Establishing an appropriate rate for contracting with schools is a fundamental aspect of our professional practice, and it is imperative that we approach this process with careful consideration and strategic planning. This episode elucidates the multifaceted factors that must be evaluated in order to determine a rate that not only reflects our intrinsic value but also aligns with our operational goals and the competitive landscape within which we operate. We delve into essential considerations such as understanding the school calendar, accounting for business expenses, conducting a market analysis, planning for future growth, and engaging in meaningful dialogue with schools regarding our proposed rates. Through this discussion, we aim to equip our listeners with the necessary tools and insights to confidently establish their rates, thereby ensuring the sustainability of their practices and the continued provision of invaluable services to students. Ultimately, we advocate for a proactive approach that empowers us to assert our worth within the educational landscape.

The focus of this podcast episode is the critical issue of determining appropriate rates for therapists—specifically, Speech-Language Pathologists (SLPs), Occupational Therapists (OTs), and Physical Therapists (PTs)—who aspire to establish direct contracts with educational institutions. The host, Elise Mitchell, highlights that practitioners frequently pose the question of how to set their fees, a query that is fraught with complexity due to numerous influencing factors. Rates are not uniform; they vary significantly based on geographical location, district-specific policies, and the saturation of staffing agencies in the area. This variability necessitates a nuanced understanding of the local market, compelling therapists to conduct diligent research and analysis to ascertain competitive pricing while reflecting their own value and expertise.

Takeaways:

• This podcast episode emphasizes the significance of understanding the school calendar when setting your contracting rate, as contracts typically cover 36 to 38 weeks of the academic year.
• Listeners are encouraged to conduct a comprehensive market analysis to ascertain competitive rates, while also being wary of relying solely on staffing agency pricing.
• Establishing a sustainable rate is not only crucial for current financial stability but also for future growth, especially if one plans to hire additional providers.
• The podcast highlights the importance of discussing proposed rates with schools, presenting them flexibly to facilitate productive dialogue and potential negotiation.
• Listeners are reminded that most contracts are annual, enabling them the opportunity to reassess and adjust their rates based on evolving circumstances and experiences.
• Ultimately, determining a fair and competitive rate requires a thoughtful consideration of personal value, expenses, and market conditions to ensure a successful practice.

Links referenced in this episode:

• thetherapistsupportnetwork.com

Companies mentioned in this episode:

• Therapist Support Network

Welcome to beyond the Big Agencies, the podcast for SLPs, OTs, PTs, and related service providers who want to work with schools, but not for them.

I'm Elise Mitchell, an slp, a school contracting coach, and the owner of the Therapist Support Network.

Here to help you take control of your career, do what you love, and build a sustainable practice on your terms.

Because school staffing should be left to the professionals.

Let's dig.

Hey, guys.

I am so excited.

Today we are diving in to an absolutely crucial topic.

And I will say I was trying to calculate.

This is definitely in the top two questions.

Most common questions I get.

So we are going to just dive into the topic for any therapist that wants to directly contract with schools.

And that topic is setting your rate.

If I had a dollar for every time I get the question, I am in this state, what should I charge?

I would be very wealthy and be able to immediately buy the hot tub I have been eyeing.

I get this.

I get the question a lot.

And it's, you know, I get it.

I, I had that same mindset when I started.

I'm in Missouri.

What do I charge?

The reason why I can't answer that question.

First.

Rate varies drastically by district.

So there is the state component, right?

We know that schools in Arkansas pay differently than schools in Washington, but even within that, districts within that state pay differently and they pay differently for different services.

So.

And the reason for that usually is saturation of staffing agencies.

If it's an area that has a lot of staffing agencies, that tends to drive the rate down.

If it's an area that doesn't have a lot of staffing agencies, the rate tends to be a little bit higher.

Schools tend to pay less for virtual.

I won't get on that topic.

I could, but I won't.

So there's a lot of things that make that question impossible to answer.

However, I want to discuss what you can do to establish your rate because you do need to take several things into consideration.

So my hope is that this podcast can give you the tools needed to just really feel confident in your rate and to reduce the risk of you undercharging, which I did my very first contract, very significantly undercharged.

So let's go.

All right.

Establishing the right rate is vital not only for your financial well being, but for the sustainability of what you are doing.

Right.

So let's explore kind of five key considerations to help you determine a rate that reflects your worth, supports your business goals, but is competitive enough to keep you in the market.

So first, when you think about your rate.

It is important to understand the school calendar.

So the very first thing we need to do when we are mapping out our rate is we need to recognize that school contracts typically cover 36 to 38 weeks of the year.

And that's aligning with the academic calendar.

Now that's if you get a contract the beginning of the year.

A lot of our contracts start a little bit after school starts because schools didn't realize they needed a provider.

And so let's say you get a contract for the beginning of the year to the end of the year, then that's going to be 36 to 38 weeks out of the year.

Right.

It is not the same as calculating in months.

Why?

Because we have breaks in there.

We have winter breaks, we have spring breaks.

So I like to really discuss weeks versus months when calculating your rate.

So a full time contract's usually 35 to 38 hours per week.

That's another thing.

The next thing we're going to look at is hours.

I am not saying 40 hours a week is impossible, but because of when schools are open and because there are natural times when students cannot be seen, such as lunch and other, you know, times during the days that you just really can't seem to pull students from because of that.

Often 1.0 FTE, which is a full time contract.

Usually in my experience, 37.5 hours is average, which is different than 40 hours.

And again, I've had weeks where it's 43 hours because of progress notes and things like that.

And I'm working at home.

But the majority of the time, 40 hours a week can be difficult to accomplish with one full time contract.

I like to be conservative when setting rate.

I like to do worst case.

And then if I overwork, if I, you know, if I say I calculated based on 37.5 hours and then I get in the school and because of, I don't know, different building release times, I can work 40 hours.

Hey, that's all right.

Extra money that I didn't plan on.

That's a beautiful thing.

First thing, I would write down the weeks of the year.

You actually can find this online.

Like, you know, Georgia school, how many weeks per year?

Many of them, it's state specific, but the majority of the time, I think 38 is most common.

But find how many weeks of the school year and then next we're going to look at how many hours a week.

If you're looking for a full time placement, I would go ahead and calculate 35 to 38 hours instead of calculating 40 hours a week just to ensure that you are giving yourself enough buffer and you're considering those times where you can't pull students and you can't bill unless you do paperwork.

So now I'm going to give you a formula.

Are you ready to estimate?

And this is just gross.

This does not include any expenses.

You're going to have to do that after this.

But to calculate your gross pay, right, and we're just throwing hourly rates out there to see what you could make.

First we're going to take weeks per school year.

So let's say 36 weeks.

We're going to multiply that times anticipated hours per week.

So how many hours you plan doing so 36 weeks in the school year times 30 hours per week if you're not looking for a full time gig and then take that times what you anticipate your hourly rate being.

So let's say you do 36 weeks, 35 hours a week, a hundred dollars an hour, which is not profoundly competitive in many states.

So please don't use that and say, oh, this podcast says to charge that, don't do that.

But that would equal 126,000 as your gross right now that is just gross.

We have not taken self employment taxes or expenses.

And this is something that you can just, you know, sit down and really plug through what you anticipate.

Your expenses are so your license, any certifications you have, you know, materials you may need, et cetera.

But if you start with your gross pay, you will see when you plug hourly rated if that's even viable.

Like if you do $50 an hour, obviously $63,000 a year gross is not going to be much money when you remove everything from it.

Right?

So that's why it's really important if you have an hourly amount in mind, throw it in that formula and see because it may say like whoa, 140 seems really high.

But when you throw it in there and you take out expenses, it may be exactly what you need to make this worth it.

So first I wanted to give you an overview of the school calendar and some basic formulations to determine what a gross pay check would look like.

And then of course, if you want to find net.

So net is after you deduct all the things you, you can look at that and really map that out as an estimate.

Number one, understand the school calendar and be sure that you're using school calendar and school terms when you're playing around with the numbers.

Right.

Number two, and I talked about this in the Last one, account for your business expenses.

So gross pay can be absolutely beautiful, but it does not equate to take home pay or net pay.

So as a contractor you are responsible for a various amount of business expenses that can significantly impact your take home pay.

First though, usually the largest expense is self employment taxes and you can work with a CPA on that.

I know that if you look online you'll say some people say that's about 40% of your earnings, some people say way less than that.

So you know, play around with it and I will just plug in right now that a CPA is such a profoundly good investment.

When looking at this next thing we're going to do we're going to account for those business expenses, including taxes, your licensing, any sort of insurance.

If you're some states liability insurance is higher than others.

And then also look at any sort of professional development you need, et cetera.

I have found that professional development, at least with the populations I've worked with, it hasn't been a profoundly large expense, but it's something to keep in mind.

So a general guide is that expenses can account for approximately 40% of your gross income.

That's going to be more or less depending on materials, et cetera.

So especially if you are wanting a virtual contract that doesn't take into account a platform and digital testing materials, et cetera.

But go ahead and look at that.

Most likely your net expenses will be about 40% of the income.

So in that first example we found your gross income by looking at the school calendar.

And then that second area we're going to just map out a few expenses and see where that leaves you, what your take home look will be.

That's the first two steps for kind of determining what you're going to charge is C.

When you throw a number out there, is it sustainable?

I mean can you live off of it?

Because if you can't, it's not going to make this very enjoyable for you.

So let's look at number three, the third thing you should do when determining what you are going to charge schools and that is conduct a market analysis.

Understanding the market rates in your area can provide context for setting a competitive rate.

I will say this is a big disclaimer.

So be sure to just soak this in big disclaimer, bold print.

Right now it is important not to rely solely on your competitors rates.

Some of these large staffing agencies operate with very tight profit margins and undervalue their services.

I have seen what some of these staffing agencies are charging and it is less than what I have paid people.

So that's a big disclaimer.

I don't know if I would look at the staffing agency rates on this.

Another thing, another part of the disclaimer is we never want to see what someone else charges and say, okay, I'll charge that.

You get in really sticky water with that.

So this is really just a gauge, like, what are my territories paying?

Right.

Am I in the range?

It doesn't matter.

If you're the high end of the range, you come with some beautiful value.

But it does give you an idea of, okay, you know, I'm not, I'm not astronomically high.

Look what they're typically paying.

So some ways to conduct a market analysis.

One, research public records.

So often school board meeting minutes have awarded contracts in there because they do have to be board approved.

So sometimes you can look back at school board mini board meeting minutes to see what schools have paid for similar services.

You also want to consider the geographic variations.

So I would not compare St.

Louis Public Schools schools to Willard, Missouri public schools.

So for those of you who aren't Missouri, St.

Louis is a very, of course, a dominant area, but Willard is a rural area.

Would not use St.

Louis trends to dictate by Willard rate or to even sway my Willard rate because it is a rural contract.

And rural districts tend to have less staffing agency presence.

And so oftentimes rural districts tend to be a little bit higher.

So consider those geographic variations.

When you do your market analysis, make sure that you are looking at districts that are at least within a similar market from the district that you are pricing or you are giving a rate for.

And then also another note is timing matters.

So the time of year and the urgency can influence rates, as can the specialty.

So if you are someone who is providing bilingual assessments, I would not necessarily use a market analysis on occupational therapy in general to help me determine if my rate is where it needs to be, you know, or if my rate's competitive because those are different.

So time of year and then the niche aspect of what you're providing can influence rates.

I will say I no longer do market analysis because I have found, although they did offer insights and they can help if you are doubting yourself and if you feel yourself at risk of undervaluing.

Market analysis typically gets in my head in a really negative way.

So I have found that schools will pay your rate if they understand the value, if they need that service, if they need someone that's gonna be able to staff it right away, et CETERA So I don't typically provide market analysis, but it is a beautiful tool.

If you are someone that you are experiencing some insecurity about setting a rate, or you just don't even have a ballpark idea, completing a market analysis can help.

But please ensure that your rate reflects your unique value and your business needs.

All right, so the fourth thing we're going to consider, planning for future growth.

Setting a rate isn't just about meeting your current needs, but it's also about planning for the future.

So if you anticipate expanding your contract business by hiring additional providers, your rate should accommodate competitive pay, operational costs, a profit margin.

So let's say you charge, you know, a hundred dollars an hour.

We're just, we're doing really rough math here.

Let's say we're going to pay a provider $70 an hour, right?

If you are charging a school $60 an hour, you're not going to be able to pay a future provider that high and you're not going to be able to recruit, which is something that we see with our large staffing agencies.

Yeah, they don't charge much, but they also are known for underpaying providers and having turnover and having a difficult time finding providers because they don't pay competitively.

So if you have hiring or subcontracting on your radar, you want to ensure that your rate is high enough that it does allow you to farm that contract out in the future.

So plan for future growth and make sure that your rate, if you're someone that wants to stay intentionally small, that's completely fine.

But if you are someone with that on your radar, consider that now because it's a lot harder to go from, oh, hey, sorry, I, I charge $60 an hour, but now I need to go up to $90 an hour because I'm hiring out for this contract.

That's a very difficult conversation to have with the school.

As opposed to, you've always charged 90 an hour.

That's been your rate, if that makes sense.

And then the fifth thing to consider, and this is the most important, once you've determined a rate that reflects your value and covers your expenses, discuss it with schools I love.

And you don't have to do this if you're like, this is my rate and this is what my rate's going to be.

And I am not wavering.

Kudos to you.

You are wonderful and I love it.

But if you're someone that you're like, ah, this is my rate, and I'm just going to work on saying it out loud without getting sick to my stomach.

Then I use this approach.

I typically say, hey, school, I typically charge this much an hour for my services.

Is this aligned within your budget?

Is this typical for what you all allocate for contracted services?

How does this align?

So I usually approach it in a flexible way, but yet a confident way.

So I typically charge this much an hour.

How does this align with what you usually pay for these services?

So I make it conversational, and they will tell you if it does not align.

In my experience, they are not shy about that.

And this really opens the door for dialogue and negotiation.

And so you can.

Can adjust.

That is one thing that I have found is sometimes we get so stuck on what am I going to charge that we let it slow us down.

You want to try to be within the ballpark.

You absolutely want to know, like, how low is too low so you don't get in a certain situation where you undervalue yourself.

But ultimately you.

You gotta shoot your shot.

You gotta.

You gotta throw it out there and see how districts feel about it or submit it on.

On an rfp.

That is the most important part.

Once you get to a rate where you're like, I can live off this.

This makes all of this worth it.

This is a rate that I love.

Then percentage of schools start those sales calls.

If you're still nervous about it, present it in a flexible way, but allow yourself to have the conversation.

And another thing to know, this is like a bonus because I said five, but this is kind of six.

Most contracts are annual, so even with RFPs, if you don't know what that is, don't worry, I can help with that.

But even with RFPs, you typically have the opportunity to update your rate.

They'll say, you know, update your rate.

Fill out a rate sheet for the next year.

Most contracts are annual, so you can absolutely reassess and adjust your rate in subsequent years based on your experience and changing needs.

You under, you know, you undervalued your expenses.

Whatever it is, you can increase it.

I have increased it 10% before, and nobody batted.

Batted.

Nobody bat an eye.

Nobody bat an eye.

There we go.

So that's just something to know that you can absolutely adjust.

With that said, I don't want you losing money your very first time contracting.

So take time to really build it out and know that you are worth your rate.

You have a value to you.

You are a provider.

If you can staff this school yourself today, you are gold.

You are liquid gold.

I mean, they will love you.

So don't be afraid to be competitive.

Don't limit what you charge because you're worried you're not going to get a contract right.

You will find the right school.

You will find the school that will pay what you need to make this all worth it.

But know that if you do under underestimate how much expenses will be, you can absolutely go down the road and readjust.

And that's fine.

That's actually expected in the contracting space.

So setting your rate has Setting your rate as a direct school contractor invol a thoughtful analysis of your financial requirements, your market conditions, and your future aspirations.

So by considering these factors, you can establish a rate that not only sustains your practice, but also reflects the invaluable services you provide to students in schools.

For more in depth guidance and resources on contracting with schools, including rate calculators and sample contracts, visit my website, the therapistsupportnetwork.com Empower yourself with the tools and knowledge to thrive as a direct contractor.

Thank you so much for joining me today.

Until next time, continue to advocate for your worth and make a lasting impact in the communities you serve.

That's a wrap on this episode of beyond the Big Agencies.

Remember, success isn't just met for the big staffing agencies.

It's meant for providers like you who show up, take action and build something meaningful.

So go get em and if you're ready for more support strategies and a community that gets it, join us inside the Therapist Support Network.

You don't have to do this alone.

Head to www.thetherapistsupportnetwork.com to connect, learn and grow with other SLPs, OTs, PTs and related service providers.

Building their own path.

Until next time, keep pushing forward.