BUSINESS
Pricing
PRICING FOR
profitability
There can be few holistic businesses who haven’t had a turbulent couple of years. Rising overheads and an uncertain business climate mean that we need to reconsider pricing models in order to receive appropriate recompense…
W
E talk of charging a fair price for our services, but setting prices can be one of the most awkward things for a holistic therapist to get right. Women, in particular, are often reluctant to increase their prices. It’s similar to the pay gap between men and women, where 2020 figures suggest women are paid an average of 15.5% less than men for doing the same jobs. Women ask for pay rises less often, ask for smaller rises and get rejected more often than men. In effect, women are conditioned not to discuss income levels and that asking for more money, whether that’s a pay rise or putting up prices in their own businesses is not quite nice. Holistic therapists are often highly skilled and have invested heavily in their own training. They deal with the health and wellbeing of their clients, yet charge less per hour than skilled tradesmen such as builders, plumbers or car
mechanics. It’s about skills being recognised and compensated for at an appropriate level.
COSTS ARE RISING One of the main reasons that you need to consider whether you should increase your prices is that many of your overheads are likely to increase significantly in 2022. In April, the cap on energy prices appears set to rise by at least 51%. Not only is the average household energy bill set to rise by £600 this year, but your practice room will also be more expensive to heat and this may factor into your rent or running costs. Add in increases in mortgage rates or rents, council tax, business rates, income tax and National Insurance, as well as supply issues and spiralling costs for essentials like food and you may well be forced to deal with increasing overheads and living expenses. There are two options in this situation. You can either keep prices as they are and thus reduce your income
at a time when the cost of living is rising, or you can raise your prices. Essentially it comes down to whether a short-term discomfort about asking your clients to pay more is more concerning than the long-term discomfort of not being able to keep your business running or pay your bills.
DON’T GO FOR A MINIMAL APPROACH TO PRICING Often, we’re tempted to use a cost-based approach to pricing. This involves working out what it costs us to run our business on a monthly basis and then factoring in how many clients we see in a typical week. While adding in more clients can lead to more income, it can also impact on things like work/life balance and having time to develop and market your business. The danger is that we keep our prices so low, or use discount sites like Groupon to grow client numbers and then find that we are constantly busy, continually exhausted but not making much money.
UNDERSTAND YOUR WORTH Firstly, examine your banking records for the past three years and determine what you actually paid yourself. Go back further if the pandemic has had a major impact on your income, discounting this period. Next, work out how many hours you spend at work each week. This should include admin time as well as when you are working with clients and waiting time. Use this to work out your hourly rate. It may sound very obvious, but don’t confuse what your client pays you with what you pay yourself, because you need to factor in the costs of operating your business, like rent, utilities, training, advertising, business rates, National Insurance and professional fees.
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HOLISTIC THERAPIST 2022
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