Texas Counselors Creating Badass Businesses

94 How to Set Counseling Rates: Strategies for Building a Successful Therapy Practice

August 09, 2024 • Dr. Kate Walker Ph.D., LPC/LMFT Supervisor • Season 3 • Episode 94

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Ever wondered how to set client rates that reflect your true value as a therapist? Discover the secrets to crafting the perfect pricing strategy with Dr. Kate Walker, as we unlock the complexities of setting client rates in private practice. Learn why traditional pricing models might not fit the counseling profession and understand the pivotal role of a strong value proposition in balancing cash flow and client relationships. For those of you dealing with insurance, we break down the crucial compliance factors to keep in mind. Whether you're starting out or looking to tweak your existing rates, this episode provides the insights you need to make informed decisions.

But that's not all—if you're aiming to boost your income and diversify your services, this episode is a goldmine of strategies. Explore the advantages of specializing in high-demand areas like EMDR and expanding your offerings to include retreats, training sessions, and continuing education roles. Find out how to amplify your reach by creating engaging content like blogs, podcasts, and YouTube videos. We also delve into the benefits of intensive sessions, group therapy, and even forming a group practice to manage your workload and increase your earnings. Don't miss these actionable tips to elevate your practice and make a meaningful impact on your community.

Get your step by step guide to private practice. Because you are too important to lose to not knowing the rules, going broke, burning out, and giving up. #counselorsdontquit.

Speaker 1:

I want you to just kind of think about that for a little bit, because that might be a good question to ask yourself. How much pressure are you putting on this client rate to kind of save the day? This is the Texas Counselors Creating Badass Businesses podcast with Dr Kate Walker, where I teach you Texans and non-Texans alike the latest research-based information to hit your income goals, stay out of trouble and make a bigger impact in your community. Join me and let's fill the gaps in access to mental health care and create a counseling career you'll love. Let's get to work. Welcome to Texas Counselors Creating Badass Businesses, where it's all about working smarter, not harder. And here's your host. Dr Kate Walker Would rather be golfing on our patch of land right about now.

Speaker 1:

I'd rather be golfing on our patch of land right about now. Welcome to episode 94. This is our last episode for our summer boot camp. That doesn't mean the fun is over and don't forget, you can still grab the course how to Set your Client Rate and save $64. All you have to do is go to katewalkertrainingcom forward slash bonus, grab the course and get to work. So let's get to work.

Speaker 1:

Hey, thank you so much for listening and watching. Today I'm in Western Michigan. The weather is beautiful outside, I am traveling today, so good for you to be here to watch this replay. And, just as a reminder, step it Up. Members always get the replays in their membership and they get that with all of the information that I talk about. So if you're listening to this in the membership on a replay, awesome go you. If you're listening to this on a podcast, well, you don't get the benefit of all the visuals, but hey, you're going to get some great information today about what to charge your client.

Speaker 1:

That's a tough thing, you know, when we think about starting our practice and putting that out there and we're listening to all the advice. Maybe we go down to our local small business thing and we're sitting there talking to people and we're trying to understand how people set their rate. And you know, opinions are all over the place, right? Because if you're talking to someone who's say a business person who sells widgets, right? So they're going to say, well, what's the cost of the widget? Double that and add 10%, okay, well, you're not selling a widget, you're selling a service. So you walk over here to the service industry person and let's say that they are selling carpet cleaning and ask them well, how do you set your rate? And they say, well, you take the cost of what you pay the person and the equipment and how much you spend on supplies, add 10% and blah, blah, blah. Again, not you. So there are lots and lots of industries that are like counseling, but they're not counseling.

Speaker 1:

And so then maybe you go on the interwebs and you find someone who's like you know what. You can't put a price on what you do for a living, and the sky's the limit. You charge what you're worth and deep inside you're like, yeah, but that's not going to work for the population I want to serve or the issue that I want to treat or the region where I'm going to focus. Right, so there are lots of things to take into consideration, and so that's what I'm going to cover today, and so what we're going to talk about isn't just what to charge a client. I want you to talk about, or think about, what is your value proposition. Now we have a great course that goes into depth and again, step it Up, members, you already have this, it's included in your membership and so it does go into more depth about what is a value proposition, all of the elements that can consist of.

Speaker 1:

But don't think I'm going to shortchange you today, because I'm not. I'm going to take you through the important points, because a value proposition, when you take it from the customer's point of view, is what am I getting for my money, right? What am I paying for? What is my return on investment? So we do want to think of this from the customer's point of view. So your value proposition is important and so it really comes down to what is the problem that you're going to solve for your clients. Because setting your rate for private practice is going to impact more than just your cash flow, right? That's the money coming in, going out and your client's pocketbook. This affects the relationship. So I'm glad you're putting a lot of thought into this before you start filling up your practice. And if you're listening to me and you're like, kate, I already have clients but I want to change my rate, don't worry, this is going to help you too.

Speaker 1:

Now I just got asked the question the other day you know, if I take insurance, is it okay for me to market the industries that offer that insurance? And I was like, yeah, absolutely. So, don't think I'm leaving you out if you take insurance. I'm not, you know. Having a cash based practice does mean you have to put more thought into this, obviously because you sign that says you will only charge this much to clients, like, if you try to charge more than that and do some funny business on the side, that's fraud, I mean you could get in trouble with your insurance panel. So there are lots of laws, lots of rules that govern insurance paneling that I can't cover because I'm the state law expert. I don't know much about insurance companies and what's in that contract. So, absolutely whatever you sign, make sure you have somebody look at.

Speaker 1:

But all that aside, you still have to be able to stand out in a buyer's market. Now, everybody loves this idea of getting you know a cross-country compact so I can have my license here, but I can also counsel people in Ohio or wherever. Whoever else agrees to be in. That compact Sounds great, right, but it will likely increase competition and a lot of you listening to me right now are in some pretty saturated markets or you're paneled with an insurance company that has a billion providers. So don't think you're going to slack off on this right Setting your rate, even though it's governed by your insurance.

Speaker 1:

I want you to pay attention to the next things I'm going to talk about, because you are still setting your value proposition. You've got to stand out in the market. So offering telehealth, considering a specialty, adding resources, considering things outside of the therapy room, hiring other people, offering groups, scheduling on weekends and evenings, having super low rates Again, that last one that's probably not for you if you are working or credentialed on an insurance company, but if you are just certain that you're going to do a cash-based practice or you're already doing that cash-based practice, all of these eight things that I'm talking about here, that's going to impact how you set your rate, but it's also going to impact your life balance. So it's a trade-off and probably you kind of perked your ears up at that last one. Having super low rates, right, it seems like, especially when you're starting out, I'm just going to be the lowest rate in town and then I'll have a full client load and then I'll sort it out from there.

Speaker 1:

Not always the best idea, right? Because having 50 clients in a week like you would if you worked for an agency that's so much work and it is going to affect your life balance, which will affect I almost said infect. I think that's a Freudian slip right which will affect your clinical judgment, which will affect everything. So, as I go through these things, it's going to be because I want you to do more than just think about what you're going to charge your client. I want you to think about protecting your peace, making sure that you're protecting your future and keeping in mind the other people in your life, whether it's your partner, or you're taking care of parents, or you're taking care of kids, even if it's just you. You've got future you to take care of. I want you to take all of this into consideration. You know, podcasts are great until you have a question. Then you've got to reach out to me through my support email or somehow you've got to tag me on social media and days or weeks could go by before I actually get to what you need to know.

Speaker 1:

Imagine if you were in oh I don't know the Step it Up membership and you were able to attend a weekly live virtual group coaching. I would give the training, you could ask the questions and the next thing you know your practice is growing to levels you never imagined. The Step it Up membership is pretty cool because, in addition to the weekly live coaching. You get unlimited CEs. So that alone means your Step it Up membership pays for itself the very first month that you have it. Plus, we have some other goodies inside, like $100 off coupons for the 40-hour training. We have affiliate programs, we have discounts on consultations lots of stuff and we're always adding, always making sure that our members get the most recent board updates. So what are you waiting for? Check out the Step it Up membership now, while we're having this huge discount. It's going to end September 1st, so you don't have long to check it out. Go to katewalkertrainingcom forward slash podcast. All right, I'll see you on the inside.

Speaker 1:

So one of the ways we know to stand out in a buyer's market and remember, when I say buyer's market, I just mean in those markets where you may feel like things are saturated. There's just no way your business is going to stand out over everyone else's, and so you're really looking at price, your rate, as the thing that's going to determine the decision. And I'm trying to talk you out of that right. Offer telehealth. Something as simple as offering telehealth will help you stand out from the crowd. Now you don't have to do it on a regular basis and, of course, I know, if I'm talking to play therapists or folks that work with kiddos, that may be just a no-go. But having telehealth as an option for oh, you can't make the session, or if you see adults and you have a sick kiddo at home or you're in the middle of a meeting but you can step out to a conference room, right, having that option for your clients may set you above the rest. And as I raise my hand up here, think about your rate. So if you're thinking, okay, you know what, everybody in town charges $80 an hour. Well, everybody in town charges 80. But if you're charging $100 an hour because you have that flexibility with telehealth right now, that's justified. That's something you can put on your website. Hey, by the way, I have telehealth options. Maybe other people don't. You're not going to put that on your website. You're not going to talk about the competition on your website. That's a marketing thing, so we'll get into that in a different discussion. But telehealth will set you apart.

Speaker 1:

Now let's talk about considering a specialty, right? Sometimes I hear people say things like they're going to offer grief counseling. Okay, well, you're competing against most religious organizations who offer grief groups, and those groups are free. So if you're competing with free, that's tough to keep your lights on right. So you know, if you're checking your competition, as you know, all of the business books tell us to do right. If you're going to be the secret shopper and you're calling to see what folks are charging for counseling, as you're listening to that and you're considering, okay, are they offering a specialty, are they offering that specialty to a particular person, a particular niche, if you will right. So you may think, okay, I can offer grief counseling. Or I can offer grief counseling to folks who are in the oil and gas industry, who have lived overseas in areas that maybe have had political unrest. I mean, you can get laser focused on this and that makes you a very desirable counselor.

Speaker 1:

And if you have other things like you offer retreats in particular ways, in particular locations, now you have set yourself apart from just your local grief group. If that's what you want to do I know this is sounding more like marketing, but you see how now we've gone from free to perhaps $80 an hour, which may be what you know. Insurance is reimbursing, but you're going to be offering these specialty things to the specialty population. Now you can set a rate of 100 or 120. You do, you, but your value proposition has increased. Your customer, your client, will be getting more from their investment and you got to tell them that. So this is the fun part as you consider that specialty, you know we still have a ceiling I mean I think we do right. So if you have the ability to see 20 people in a week I mean emotionally, time wise, emotionally time-wise, you know, whatever and you are limited to 20 clients a week, well, if you charge $100 an hour or $200 an hour, you're still eventually going to hit a ceiling.

Speaker 1:

But if you have gotten that specialty right, if you have, let's say, become a supervisor. If you have, let's say, become a supervisor, or you are now EMDR certified or you're now an EMDR supervisor. Now you can offer additional services right, you can become a CE provider. You could become a supervisor. As I mentioned, you can now offer training to folks who want to be EMDR certified. That's additional income and if you have heard me, you know I preach this all the time. Adding additional streams of income takes the pressure off this whole conversation, right, we're not looking at the client rate as the end all be all right and that's going to help protect the relationship.

Speaker 1:

So let me explain that a little further. Right, when you are counseling, right, you have your client in front of you. You are in a relationship as a helper. Well, for a split second, when it's time to be paid for that service, you're a banker. Right, and most of us do it seamlessly. So if you're brand new and you've never done this before, I've got some other podcasts that talk about how to take money ethically seamlessly to low impact on that relationship.

Speaker 1:

In fact, if you're watching this and you're like, ok, if I'm going to listen to one podcast or see one training, I'm going to see this one because I need to know how to set my client rate, that's because we put so much importance on that. When you start doing other things, like taking your specialty, becoming a CE provider, becoming a trainer, becoming whatever an adjunct professor somewhere, suddenly this client rate isn't quite so important, right? So I want you to just kind of think about that for a little bit, I mean once you finish watching. But I want you to sort of ponder that, because that might be a good question to ask yourself how much pressure are you putting on this client rate to kind of save the day, so, as we take pressure off the client rate. I've already told you how you can increase the client rate. Why you can increase it. Right, because you want to make sure that you're actually adding value to what the client is purchasing. Well, when you start adding a specialty, why not add resources? Right? So I've talked about outside the therapy room. But there are blogs, there are podcasts, you can do YouTube videos, you can write books, you can get booked to speak, you can offer retreats, you can offer intensives. So adding resources, see what we're doing here. We're taking the pressure off that client rate and now we're able to sort of disperse what we're doing here. We're taking the pressure off that client rate and now we're able to sort of disperse what we're doing.

Speaker 1:

In fact, that was another thing I saw. I was answering a question. I think it was in the Texas Counselors Creating Badass Businesses Facebook group. Somebody said I don't know what I should charge for my intensives and I asked the question is it different from your hourly rate? And a bunch of people replied after that and the answer was yes, and I didn't know much about it. I've never offered intensives, so that was news to me that folks have an hourly rate for their session, but then they have an intensive rate. That's completely different. I thought, well, that's pretty cool, okay, so they're able to value themselves when they're in the role of an intensive instructor, right? So whether that is, you know, you and I are, we're all going to sit in this room for four hours today and then you're going to come back and we're going to do it again tomorrow. I mean, to me that's the definition of intense, right, so you can value that differently than you do.

Speaker 1:

Your face-to-face client sessions the next things that can take the pressure off, just your face-to-face client sessions, the next things that can take the pressure off, just your face-to-face counseling that really it's going to require you to make kind of a life decision. You know, I know, when I got into counseling I think I always thought of myself as a group practice owner. I saw myself as being a big practice owner. I did it, I didn't like it, I got out of it, but some folks love it. So that's part of this too. You can hire people. So once you hire people now, you may not have to see so many clients, right, because they're down here and they're seeing the clients. You're in the hierarchy, you're a step above and you're getting income from the folks who are seeing those clients. So that means you can turn the volume down again, take the pressure off of the client rate, as we're talking about.

Speaker 1:

The other thing is to offer groups, and I think this is kind of challenging. For most people it seems like it's something that could come quite easily. But if you do wanna offer groups, I would encourage you to ask around, see how other people do it. Don't just reinvent the wheel. I know there's a good way to do this so that perhaps you get in with a physician or perhaps you get in with some kind of an IOP or residential treatment and you can be one of those resources that they refer to. That may be a great thing for those of you who take insurance Scheduling on weekends and evenings.

Speaker 1:

I don't like this idea, but I always talk about it because, depending on the client base, right your niche, the people that you're really marketing toward those are your people that you want in your practice. You know that may be the only time they're available, so that would definitely affect your life balance. But imagine if you're the only one in town, or one of very few, who is offering weekend sessions. Right, that's your thing. You're going to offer Saturday night sessions or Sunday night sessions and that's going to be very appealing to some people and you can charge accordingly. Having extremely low rates don't recommend. I think that's just a surefire way to wear yourself out.

Speaker 1:

Thanks so much for listening. I want to give you a free CE Now. If you don't need a CE, which is another word for continuing education, totally okay. You're still going to love the experts that we host every single month at Kate Walker Training. It's easy to attend. Just go to katewalkertrainingcom. Forward slash free webinar and I will see you there. I'm Dr Kate Walker. Thank you so much for listening to Texas counselors creating badass businesses. Thank you to Ridgely Walker for her lovely voiceovers at our introduction, and do me a favor when you get a second, please like, share and subscribe and write us a review. That's really how we get picked up by other RSS feeds and we get this information out to the mental health badasses who need it. Thanks again, and keep saving the world with excellent therapy. Thank you.