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The Therapist's Brief Guide to Generosity and Pricing in Business

December 12, 2017 Ili Rivera Walter, PhD, LMFT
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This post is a compilation of past blog content.


Many of us become therapists because we want to help people. When we start a business, we quickly realize that our desire to help and our need to make money are often in conflict. The good news is, we don’t have to choose one over the other--we can generate our desired income and be generous!

In today's post, I offer five brief and practical strategies for incorporating a culture of giving and generosity into your business, while still prioritizing profit through pricing policies and strategic partnerships.

The Foundation of Pricing:  Boundaries

If you own a business, then you are a business owner before you are a therapist. Essentially, you hold a dual role in your business: administrator and service provider. The administrator is responsible for assuring that the business continues to exist, and the service provider is responsible for providing the services that are essential to the business. These two roles cannot always align. For example, the administrator should not make all decisions based on what’s best for the business, because customers will eventually feel unimportant. And, the service provider should not make all decisions based on what’s best for customers, because the business will eventually cease to exist.

The best way to manage each role is to establish boundaries that serve both roles, by allowing for the building of a profitable business and the nurturing of clients. The following strategies establish boundaries that keep the administrator and provider roles in balance.

How to Prioritize Generosity While Building a Business

1|  Market a niche

By marketing a niche, you set very clear, specific boundaries regarding the focus of your business. As you establish your expertise, you are able to set higher rates, and therefore be more generous with your clients and philanthropic in general.

2|  Establish a "lowest fee"

Set a fee that you will not compromise, under any circumstances. By establishing this fee, you allow yourself room to negotiate with potential clients, without betraying the value you hold for your work or your need to make a living. A "lowest fee" will align with your sense of service while keeping you on track with your financial goals.

3|  Offer a sliding scale, or pro bono sessions, with limits

First, make sure that your pricing policy benefits your business. When including a sliding scale and/or free sessions in your policy, do so with specific limits. For example, offer only a certain number of discounted sessions per month, or set a maximum number of pro bono clients for your case load. Once you hit your target number, start a waiting list. This number is, of course, dependent on your number of full-fee clients. For example, if your discount session maximum is 10%, then you should have 9 full-fee sessions for every 1 discounted session. 

4 |  Give away ten percent of your income

Many wealthy people (from Rockefeller to Bill Gates) have been open about their commitment to giving. Giving away ten percent of your income often, paradoxically, leads to more earnings, because it flows from a place of confidence that more will come. In religious circles, donating ten percent of your income is referred to as a "tithe." Rick Warren (the pastor of Saddleback Church, and author of The Purpose Driven Life) is known to "reverse tithe;" he gives away ninety percent of his income. 

In your practice, you have the options of tithing your time, by offering one free session to a client in need for every full-fee session, or by writing a check at the end of the month to your chosen organization. 

5|  Establish strategic partnerships with non-profits

Partnering with non-profit organizations can be a win-win, because it offers networking opportunities for you and special perks for the organization. Here are a few options for establishing partnerships:

Offer no-charge educational programs

Offer an educational program on a topic relevant to the organization's customers, and include a special offer for participants who schedule counseling, or for anyone they refer. The program can be offered on an ongoing basis, helping you establish long-term relationships with the organization's leadership, as well as its customers.

Establish a special nonprofit rate

Some nonprofits, especially places of worship, will pay for counseling for their members. If you establish a working relationship with these organizations, you can offer a specific, discounted rate for the organization as a third party payer. In this way, you align with the organization's mission to serve its members, while also growing a referal relationship.

What to Consider When Pricing Your Therapy Services

As business owners, our pricing must be designed to cover expenses and generate an income. Pricing is a tricky thing for most therapists, because it requires us to balance our motivation to serve with our desire to earn a good living (i.e., to blance the business and therapist roles I mentioned earlier). One way to keep these roles in balance is to create a pricing policy. 

Having a pricing policy is important, because it communicates to clients their initial and potential investment, and it helps hold you accountable to your desired pricing (especially if sticking to it is a struggle).

Most therapists price per session, in 15 minute increments, and/or offer packages.

A Note on Offering Packages

Packages are beneficial for you, because you are paid up front for your services, and therefore have a guaranteed commitment from clients as well as some consistency in your income and schedule. They are also beneficial to your clients, because they make billing simpler and offer a discount for ongoing services.

Packages can be designed based on a specific number of sessions, a time frame, or a program. Discounts can be in percentages or dollar amounts. Consider the following examples:

  • A Personal Development Package of 8 sessions over 3 months (whichever comes first). (In this case, any sessions not used within 3 months would be "lost.")

  • A package of 3 sessions for a 5% discount, 6 sessions for a 10% discount, or 12 sessions for a 20% discount, or whatever configuration works best for you. (In this case, the discount increases with the number of sessions purchased).

Note: Packages work for full price clients only, because those on a sliding scale are most likely already receiving enough of a discount to counteract the package offer. It is also an option to use packages in place of a sliding scale.

When developing your pricing policy, establish:

  • Your per session rate, as well as the length of your session, so that you know what to charge for minutes of your time. This is important if, for example, you go over your session time.
  • Your pricing structure (your session types and fees)
  • Whether or not you charge for canceled sessions, and your cancellation rate.
  • Whether or not you’re willing to slide your fee, and under what circumstances. Also decide if you will offer a discounted fee to the public (initial callers), or if you will only offer it to existing clients.

Ask yourself:

For a sliding scale:

  • Who qualifies?
  • Do you require income proof?
  • What is the absolute lowest fee you will consider?
  • What is the scale? (highest fee to lowest fee)
  • Document the scale (create a handout, for example, tying income amounts to session prices)

For packages:

  • What programs, or packages do you offer?
  • How many sessions are included and for what discount off the regular rate?

For general policies:

  • Will you set a price with a client over the phone, or is pricing reserved for the initial meeting?
  • If a full-fee client needs a discount for a time, what do you require from the client?
  • What is your cancellation fee?

Note: Remember to consider if you have an assessment or initial session that is longer than ongoing sessions, and to price accordingly. In this case, packages would begin after the initial session.


Let's Chat

Let me know in the comments below:

  • What is your #1 struggle when it comes to pricing?

Register for the free resource library for therapists, and grab your copy of the Pricing Policy Checklist:

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