 How To Set Rates[0:00] Attracting your ideal client to fill up your ideal practice is the essential component to growing a successful practice,
if you are ready to grow your practice more on should head over and download my free webinar are it’s over at www.practiceofthepractice.com/idealclient,
we’re gonna get is gonna get the exact methods on how to grow your ideal pe. [0:26] Through attracting your ideal clients so they can be full and that you can grow exactly how you want to again that’s www.practiceofthepractice.com/idealclient,
we would love to have you connect with us through that weather. [0:38] Music. [0:45] This is the practice of the practice podcast with joe santa session number two hundred fifteen. [0:51] Music. [1:01] Pull out your calculator spokes today we’re going to be talking all about how to set your raise and i am so excited about this all i’m so excited. [1:11] I have long really not that i cared about money but as a little kid i.
I was such a saver and if you guys remember the show family ties.
But my grandma would always call me alex because alex p keaton michael j fox is character because i had a lemonade stand when i was five an unemployed like.
Eight of the kids in the neighborhood have working so i can go like in the house and the money would keep coming in. [1:43] But i didn’t realize how expensive it was to the people working at a lemonade stand. [1:51] Yet so money and me we’ve had an interesting relationship i definitely of my parents taught me receive a lot.
And for a long time it was i had a hard time even reinvesting in the business and understanding are lying had such a bootstrapping mentality that i didn’t understand how to scale.
Based on using other people’s time and so for me it was really hard for a long time,
to invest in a website designer invest in some making my logo investing having people to outsource things to,
but in one when we get to in the future maybe a serious are people that are at that hundred thousand dollar can a year the one a scale.
That phase of scaling really it’s all about reinvesting material be talking about how to set your rates and if so important to think about our own money issues and our own sense of worth.
As we talk about the conversation one of the most frequent questions i get from people or chemicals i got from people and we are pretty consulting conversation.
Is [2:54] I don’t know what i’m worth i second guess myself to much and so and people on schedule that time to meet with me to have a strategy session.
It’s just like.
They really like beat themselves up over not knowing how to set their rates and its normal like we went to counseling to help people to change the world to improve a lot of issues that.
Musta really doesn’t care to help fix and instead we get to help people through trauma and through foster care and through abuse and through all the heavy things that we get to help people with.
And then to say yeah you gotta pay like sometimes really all but.
That’s just kinda weird so i don’t talk a little bit about my journey and then we’re gonna talk about some strategies on how to figure out what you’re worth.
It’s a dvd work through some of that money mindset and that money shame they’re gonna talk about how to raise your rates and a regular basis and why that’s really important as well. [3:52] So let’s think about a little bit about my journey so when i first launched mental illness counting traverse city was two thousand nine i moved up from kalamazoo and kalamazoo i worked at a group practice as a ten ninety-nine.
Without insurance it wouldn’t talk about network benefits in the next one i decided to traverse city that i wasn’t gonna be on insurance,
and also because the insurance companies decide that for me they didn’t have any openings in so i didn’t get insurance panels.
So i didn’t know that there was even like this world of people that were doing private pay i just can’t i won it wind it.
Seems like the past tense of winning should be one cuz ring is round so i won’t.
It’s so i said well he let me look around see what people just have that their paying for out of network are for private pay.
Eighty dollars was the going rate in traverse city.
The officer seventy dollars and see how that goes i got a handful of clients i have a full time job as a foster care supervisor at this agency and then i got a job at the community college so is making a little bit more money.
Always got pregnant and so she wanted me at home more and i do wanna be working evenings.
It actually worked out really well because we started taking this water aerobics class that was every tuesday and thursday.
Before i really didn’t think about what schedule i wanted it was just all a work late i’ll all you don’t see people nearly see people and so sometimes i’d be in the office till he or nine o’clock at night. [5:26] After doing my for full time job and.
Buy a can setting that boundary showed me that i can create the life that i want news great because i monday’s wednesday’s are see clients and tuesdays and thursdays we go to water aerobics and then i have the weekend.
And if i reset the scanner ideal life for myself at the time but then the baby came a little beautiful baby girl.
And i realize like i don’t wanna be working for seventy bucks an hour and say i raise my rates and then over time reasoning write some more and people kept coming in they raise their rates and each time i raise my rates i would actually get more clients.
And so i realized that for years i have been under valuing myself and as a built a local reputation people were willing to pay for.
So let’s look a little bit at some strategies of how to set your rates for private paper actors.
So the first way to do it is to start working backward from your goal.
Say your goal is that you want to leave your full-time job and you make say fifty thousand dollars a year at some agency job.
And you know that you are wants to say that’s pretax fifty grand let’s add an extra like twenty that was at thirty percent to that,
for some expenses and for me so healthcare things like that so we’re gonna multiply that times one point three,
so that’s gonna bring up to sixty five thousand dollars a year.
And see your current job gives you two weeks off of a year and then you also give me a week of sick days to three weeks a year so we’re gonna divide that by forty nine weeks. [7:05] If you don’t apples to apples comparison you may say you know what if i’m doing this i’ll have four weeks off your five or six or seven.
I work i don’t have the extra money to put into the marking that’s where you can change some of these numbers so that brings us down to the need to bring in one thousand three hundred and twenty six dollars and fifty three cents per week.
Say you said you know my ideal schedule is i wanna work forty hours a week for in just divide that by four.
Seven meeting at three hundred and thirty-one dollars and sixty three cents.
Per day for those four days and you see yourself okay i really want to just do four sessions a day i feel like that would be the healthiest so we’re going to divide that by four.
So that brings us and at eighty two dollars and ninety one cents per session now you guarantee gonna have that many sessions no i would bump that up by at least twenty percent or so so maybe start at a hundred dollars per session using that formula.
No you don’t wanna look at how much is rent in your area how much is health insurance to have a little bit clear number so if we took that a step farther we were just looking at replacing with that okay i wanna make eighty thousand dollars a year.
And i know that rent in my area is gonna be probably lisa thousand dollars a month for the kind of place i want so we’re gonna add twelve thousand dollars.
And maybe you are buying insurance you through the marketplace and so you can get a healthy can i have a plan for.
Maybe thousand bucks a month of the kind of amp that up a bit maybe won’t be that much but.
Give yourself some wiggle room and maybe you know we also give yourself like if there are five grand a year for some marketing website things like that. [8:44] So that brings in a hundred nine thousand dollars you need to bring in now let’s brainstorm okay with the kind of life i actually wanna live okay i wanna have.
At least four weeks off when taking month off so we’re gonna divide that by forty eight weeks.
And then diving the summer two thousand two hundred and seventy dollars and eighty three cents per week i divide the pilot say working four days a week. [9:06] And i want to see what may be for people a day so that’s five hundred sixty seven dollars and seventy one cents for people at a.
Everything at one forty one ninety-three and so you can see hope working backward from your annual goal,
of replacing your income in your agency job of helping the amount that you are really tells you a range of what you need to be charging,
based on your lifestyle choices so then you can say okay i just wanna work three days a week but i’m willing to ten sessions a day.
But are you gonna have ten sessions a day some of you will some of you while.
Set formula working backwards really great way to have a range of talking to someone recently that said how much they want to make i think that they want to make hundred and fifty thousand dollars this coming year.
They’re happy with their current lifestyle but they went just have to be a little bit more question have a little more saving save up for their kids college,
will we get the numbers it was clear that they need to raise their rates by about ten dollars and so will talk how you raise your rates and it was just like a small jump for them but.
We didn’t experiment where that next week that person whenever they got a new intake they’re gonna try the new rate of it was one seventy five and twenty five. [10:20] And see if they lost people from the first three and the first three people all said yes to the rate and they’re like why and i do this sooner.
So that’s a really great way to have extra not to use your exactly how to do this working backwards from the goal.
That’s one of one great waited to really can set your rates another one is to kinda survey locally.
Look at what people are charging so if you are in that thirty thousand dollars two hundred thousand dollar range where you’re still growing so you’re not starting out bootstrapping be your starting to really grow be not quite scaling.
Well what is where people in that range charging i think its good to have that knowledge but i wouldn’t be set on that knowledge.
If you look at our rates at mental illness counseling depending on the condition where to three times more than the going rate in our area and we stay fall.
And so that’s really important to realize that your quality at your reputation the motor on the media your branding,
all of that is gonna building image more and more of how much you can charge in and day five or talk about environment and vibe a little bit.
So looking like we can help with me also wanna look at evaluating your stress how many days a week do you want to work do you want to pick up your kids every day from school and also at the end of the day be able to just.
Be done with it so you have to schedule in time for email and things like that in the days that you work. [11:44] Alright so those are couple techniques that i use in looking at how to set your rates next let’s talk about raising your rate. [11:52] I really believe that every year people should be raising their rates throughout the year for new clients and i know there’s a lot of different ways that people look at this i had monocle either in episode was that like,
thirty it was a long time ago and she said she wants everyone to always have the exact same rate that’s great if that’s what you want then do it.
For me at throughout the year i keep raising my rate for new clients and then at the first of the year i try to line people as close as possible as i can.
So what does that look like well i look at my schedule and i say.
Well i’m really busy it’s time to raise my rates it’s literally that simple i then have my intake coordinator quote those new rates for me update psychology today update the website and we’re good.
You know i was up workers to have it on there too and then in michigan yo your professional disclosure statement has to be updated each time to,
do you wanna make sure you’re doing that on a regular basis because as you get more full you want to keep the momentum of them all you have to re invest in the business the more that you can keep leveling up your game.
No i don’t raise my current clients rates until the first of the year.
That’s because i don’t want people to keep telling me every six months just that reason is rates and i came in knowing that this is my rate was so if someone came in at seventy five there is a twenty five minute to twenty five,
they’re gonna keep every became and that of course is some kind of paper to keep track of their. [13:23] And then in october i send a letter to all of my clients and i say the current in you know it’s the subject line is open enrollment.
And you’ll say dear joe i really love working with your family we’ve achieve some great things this year during the months of november and december individuals are deciding on their health insurance as you know i’m out of network provider.
But i wanna make sure that you understand that you know it’s a few changes that are happening current new clients are charged.
To fifty per session your current rate is one ninety five.
It’s on the first of the year i would like to move your rate to twenty five a way into counseling in order to help people and solve this affects your family’s ability to come to counseling please let me know we can talk about this right change.
And then i also have some lines in there but if you’re not utilizing health savings account or flexible spending account you might wanna talk to your account in about thirty that up so great with saving pretax money,
and also if you are accessing your out of network benefits make sure as your setting up the exchange are through your employer that you have a lot of network benefits in the coming year.
I literally have never had someone push back on that the mayor said okay we’re gonna come to fewer sessions or more motivated to get out of here or we wanna try to wrap up by a certain time.
But it’s been a motivator for us to try did not come to therapy is much to be independent to be autonomous michael isn’t have thirty clients seen you for years and years and years unless they really need it. [14:55] This is a great way to do that as well as i that annual raise and i also am raising my rates throughout the year.
That’s how you that’s how i set my rates start raise my rates tomorrow we’re gonna be talking all about how to speak.
Out of network benefits is really important that you can articulating this clearly in the walk through code how that conversation goes for the intake coordinator or for you if you’re answering your phones.
Also if you didn’t sign up for that weapon are about how do i checked i don’t claim you got to do this it’s like this podcast just touches the tip of the iceberg,
head on over to www.practiceofthepractice.com/idealclient and you can access that weapon are you can can hear all about how to attract i talked in-depth about difference social media platforms different ways that you can get your id apply to have your. [15:49] Full of your i don’t think so i think so much for letting me into yours and into your brain tomorrow we’re talking out of network benefits and how to talk to potential clients about that have a great day and i’ll. [15:59] Music. [16:06] Special thanks in advance ounces sexy for the intro music in this podcast is design.
Question about the subject matter covered was given to understand the need of a host publisher of gas surrounding legal accounting clinical.
Or the professional information professional time with. [16:22] Music.