As a natural health practitioner, how do you set your fees? How can you be sure that you are charging appropriately? Dr Megan Walker of Clinician Business Labs joins host E Brian Johnson to discuss why practitioners are not charging enough for their services and what kind of framework you can use to ensure you're charging appropriately. We're also going to get to that thorny issue of how to successfully negotiate a raise in your fees with your patients.
The Savvy Practitioner gives you the tools that you need to grow your practice. The series will teach you how to develop your niche, showcase your unique offering, leverage your time more profitably, and deliver on your ultimate goal of maximizing your impact - and your income.
Key Takeaways
Our Fee Structures Are Outdated
For most practitioners, money isn't necessarily a key driver. Most became practitioners to make a positive impact. The challenge is that at the end of the day, a practice is a business and to have an impact in our community and safeguard the livelihoods of people that we employ, the financial piece is critical. When they originally set their fees they did some local research, checked what their friends were charging, went online, and then put themselves in the middle. The expense of operating a business has risen sharply while fees have not.
Get A Clear Understanding Of Your Expenses
There are two categories of expenses that we need to look at to understand what it costs to operate your business every single month. What are your fixed expenses? Rent or split? Electronic health records, having an assistant, insurance etc. You then need to understand your operational expenses, what does it actually cost to operate in a variable context month to month?
What Does A Profitable Solo Practice Look Like?
You should be expecting 30 to 40 percent profit after the operational expense of your total billings. If 60 percent of your total billings are going to go to overhead, you’re probably not charging enough. You have to start to look at a diversity of income streams, which is part of the process for setting your fees appropriately.
Talk To An Expert
Get a financial planner. This is a critical piece so that you can start to understand how much money you should be putting aside. How much should you be investing? What do you need from an operational budget within your own life? Make a plan independent of your partner. Your income is a reflection of your professional designation and the amazing work that you put into the world, you deserve to be compensated for that.
First, get your personal financial house in order and understand what your debt load is, figure out what you want to accomplish, what you're going to need to pay rent or if you want to save for your mortgage. And once you have an understanding about that, then you can start thinking, how can my business be an engine, a vehicle to achieve those goals?
Innovate Your Offering
You quickly max out on what you can earn in your practice when you are reliant on one-on-one visits because you run out of time. There are only so many hours in your week that you can actually work with and see patients. But you help more people by innovating your offer, not by working yourself into the ground or lowering our prices.
Diversifying your income streams is also about leveraging your time effectively. As you delve into modernizing your practice, you're going to find that the time commitment that you have for patients one-on-one is going to start to decrease as you increase additional leverageable assets within your practice. And this is the type of outside-the-box thinking that you need to bring to your business.
Starbucks Anyone?
Worried about raising your fees? The average person spends about 5 dollars per visit at Starbucks. Many of us spend way more. As practitioners, we're actually asking patients to invest less per day in their health than they are already investing in their Starbucks. By the way, in North America, we spend about $2 billion a year on psychics
If your patients are not willing to spend $5 a day towards your health, you are probably not going to be the practitioner for them.
How To Raise Your Fees
Right out of the gate, you need to make sure your fees are competitive. Evaluate your financial standing annually to make sure you're not out of step. And then if you're sitting in a place where you are booked four weeks in advance, where you actually have demand for the service that you are supplying, then you are in a really great position to reevaluate where you're at.
What informs your fee structure is in part, supply and demand. If you're busy and really good at your job in your clinic, you should not have the same fees as the people who are having a trickle of patients come through the door.
You've also got to manage the conversation with your colleagues and you have to be prepared for the fact that they may be the ones who push back. Don't let that interfere with your confidence. Communicating with patients is the easy part. You simply need to inform them. Say to your patients, I’m writing to inform you that effective this date, we will be having a change in our fee structure. That’s that.
Check with your regulator but generally, six to eight weeks notice is sufficient to make that notice.
Key Quotes
“Talking about money is something that's often really uncomfortable for a practitioner. I want to start to normalize that conversation. If you are having a hard time understanding why patients don't want to make sure that they're healthy into their old age, I want you to ask yourself, why am I resistant to setting money aside for when I'm 75 years old? Both of them require that we are looking into future states. Both of them require that we step outside of our comfort zone. I actually feel like there's a really strong relationship between financial security and health”. Dr Meghan Walker
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The opinions expressed in this Nutramedica program are those of the guests and contributors. They do not necessarily reflect the opinions of Nutritional Fundamentals For Health Inc.
This video is intended for licensed or registered health professionals and students of health professions only. These statements have not been evaluated by the Food and Drug Administration. Information contained in these programs is not intended to diagnose, treat, cure or prevent any disease.
