• Kristin Schuchman

Setting an Hourly Rate for Your Counseling or Coaching Private Practice

We are living during a time in which counseling services are in higher demand than ever – the COVID-19 epidemic is overwhelming crisis hotlines, and many therapists find themselves turning business away. While we want to serve people in emotional pain, we also may find ourselves wrestling with the need to charge an appropriate rate for our services. Striking the balance between the two can prove to be a formidable source of anxiety – we want to offer assistance to people in need, but we also need to make a living in what is arguably an uncertain economy.


Photo by Aneta Pawlik on Unsplash


In my experience, healing and helping professionals struggle even in non-pandemic times to charge enough money for their services. If pricing your counseling or coaching services is something you often second-guess, I offer a technique below to help you think it through.

1. Evaluate the amount of time you can reasonably work.In her book Better, Smarter, Richer, Jackie Peterson describes a common challenge of creative entrepreneurs to make a living as a “time/money squeeze.” She posits that successful artists “know how to get the best return from each hour they work” and appreciate how long it takes to make their work and what to charge in order to earn a profit. Counselors, coaches (and even holistic healing professionals) are no different. While you may not make tangible products, you still need to have an intimate understanding of the time you expend in your business day in and day out. To understand your “time/money squeeze,” you not only need to familiarize yourself with time you spend meeting with clients; you also much appreciate how long you spend each week on non-client practice management work – scheduling and rescheduling clients, logging case notes, billing, bookkeeping, updating your website, and blog writing, social media and other marketing activities like networking and public speaking. Use a weekly log to truly determine how you truly spend your time – use color coding to define certain tasks as administrative, financial, or marketing and delineate it strictly from your in-session client hours. It will likely surprise you how much time you spend on out-of-session tasks. Determine how many hours per week you can reasonably dedicate to seeing clients, keeping in mind that 20 client hours is considered a full-time practice.

2. Be honest with yourself about how much time you may need off.This one-on-one work is rewarding, but it is also quite physically and emotionally taxing. Give yourself the time you need to recuperate from seeing the client throughout the year will prove critical to your success. If you need four weeks of vacation each year to prevent burnout, you will serve your clients better and be able to maintain the stamina to flourish in the work you were born to do. Factor in times that are normally slow for therapists (or that you may naturally want to take off) like the end-of-the-year holidays.

3. Take an unflinching look at your expenses. Really dig in and painstakingly analyze your expenses for the entire year and then divide that number by twelve. Look at everything – software subscriptions, rent, CE trainings, student loan payments, office supplies, tax preparation fees – all of it. The most common cause of small business failure is lack of cash flow. If you are starting out, some of these fees will be higher, or you may still be paying for furniture that you put on a credit card or grad school debt. Fill out a cash flow statement that covers the current and next two years, at a minimum. (If you aren’t familiar with cash flow statements, this article on fundera.comis illuminating. Taking the time to build this knowledge will prove priceless, trust me.)


4. Ask yourself how much you would like to make in a year.Really think about the salary you would like to earn in the next year and the following five to ten years. Start by looking at your personal budget and working out how much you spend each week. If you live with a partner, ask for their feedback about this monetary goal. This is not about cutting out personal expenses – it’s about actually taking an honest look at what you spend and what you need to earn to achieve certain goals like travel, buying a building, or funding your children’s college educations. Once you have arrived at an amount, do the following calculations:

Desired Annual Salary+ Estimated Annual Expenses= X

52 WeeksDesired NumberofWeeksOff= Y

X / Y = Z

Z / Desired Number of Weekly Clients = Your Minimum Hourly Rate

Note: Even if you are only seeing two or three clients right now, use the number of clients you could reasonably see without threat of burnout to determine your Desired Number of Weekly Clients.

For instance, assuming your Desired Annual Salary is $100,00, your Estimated Annual Expenses are $20,000, your Desired Number of Weeks is 4, and Desired Number of Weekly is 20, your calculation is as follows:

Desired Annual Salary+ Estimated Annual Expenses= X

$100,000 + $20,0000 = $120,000

52 WeeksDesired NumberofWeeksOff= Y

52 Weeks – 4 Weeks = 48 Weeks

X / Y = Z

$110,000/48 = $2500

Z / Desired Number of Weekly Clients = Your Minimum Hourly Rate

$2500/20 = $125

In this scenario, your minimum hourly rate would be $125. You may find that you want to charge more than this, but this is at a minimum the rate you would need to charge to earn your desired salary and take the time off that you wish. Spend some time comparing the rate that you calculate and compare it to your competitors. If you are slightly more expensive, try not to be discouraged. If a prospective clients likes you, they will pay an extra $20 to $30 to secure your services. Keep in mind that price reflects your value and that a client is more likely to think well of you for charging more than shirk at your pricing.

To bring the topic back to a desire to serve clients in crisis due to the COVID-19 pandemic – before you consider lowering your prices to serve a population in dire need of your services, you will better serve all of your clients if you first robustly calculate your hourly rate. That’s not to say you can’t offer a sliding scale or pro bono rate to clients with an inability to pay – you totally can. You will project more professionalism by far if you decide on a rate that reflects an honest reckoning with your bottom line. You can serve more clients more skillfully over a longer period of time if you can stay in business and run a practice free of burnout and resentment.


#covid19 #practicemanagement #counseling

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