There are so many differing opinions on how to set your pricing you could drive yourself crazy if you listened to everyone. But, I want to tell you how I did it so you can use this simple method to see how it will work for you.
When I was first starting out, I didn’t know what to charge. I decided to look around and do a bit of research to see what other similar services were charging. After I collected enough information, I picked a price that was basically in the middle of all the fees I learned about. Really scientific right?
I picked something in the middle because I wanted to fill my practice quickly. I purposely didn’t choose a high price point so I wouldn’t have what they call a “barrier to entry”. A barrier to entry is a price point that is higher than what the marketplace will bear. You don’t want to set the bar too high when first starting out because too many people will find the price unaffordable.
How do you know if you have selected the right pricing? Here’s how it worked for me. I could gauge if I was overcharging or undercharging by how quickly I filled my practice. If I was getting 80 percent of people to say, “Yes”, then I kept going until I nearly filled my practice. Only then, did I raise my rates because I could afford to have people say, “No” at that point and be more selective since I had lots of clients and money coming in. For me, I raised my fees frequently, sometimes almost every three months, but at least a couple of times a year.
This is my philosophy: If you are not well-known and you have more time than money, it’s simply better to work with more clients. As soon as you fill your practice, then you can afford to up your rates and increase your marketing. As you gain experience, you will better understand what marketing works for you and who you can serve best. As you refine your target audience and how to talk to them, you will be able to charge more.
Your Client Attraction Assignment
Have you done research on pricing and what your competitors are charging? If you are a new business, this is an important step to making sure you are not under or over charging. I recommend finding that middle spot and holding there until your practice is nearly full. Then, you can feel free to raise your rates as you and your business continue to evolve.