Fee Setting - How much to charge for a
massage?
Fee setting is always a challenging
topic. How much do you want to make a year?
How much do you need to make a year? What is the going rate in your
area? What can clients afford to pay for your services? How
much would you pay for a massage? What are your expenses? There are
a few different methods to assist you in setting your prices.
First,
you can call at least 10 other therapist in your immediate area. You can pose as
a potential client or tell them you are doing research on pricing in your area.
Ask what they are charging. Ask if they charge a different rate if they
are billing an insurance company. Ask what codes they use when billing and
insurance company (this doesn't really have much to do with setting your fees,
but you may find this helpful later on). Take the average of the 10
fees and find use this as a base for determining what you want to charge.
Take into consideration things like extra training and extra services you might
be providing.
Figuring what your cost per client is
another way to
assist you in making decisions about your business. Once you know that,
you will be able to decide whether or not you want to become a provider for
insurance companies that don't pay as much per hour. You will be able to
set your fees to make what you need to be a successful business.
Or use the following formula to find out how
much you should charge.
1. Figure out how many days a year
you can/want to work. Start with 365 days in a year minus 2 days
off a week (weekend). This leaves 261 days a year to be working.
Then subtract the holidays (8), and vacation days ( how many days
off a year) and take out a few days for sick/ personal days and what are
you left with. _______________
example: 365 - 104 =261 - 8 (standard
holidays) = 253 - 10 (vacation days) =243 - 12 (sick/personal days) =231
total work days per year.
2. Multiply the number of days by
the number of hours ( massages or sessions ) you work per day ______________
example : 231 x 4 = 924 (hours
you work per year)
Do you want to factor in the time spent
on paperwork, insurance billing, soap charts, phone calls, etc.?
Figure about 30% per massage. ______________
example: 924 - .30 = 647 (
total billable hours work per year)
3. What are your office expenses?_________________
-
Office expenses - rent, phone, advertising,
etc.
-
Education- CEU's
-
licensing, liability insurance
Example : $1,000 office expenses
What are your personal expenses?______________
-
Rent/ Mortgage costs
-
Food
-
Transportation
-
Entertainment
Example: $2,000 personal expenses
Then here is the shocker! Add up
all your expenses and multiply by 30% for taxes . Yes, 30% that is
if you are self employed. Tax situations will vary depending on expenses,
etc. Contact your accountant/tax advisor. You have to pay self employment tax which
is much more than if you work for someone else as the employer pays almost
half of that tax.
Example: $3000 x .30 = $900 taxes
What are your total expenses per year?
____________________
Example: Total expenses : $3900 per
month x 12 = $46800
4. Divide The total expenses by the
total billable hours for the hourly rate :
$Expense /hours = $ hourly rate
Example : $46800/ 647 = $72.00 per treatment
5. Then you have to take into consideration
the going rate in your area and do you have a full schedule of clients.
Are you just starting? Are you going to be raising your fees?
Will you lose clients if you charge more than they can afford? Are
you really providing a service that is worth the price? Will you be
getting more clients that will decrease your cost per client?
Setting your fees is a crucial part
of starting and building a massage practice. Running a successful
business depends on making money. While there are
many tools that can assist you in figuring out what to charge, the real issue is
what do you need to charge to make a living. If you find that you are
faced with your fears (false beliefs) such as "I am just starting
out. I can't charge that much" or
"That's higher than the going
rate in my area" , you may want to consider working these issues out with a
supervisor.
Learn more about setting fees or share your ideas
about setting fees on the
massage blog.
