About Sally

Sally Farrant is an accountant who goes by the name “pricing queen!” Sally has taken her skills from the corporate arena and now supports businesses to understand their accounts and price their products and services so they actually make profit.

The highlights

●     Pricing and setting fees is something that stresses out psychologists and therapists in private practice - I ask Sally why she is so passionate about pricing and how she got here 0:40

●     Sally talks about how people tend to underprice and don’t consider all the costs 1:14

●     Sally advises that you should put prices up by a small amount regularly 2:44

●     I ask Sally what the consequences are of getting our pricing wrong 3:30

●     We discuss avoiding burnout and being realistic about earnings, clients, hours, and the importance of pricing properly 4:43

●     We explore how charging high fees can better enable you to help the more vulnerable and disadvantaged 11:05

●     Sally advises on ways to implement price increases, and why it’s important not to make assumptions on what people can and can’t afford 15:30

●     I explore why, as a therapist, it’s important to unpick why someone says they can’t afford it anymore, as it may not be about money 19:26

●     We look at lower cost offerings, and how the client must be aware it’s a lesser offering 20:55

●     Sally talks about recognising what you can and can’t manage 24:57

●     Sally discusses why benchmarking the opposition is one of the biggest pricing mistakes 25:40

●     We talk about advertising your prices to avoid anxiety 28:40

●     Sally explains her pricing calculator and what needs to be taken into account 30:54

●     We discuss the importance of considering why you went into private practice and being honest about what you and your family want and need 35:58

●     I ask Sally how she helps gets people to back on track with their pricing 38:50

●     I’m so excited to let you all know that Sally is going to be doing a masterclass for the psychology business school, our new course to help you build your practice in a way that allows you to live your values, help more people and avoid burnout. So if you know that you need to set your prices properly from the beginning (or put them right) make sure you come and join us.

Links for Sally’s Website:

https://www.businessgrowthbynumbers.com/

Pricing calculator: https://www.businessgrowthbynumbers.com/pricing-calculator-sign-up

Pricing personality quiz: https://quiz.businessgrowthbynumbers.com/

You can find Sally online at:

Instagram: https://www.instagram.com/thepricingqueen/

LinkedIn: https://www.linkedin.com/in/sally-farrant/

Feeling Too Overwhelmed To Be Creative?

Do you sometimes wake up at 2 am worried that you’ve made a terrible error that will bring professional ruin upon you and disgrace your family?

I’m laughing now but when I first set up in private practice I was completely terrified that I had “missed” something big when setting up insurance or data protection.

Even now, three years in, I sometimes catch myself wondering if I have really covered all the bases.

It is hard, no impossible, to think creatively and have the impact you should be having in your practice if you aren’t confident that you have a secure business. BUT it can be overwhelming to figure out exactly what you need to prioritise before those clients start coming in.

I’ve created a free checklist (plus resources list) to take the thinking out of it. Tick off every box and you can see your clients confident in the knowledge that you have everything in place for your security and theirs.

Download it now from https://psychologists.drrosie.co.uk/client-checklist

How to set your fees for success with Sally Farrant

Transcript

SPEAKERS

Rosie Gilderthorp, Sally Farrant

Welcome to the Business of Psychology podcast, the show that helps you to reach more people, help more people and build the life you want to live by doing more than therapy.

Today, I'm here with Sally Farrant. Sally is an accountant who often goes by the name of the Pricing Queen. Sally has taken her skills from the corporate arena, and now supports businesses to understand their accounts, and price their products and services so they actually make profit, which would be very nice wouldn't it? Welcome to the podcast, Sally.

Ah Rosie, thanks for having me.

So I'm really excited to have you talking to us today because pricing and setting our fees is something that really stresses out pretty much every psychologist or therapist that I talk to who's gone into private practice. It doesn't feel natural, just to warn you there are loads of mindset issues here, mine included, so you're going to encounter some of those I suspect, but I'm really grateful that we're going to get to benefit from your wisdom on this topic. So can you tell me a little bit about why you're so passionate about pricing and how you got where you are now?

Yeah, so as I said, I'm an accountant, and I have a background in corporate businesses, but then when I started out on my own three years ago, I discovered that actually one of the biggest things is that people massively, massively underprice their services. So when you're in a salary in a job, you obviously get a salary, and that works really well, and you just take that home, whereas when you're in a business there's a whole load of costs that you just don't even think about and then you've got to pay yourself at the end. Which means that actually, when you start looking at comparing your job to your business, it just doesn't, it doesn't look the same, and that most people massively, massively underprice. So I moved about six months ago into the niche of pricing and yeah, just lots and lots of conversations about pricing. And we all have pricing issues, it doesn't matter whether you are a year in business, new in business, or 10 years in business, there's always some sort of block about pricing.

Yeah, I think that's so true and I imagined when I started out in private practice that three years in, I would be much more comfortable with my pricing, I'd feel sorted. Every time in fact, I've put my prices up, I've thought this is it now, I've reached the level, I've done it right, ticking the box, that will be fine. And actually, every year, I am challenged to think about it differently. It's really important to recognise that as kind of part of the business's journey.

Yeah, yeah, I think so and as you get more experience, and, and also that generally, you know, again in a job, you might have had a price increase, as you know, you might've had a salary increase as part of your job, you know, you've got to keep in line with inflation. And I always think that really, you should put prices up regularly and frequently, like every year, rather than waiting five years, and then going, oh, I'm gonna put it out by 50%. So put it out by a small amount regularly rather than loads in one go.

Yeah, that definitely makes a lot of sense. So I think, you know, we've established haven't we that a lot of people get their pricing wrong. And I'll hold my hands up and say I definitely charged the wrong fees. I've talked about it on this podcast before, but when I started I was actually making less than eight pounds an hour from my private practice, because I got this so badly wrong. But what are the consequences that you see of people getting their prices wrong? Why does it matter?

Well, exactly that; you can be earning less than minimum wage, when you actually start working out how many hours you're actually working versus how many you can charge for. So often, we forget about all the admin hours and all of the stuff that goes on outside. So it might be while you're doing, you know, you're working three days a week in practice, but actually you're also, you're actually working five days a week, because you're doing a whole load, you're doing all the admin and all the other stuff that goes with it. Well, you need to be making enough in those three days to cover the whole lot. Not, not just in three days. And then it just means that you just don't make enough, you know, you're not making enough money. I mean, the main issue is you're not taking home enough money. I mean it does, it happens to all of us, it happens to me as I was saying before that, you know I'm about to have a chat with a client who's not charging enough, who's not paying enough and I'm like right, okay, gotta have that conversation, it's gonna be a tricky one but it's got to be had because actually, I don't have the capacity for so many clients. So it's making sure that you don't burn out, which is also a massive issue. You need to know how much you need to earn and therefore how many clients that means you're going to have to take on, and is that actually realistic? You know, when you start looking at how many hours of client work am I going to do and how many, how much am I going to charge? Is that going to pay you enough, and you either put the price up or you work more hours. So in lots of the stuff I talk about you should package your time and all of that sort of thing, and you should sell your value. But in this case, I know that you, it is a price by hour kind of thing, but you've got to be really realistic, can you work 40 client hours a week? You'll be burnt out, you know, it's exhausting work. So you've got to be able to say, well actually if I put my prices up I can deliver better value to the client, because I'm not so stressed and exhausted, but also experience really counts. You know, if you've got 20 years experience, they should be paying more than if you've got two years, and keeping up all of your professional development and all of that sort of thing. But yeah, I mean, the fact is if you under charge the person that you are probably doing a disservice to is yourself, because it's usually your own salary that sacrifices the situation, because you basically you pay everybody else and then you pay yourself, or you pay all the other costs and then yourself and whatever's left is yours. Well, there's never anything left if you're not careful.

I think that's so true and that definitely speaks to my experience. I think when I started out I undercharged to the point that I needed to see a lot of people to just cover my childcare costs really. And as people who've listened to this for a while know, I was not working for fun, I was working because my family needed me to bring in an income. So I wasn't meeting that need that my family had. And I was working all the hours under the sun. And having kind of unmet basic needs, does not for a good therapist make. It doesn't. Like we, the reality of our situation in our jobs is that we need time to think, we need time to reflect, we need time to do CPD, and we need time to do self care. Because if you don't have that stuff in place, then you can't deliver the work that people need, and you're not worth the low rate that you're charging. Whereas now I feel like I you know, I'm charging a lot more than I used to charge, which means I see a lot less people, I also have other income streams now, which obviously, you know, the name 'Do More Than Therapy' of my community is all about how passionate I am about having those other income streams, because that really does help take the pressure off that hourly rate. But I think, you know, now I'm charging more what I'm worth, it means that I can spend that extra time on people, you know, I can write an extra letter, I can read an extra book, I can spend time thinking. And you know, I'm saying this not from a perfect position. As you know, you know enough of me to know I can't kind of lie about this and say I've got it nailed, because I haven't, I don't have enough time still, still in the struggle, but I'm definitely in a better place than I was a couple of years ago. And I just want to share with people the difference that pricing properly can make.

Yeah, and I think it is as well, you know, we all burnt out, you know, I think this year has been a particularly strong example of that. And I also think that, you know, the main thing that's finite in your life is the time you have to work, you cannot work more than a certain number of hours, even if you work all of the hours that you know, there is still a finite number of hours. But there isn't a finite price that you can charge. So you want to really think about looking at what, what you could charge and what you would need to charge and kind of push on through the pain of that as well. Because it is, it's totally a mindset thing that you can't charge that. You look at other people and go well, I can't really charge that. But absolutely you can. There's nothing stopping you doing that. And actually, I think sometimes you can look too cheap. If you're an expert in a certain area, and there's not very many of you, actually you absolutely can charge more and people would expect that you were more expensive than somebody who's just got general experience. So it's kind of selling your value to those potential clients and being known as something in particular that you're an expert in that means that you can charge more.

That is a really interesting observation. Because again, my experience was that when my prices were lower, my phone was ringing a lot less with new inquiries than when I put them up, it suddenly seemed to make me a lot more appealing on the directory sites in particular, which really surprised me at the time, but that kind of makes some sense of it. Maybe I was looking too cheap, maybe people didn't recognise the specialism so much because of it. I think that's really important, and especially there's a bit of a wider debate going on at the moment about the position of clinical psychology. I'm a clinical psychologist, we operate within quite a medicalised model where psychiatry is seen as king and psychiatrists typically might be paid three, four, up to ten times what we're paid, I've seen at times. And sort of within that system, if you're coming in and saying, yeah, I'll see you for 50 quid an hour, which I've been asked to work for that by some kind of rehab companies and insurance companies, then you're saying that relative to a psychiatrist, that's what we are worth as a profession. And I think if you don't believe that, you probably should look at your pricing, if that's how low you are. So yeah, I feel like I've gone on a bit of a tangent and a bit of a rant there, but I think this is actually quite a deep topic and it's intertwined with the values we place on ourselves, the values we place on our roles, and fundamentally what we think about mental health and what we think is a valuable service. I also should add at this point though, that all of that is really important, but if there's still part of you that screaming that you want to provide a service for people who are maybe in vulnerable groups where they can't afford these high prices, don't think that charging high fees means you can't help those people. Because you can charge really high fees for the small number of people that can afford to pay them, and then use that profit to do the good. Like, that's what social enterprise is, you don't have to call yourself a CIC even to do that. You can do that in a limited company, you can do with your profit whenever you want. And one of the things I do with my profit is see people for very low cost. And, you know, the Innovation in Mental Health Project is the name of my CIC and I hope to do a lot more with profit I generate. But I think people often feel like they need to charge this low rate to help people who are vulnerable. Vulnerable people, because they can't even afford to pay you 50 pounds an hour, that's the reality. So yeah, it kind of helps no one.

And I think that makes, and I think that's a really good point, which is that you know, it happens a lot, not just in your areas that people say, well I want to help the person that can't really afford me. It's like, well, you do still need to pay the bills, you are not a charity, and whilst you do want to help those people that can't afford you, you do need to be realistic about your own, you know, your own needs and wants in your life. And like you say, if you charge people loads, then you can afford to take on. But it's also doing those sorts of things consciously. So it's going, though I'm not just giving away all of your spare time to do something for free, but it's going well actually, every month I'll do X number of hours for free, or I'll do X number of discounted hours, or it's kind of that sort of thing. So rather than just going, oh, I'll do it, it's going well, how many clients do I need to have this really high price to be able to afford this many clients at this low price, so that you're not ending up with a massive amount of low paying clients and no high paying clients. Because I think, you know, there's all the thing of giving back, and the other thing you have to remember is if you're paying yourself more and you're earning more, you'll pay more taxes, which also helps all of that sort of stuff. So don't, there's not always the immediate thing, there's the other side of it as well which is if you're earning more you're contributing back in a different way as well.

Yeah, I think that's really important actually, I hadn't thought about the tax one for a while. But I think yeah, when we get caught in this kind of mindset trap of feeling like earning more is bad, makes us bad people, I mean gosh, we could unpick that for hours, couldn't we? And yeah, I really recommend people do do personal development around those topics. I'm going to be bringing some of that into the Do More Than Therapy membership. But yes, starting out with books like Denise Duffield Thomas, I can say it because it's my podcast Get Rich Lucky Bitch.

It's a brilliant book.

That's a really, really helpful book for unpicking particularly female mindset around money. I don't know, can you recommend any that are more kind of you know, non female?

Yeah, she's my kind of go to for that sort of thing. No, that's probably that, she's that, yeah, she's the main one. I think even if you're male, I think there's still, it's still a good thing, there's a lot about kind of how you, how money was talked about at home, that money doesn't grow on trees and all of that sort of thing. And I think you know, the sort of profession you're in people say, well, you shouldn't care about money and you know, you do all for the good. Well yeah, you do do it for the good, but crikey, you know, you don't need to be burnt out either. You're no good to anybody if you're burnt out or that sort of thing.

Exactly. It’s seeing the two things as antithetical, you know, money versus virtue. That actually doesn't make sense, because if I have no money I can help no one.

And it's not a sign of your worth, how much you're charging. So you know, we all have, it is all tied up because you're like, well, if I can charge X, then I can, you know, then that's, that's, and if somebody won't pay that, that's about my worth, but it is trying to separate that; the price in the end, and Denise always says this, the price is just the price, there is nothing else to it, you just pick a price and go for it and see what happens. You know, and you can always try different prices and see, see what happens, try it with new clients, you know, it can often be harder to pull up with existing clients. But as long as you give due notice and that sort of thing, then you know, keeping putting up your prices is important. And again, making conscious decisions about ones that you don't put up. If you decide not to, that's fine, but make that as a conscious decision that when they leave, the next person will be the next price up. So when you replace them, if they're coming out of, to the end of their sessions and that sort of thing, that you'll replace them with the higher price if you don't feel comfortable putting the prices up. But again, put prices up by a few pounds at a time every year and say in your stuff, I will be reviewing my prices on the first of April every single year. And then people expect that. I mean, you know, I think that happens with me, I see a chiropractor regularly, the prices go up every year. And it goes up by probably about a fiver every year. And I don't really notice, because I'm not gonna stop seeing them if they're the right person for me to see.

Yeah, no I think that's spot on. And when we think about other services that we pay for, and you know most of us will have had personal therapy at some point, we might be in it at the moment. I have not begrudged my therapist putting her prices up. In fact, sometimes I might have advised my therapist to put her prices up. But yeah, other businesses that I use, hairdressers, I'm very vain about my hair, so that's always the first example I think about.

No, I'm terribly vain about my hair too. I'm gutted I haven't been able to get it done for a month or so.

I know. But yeah, web developers, accountants like your good self, I expect all of these people to put their prices up regularly. So I think sometimes we need to question how special we think we are, or how special we think our clients think we are. Because I certainly, I've never had any pushback when I've put my prices up. So in three years I've put my prices up four times, I've expected backlash every single time, and it has never ever happened.

Oh yeah, that's amazing. Because I mean you, because you might get the odd one that says well no, but actually most people, it's too much effort, particularly in the sort of environment that you're in, they found you, they like you, they've got a rapport with you, they're happy to talk to you, you know, finding somebody you like is always, yeah, that you can open up to is really difficult. So actually, they found you, the fact that you put it up by 5, 10 quid a session is just not going to make the difference, particularly if they know that they're not going to be with you for years and years and years, or don't expect to be with you for years and years and years. But sometimes putting it for new clients can be, you know, can be a way round it if you feel uncomfortable. And again, it's the thing of going right, well I'll put it up for 90% of the clients and there are these few that I know can't afford it, but be careful of that. What do you actually know? It's amazing how it's that friend that you always think, oh I must totally split the bill, and they pay their exact thing. And then you discover that actually they're jetting off somewhere really, really nice, and you're like oh, I didn't know that they had money. So be careful of your own assumptions about what people can and can't afford. Because sometimes for things like therapy, people might say, well I'm prepared to sacrifice a huge number of things to be able to afford to do this thing anyway. I mean maybe not food, but you know, but actually that that was a huge priority in their lives, so they want to get that sorted. So they will pay way more money for that. And there'll be but also there's the person that says, oh well I can't afford expensive wine, but has their hair done every month for 200 quid, so it's just that they don't prioritise that sort of thing. So be careful of what you think people can and can't afford, because it's not always true.

Yes, that is such an important issue actually, as a therapist in private practice it's something that needs attending to just like any other kind of rupture in a therapeutic relationship. If somebody starts to say that they can't afford sessions, it's really important to confidently unpick that with them. Because sometimes there's reality to it. Absolutely there is. And you know, I've got a low cost therapy programme, and I have transitioned people onto it from my full rate, because something terrible has happened in their lives. And, you know, their financial situation has massively shifted. That's the reality sometimes. But equally, often that is not the reality and people are using money as a reason to end therapy. And by blindly just lowering your price for them, you're actually kind of not allowing them the polite way out that they were looking for. Or they're struggling to prioritise themselves, or maybe their family is struggling to prioritise their well being. There are loads of different ways of understanding it, but you have to formulate it, you can't just accept because it speaks to your kind of shame gremlins, that this really is about money. Because actually, that's not doing our jobs, our jobs are about formulating the problem. And you need to do that when somebody comes to you and says they can't afford you anymore. Because it might be true, it may not be, and there could be something that you need to work on with them around that subject.

And I think having a lower cost offering is often a good way around it as well. So those people that genuinely can't afford you, instead of saying, yes I'll put you straight, you know, I'll discount you by 50%. You say, well, actually, there's this, you know, I offer this, if you still want to continue, but it is a lesser, it is whether it actually is or not, but it appears to the client, that you are offering something less, because they're paying less so that you don't just discount your kind of regular thing. So you maybe have shorter sessions, or you have less sessions, you know, or whatever it is, but they kind of, they naturally fall into a lower cost thing. So that works, that works quite well.

Yeah, I definitely do that with non therapy stuff. So like, I've got you know, online courses and things where you can pay more, and then you get contact with me, or you can pay less, you get the same information, but it's all self-serve, like you just watch the videos. And I think that is, yeah, it's a really great way of doing it for those kind of products, like coaching services, educational things that we might be producing. I don't think it works so well for therapy, because we've kind of got an evidence base, and we know what's going to be affecting people. So, but when I think about what is different, if you're on my local therapy programme, you might have a wait. Whereas I sometimes run a waiting list for my regular services, but most of the time you can get seen straight away, but the low cost programme, just because the reality is I've got a set number of spaces that I can fill, so the reality is you might have to wait to be on it. And I think that's the difference, probably.

Yeah, and I think that, but I think it would be that the client is able to see that there is a difference, that they are paying for something less and that you're not just going oh, well, you've said you can't afford it, because their mate comes in, or they're, you know, somebody they've recommended and says, well I got it for 50 quid, and you're like, well, no, it's going to be, you know, it's going to be more than 100 quid and it's like, well I want it for that. But it's like, but if you can show that they had a lower, a lower offering, then, you know, and even if it is just that you've got to wait longer, which in your sort of environment absolutely makes a big difference, then I think that that makes a, you know that's a good thing to do. But it's making it clear that there is a difference, even if it's not a very big one.

Yeah, yeah, it is tricky. I think therapy is, I was gonna say unique, I know that that's a problem that we always think that we're unique, but it is a difficult service, you don't want to dilute the impact of it for anybody. You know, I would rather not offer it to somebody than offer something I thought wasn't going to be effective for them. But I think there is something about sort of making it clear, going through a process. And probably I think if I was a bigger enterprise, I would have some way of assessing, formal way of assessing like, is, is the low cost therapy programme, the best thing for you? Or would it be better to do some self study? Or would it be better to go on a waiting list for the NHS service? I don't have anything as developed as that worked out at the moment because I'm so tiny as an enterprise, but I think those are the things you need to consider. I think really the message here is just don't do anything without really thinking about it. Because otherwise you will just do what your, I call them shame gremlins, but you know, your money mindset issues, your imposter syndrome, whatever you want to call it, will take the driving seat, and they might not have your best intentions at heart. Whereas if you kind of are thoughtful, and don't do anything as a knee jerk, think it through, create a process and follow the process, then you're much more likely to get the right outcome for you and the client, I think.

Yeah, I think that's right. And I think it is, it's about consciously doing stuff and recognising what you can and can't manage, you know, and about how many hours you can work and how much you want to work and how exhausting you find the work and all of that sort of thing. And like you say about, you know, looking after yourself is really important, and how can you do that, and kind of just, you know, you've got the three variables, and there isn't much, you know, price is probably the biggest thing. So you kind of, you know, and it's one of those things that you think needs to be benchmarked I think a lot against competitors, but actually, you can charge what you want really.

Yes, I was gonna ask you actually, what are the biggest mistakes you see people like me, typically health professionals, making when we set our fees? And is that one of them this kind of benchmarking thing?

Yeah, is that you completely benchmark based on your competition. But you have no, unless you, I mean, you can probably find out, but you don't know what level of experience they've got, the sort of service they're actually offering? Are they offering the same level of service as you? They might be charging twice as much as you but are they delivering a great service, and do people recommend them, and all of that sort of thing. So be careful of looking at other people, because you're not really comparing apples with apples. You're always, there's always something slightly different. And lots of people come to you, because you're you not because you are, this price. People come because they have either heard you are the person to see, or they've been recommended. You know, if your business is very much based on referrals, the price is not the, is not, it's not, they're not price sensitive, people are coming because they're looking to talk to you. And that's I think the thing you have to remember is that, that actually, they're not looking for just any old therapist, they're looking to talk to you. And then the price is just the price. And I think it's kind of making sure that you remember your value. And that that value is clear in the marketplace. Whether you're overt about it or not, you know that you're clear about, you know, where you sit, what your niche is, and that sort of thing. And then you kind of don't have to worry about what other people are charging.

Yeah. And I think that's where the mindset piece is so important, isn't it, it's recognising that that is true, that you are valuable in a different way to your colleague, even though your colleague might be an amazing psychologist or therapist, and they might be charging less than you, you don't know why somebody would choose you over them. It's just bad psychology I think, to think that people are sitting at their laptop scrolling, looking for a therapist and making a decision on price. Because y'know, I know from times I've been struggling, that when I'm looking for the person to help me, the price is not the thing.

Yeah, so I relatively recently had some therapy for anxiety. And I didn't even know the price when I went in, because I found somebody who specialised in women with anxiety, particularly my sort of age. So I was like, actually, I'm not, the price was not the important thing. How quickly can I be seen? And do they have the right expertise, that I think that they're going to be able to help me? Not very bothered about the price. Yes, there are people who are way more price sensitive, but actually, if I'm looking to solve a problem, I'm not really that worried about the price, as long as I know roughly what it's going to be.

Yeah, I think, you know, there's always a lot of talk about, you know, should you put your fees on your website, for example? And I just think absolutely, yes. Because I don't expect that it's going to put people off who resonate with me who think that, you know, my blogs, my messaging, my podcasts, for example, they all kind of fit what they want in a therapist, if they've made that decision I don't think the price is going to put them off. But what might put them off is the fear of the unknown. You know, I think that awkwardness as a British person, having to say to somebody halfway through a like free consultation call, or even the first session, 'how much is this going to be?' is just awful. I remember going to a hairdresser once where I couldn't figure out the price. They did have a list, but I couldn't figure out where I fell on the list. Is my hair long, is it mid length, is it short, I didn't know. And I spent the whole time angsting over whether it was going to be 85 pounds or 115. Angsting over it, even though probably even if I'd known from the beginning it was going to be 115 that would have been okay. But I just couldn't stand the not knowing.

I think it's right. You also want to put off people who say you know what, that's too expensive, because that's about getting the right people and not wasting your time on free consultations with people who are not really prepared to invest, either because they really can't afford it or because they're not quite got themselves up the priority list or whatever it is, but that actually you don't want, you don't want tire kickers who are not going to be serious about investing in themselves. And, you know, you might say well you get more people in and all of that sort of thing, but actually, they do have to invest. You know, I do think that if you're investing in therapy in general, it's a reasonable investment, even at the lower end, because you're going to have to go for a few sessions. So actually, if you're investing in at 50 quid, then the difference of this type of investment, 100 quid is not that different, really. I mean, obviously, it's more, but it kind of, once you've got over the I'm going to invest, actually how much it is, it is slightly less relevant I think in the end.

That's a really interesting point. So I know that you've got a bit of a process and a list of things that you make people think about when they're setting their prices. Can you kind of share that with us?

Yeah, so I've got a pricing calculator. So the thing that most people forget to do is to add up how many client hours they actually work in a week, a month for whatever it is in a year. Because you often don't work as many client hours as you think you do. So I, you know, I would say, I'd like to say I work three client days a week, I probably don't. I probably can't really fit that much in, in the end, around the kids and stuff. And then you need to look at your business costs. So what your business takes to run. So if there are, if there are costs that are associated with your business, like maybe having a website, and all of those sorts of things, and keeping all of that up to date, plus any other costs that you have, and then how much you want to pay yourself. And then you work that out per hour, what that needs to look like. And it's often quite shocking, because you don't work as many clients, you can't put it over the total hours for the month, because you're not earning that. And that's what you then, you need to say, right, I'm earning this every, for every client hour that I deliver, that's how much I need to earn. So if you're only doing 10 hours a week, that's how much you've got to earn in every hour. And it certainly focuses the mind. So I often get people to do that and it's often a bit of an eye opener.

I can truly appreciate that. I've, I've used your calculator, and I've got the link for it and it'll be in the show notes to this episode. And I want every person listening to this to do it. Because it will come out saying that if you want to earn the equivalent of what you earned in the NHS, we're not talking megabucks, but the equivalent of what you earned in the NHS, you will probably need to charge much more than you think, to make that a reality.

Yeah, particularly when you want to, if you want to work less hours in order to avoid the burnout, and all of that sort of thing. I think that kind of really thinking about how many hours you work, but also how many days you work. So I've got kids, I don't work for quite a lot of the holidays these days, because it saves on, you know, I don't have to organise childcare. But that means I'm not working for 13 weeks of the year or something ridiculous. So you know, you've got to account for all of that as well. So actually, when you start really looking at how many hours you can actually bill, it's not as many as you think.

That is so important, because even, mine are too young to be at school at the moment and mine are two and four. And so I've had childcare that doesn't, doesn't take a break for the school holidays. But actually, yeah, my daughter's going to go to school next year and that's going to mean that there are half terms every five minutes. And that is gonna have an impact on the business and on what I need to earn in the time that I've got. And I think yeah, we forget that. And sort of I think it plays into this kind of idea that we can have it all at once and run the same kind of business we would do if we didn't have children if we do. And I think reality is there have to be compromises and in places and taking stock like this and looking at your pricing and how many hours. I think that's helpful in so many ways to help us take a reality check about what we are doing in our businesses, what we can do.

And it's also taking a look at what you actually charged, you know, what have you charged over the last few months? And how many hours, client hours have you worked? Because you probably keep a track of that, that's often something I say to people is keep a track of what you're actually doing in your type of environment, that probably isn't the case because actually people are working, you know, you probably keep much better track of the client hours that you're doing simply because...

Yeah, we all know exactly, we'll know exactly.

But I bet what you don't record is all the time that it takes to follow up, or that there's downtime. So if you're seeing a client, do you need half an hour each side? Do you, you know, for every client hour that you deliver, how many hours do you need to be able to deliver that? Because that's the other side of it as well, is that, you know, it's all very well, but actually if every client takes you two hours, basically, you need to be taking that into account when you're, when you're pricing as well.

And being honest with yourself about it. Because, you know, I do know people who see seven clients a day back to back, and they are okay on that. I was not okay on that. I need a buffer in between clients, and there's a cap, you know, I can only really do good quality work seeing three or four people max a day. And that, you know, even that feels like quite a lot for me, I know, it's not the same for everybody. But I used to lie to myself about that. And now I don't, now I sit down with your calculator and I'm really honest about the number of hours that I think I can do a good job for. And I'd really encourage everybody to do that. Think about how many clients you can see and do it well and feel like you're enjoying your work. Because you're not in private practice by accident. Like most people listening to this, who've started a private practice, they've done it for a reason, whether they've got caring responsibilities, their parents, they were suffering from burnout in an NHS job, there's always a reason. And I think if we don't take that into consideration, we can just end up pricing ourselves into a burnout job that's exactly the same as what we left.

Yeah I think that's right, and I think you know, you could look at, so I would encourage you to look at what it looks like now, and put that into the calculator, and then look at where do you want it to be? And then go right, well, how do I get from one to the other. And you start by putting prices up for new clients. And you start by doing the small, you know, not the small things, but the easy things. And but work towards it and just keep an eye that you're keeping working towards it all the time. It won't happen overnight, you can't suddenly double, you know, you can't you won't suddenly double your income overnight, but it's also going well do I want to double my income, or is it that I want the same income and see less clients, so it's being honest with yourself about what you want. So one of the things that I wanted when I started my business was to be able to get the school holidays off, I can't do that if I have a job, because I don't get that much holiday. But I have to recognise that there is a, that means that there is a limit to how much I can earn. And that that's important to me. So you have to make those decisions. And that's part of the process is being, is being clear and honest about what you really think are your priorities and where you want to be, you know, maybe it isn't about earning more, maybe it's just about earning the same, but with less stress.

And everyone has to be on board with that as well. Because I always think you know, if you've got a partner or you've got a family, a business is part of the family. It's not like a job where, because you won't get, and until you get really established, you're not going to know exactly what you're going to earn every month. Therefore the fact that you have a business impact on your family. And I think when you're setting out the values, the first thing I get people to do in the psychologists business plan, and in our business planning sessions is think about their values and what they're actually trying to achieve with this business. And I actually think that conversation has to be had with all members of the family. Because if somebody is expecting you to earn a five day a week salary, but you have set up this business in order to only work three days a week, something's not gonna work there. So it's about being really clear and making sure that everybody is clear at the outset about what this business is for, before you even start trying to calculate what you need to charge. I think that's so wise, thank you for raising that Sally.

Okay, so we've talked a lot about what the problems are that we typically have with pricing. So how do you help people to get back on track, because there's probably people listening to this thinking, oh no, I've made loads of mistakes, but what do I actually do now?

It's never too late. It's never too late. So get my pricing calculator which will be in the show notes and have a go at that. If you're really stuck, I do, I offer power hours. We'll put that in the notes as well. If you go to businessgrowthbynumbers.com/speaking there's all my kind of main freebies and stuff like that if that was anything else. I do have a quiz as well which always helps you to work out your pricing personality. And but yeah, so power hours are the main way to help further I think at this point. So yeah, it's quite a... so and in an hour we can certainly get to the bottom of where you want to be, and how we might be able to get there as well, so.

Brilliant. And also Sally is going to be coming in to do a masterclass for us in the new course that we're running in January, called the Psychology Business School. So it's a course that aims to help you build your practice in a way that allows you to live your values, help more people and avoid burnout. And I think we can see off the back of this episode, how key pricing is to that. So I'm absolutely delighted that Sally is going to be in there to do a masterclass for us on this topic. And you will have an opportunity then to kind of thrash this out with those of us who, you know, who've lived and breathed these problems. So you've got Sally's expertise, and combining that with other psychologists and therapists going through the same problems as you because I know, we have a real tendency to get stuck in our heads about this stuff. So I'm really excited to have a class where we can kind of get together and thrash it out as a group. So if you know that you need to set your prices properly from the beginning, or you need to put them right if you've been in practice for a while, make sure you come and join us for Psychology Business School in January. I'll put the details in the show notes.

So thank you so much Sally, that has been so valuable. I think there'll be a few people who want to listen back to this again, and make some notes. But yeah, we will be seeing you in Psychology Business School in January.

Brilliant, thanks so much for having me.

Before you go, I just wanted to check something out with you, because I don't know if this is just me. But do you sometimes wake up at two o'clock in the morning, worried that you've made a terrible error that's going to bring professional ruin upon you and disgrace your family? I'm laughing now, but when I first set up in private practice I was completely terrified that I'd missed something really big when I was setting up my insurance or data protection practices. Even now, three years in, I sometimes catch myself wondering if I've really covered all the bases properly. And it's hard, no actually, it's impossible, to think creatively and have the impact you should be having in your practice if you aren't confident that you have a secure business underneath you. But it can be really overwhelming to figure out exactly what you need to prioritise before those clients start coming in. So I've created a free checklist plus resources list to take the thinking out of it. Tick off every box and you can see your clients confident in the knowledge that you have everything in place for your security, and theirs. You can download it now from: https://psychologybusinessschool.com/client-checklist

Thank you for listening to this week's episode of the Business of Psychology podcast. If you share my passion for doing more than therapy, then make sure you come over and join my free Do More Than Therapy Facebook community where you can work on getting your big ideas off the ground with like minded psychologists and therapists. I'd also love it if you could leave the show a five star review wherever you listen to your podcasts. It will help more of the people who need it to find it. See you next week for more tips and inspirational stories to help you do more than therapy.

Ready to take the next step?

If you are starting out in private practice we’d love to support you on your journey. Come take a look at Psychology Business School if you are looking to build a practice that allows you to thrive, achieve professional fulfillment and live your values. Sally teaches a session on the course so if you need more support with setting your fees there is no better place to be!