In this article I want to share with you a couple of ideas to help you work out what you really should be charging!
There are two very simple methods for working out how much you could charge for you services and how much your time is worth. Using these techniques will also help you determine whether you are doing things with your time that are moving you towards your goals and dreams – or frittering it away and wasting both time and money!
Most businesses (regardless of whether they are selling a product or a service) will set themselves a profit margin of between 30-50% and knowing this may help you work out your fee structure.
The first step is to work out your overheads – those are the actual costs involved in running and maintaining your clinic and any expenses you incur in order to practice.
Once you know how much it costs just to stay in practice you need to then add your 30-50% profit on top and divide by the number of people you treated the previous year and away you go!
Easy isn’t it?
When you are establishing how many patients or clients you see per year it is easy to think, for example, I see 100 patients a week so that is 5200 patients a year. But, don’t forget you may have a 5% non-attendance rate, you don’t charge 3 or 4 people who you see every week because they are friends, you take 4 weeks holiday a year and you spend another week attending seminars.
This has the immediate effect of dropping the number of patients you see to 92 over a 47 week period or 4324 patients a year (a drop of over 15% on your original figure!)
So, once you have worked out your true patient numbers, you can work out your charges per patient to cover your profit margin.
For example, if your overheads come to £50,000 a year you will need to earn £65,000 to cover a 30% profit or £75,000 a year to cover a 50% profit margin. If you know on average you see 4324 patients a year, then you will need to charge each one between £15 and £17.35 to cover your profit (this is the costs plus profit margin divided by the number of patients.) These figures do not include any money you may make by selling back-end products such as gels, heat and cold packs to your patients.
Another way to work out your worth per hour is to start with a figure you would like to earn and then divide that by the number of available hours in the year. For these calculations I usually subtract 8 hours a day for sleeping, leaving a theoretical 16 hours left when I can be up and at it!
Therefore, for example, if you decide you would like to earn £100,000 a year, you have 5840 hours in which to earn it (16 available hours a day multiplied by 365 days a year). This means every hour you need to be earning just over £17 every waking hour of the day
I like this second method as it helps to focus your mind on your goals and desires!
It reminds you that every time you sit down to watch the “soaps” on the television or do something else that isn’t very constructive or productive it is in effect costing you £17 per hour and also making reaching your goal that little bit harder to achieve. Knowing this, you can then decide if it is worth the cost you are paying for it and whether it will give you a return on your time equal to or surpassing your hourly worth.