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The Most Important Tip In Setting Your Fees

The Most Important Tip In Setting Your Fees

Determining an appropriate fee schedule can be one of the most important factors in your practice profitability. There are many variables that should be considered when setting your fees and ultimately you will have to decide what each service is worth in your practice. There are practical factors related to setting your fees and there could also be emotional elements as well. This is a lesson I learned while I was still in college.

One of my hobbies is woodworking and I enjoy all aspects of this craft. While I was in college at the University of Oregon I made most of our furniture for our small University apartment. I also worked in a work-study program at the University Craft Center where I had access to a fully-equipped workshop. The Pacific Northwest has a very active arts and craft community and I enjoyed studying from some incredibly talented Master Craftsmen. One of these amazing artisans taught me an unexpected lesson in fee determination.

This particular mentor was a guest lecturer at the University and lived a couple of hours to the east in a small town in the Cascade foothills. He invited me to come visit during one of our school breaks. I was excited to take him up on his offer to visit because he was in his early ‘80’s and I wanted to learn from him while I still had the opportunity. We set up a dinner appointment at his house. I greatly anticipated this visit because he was a Craftsman of the highest regard. His work was displayed in some of the finest museums in the country.

Once I arrived at his house I was very disappointed. He lived a very meager existence. I know that material things do not define success, but I just expected him to live a more comfortable life. We shared a very nice dinner together and after dinner I was drying dishes with his wife in the kitchen. I have never been able to hide my feelings very well and I must have had a look of disappointment on my face. His wife said, “You seem kind of quiet, what are you thinking?” I responded by saying, “I have the highest respect for your husband’s work. He is an absolutely amazing artist and his work is featured in some of the most respected museums in the country. I know that material things do not define success, but I just expected more for you.” She smiled and said, “Oh, I understand. You see, my husband is truly an amazing artist and craftsmen, one of the finest in the world. But he is a very poor businessman. You see, he doesn’t charge what he would like to get. He charges what he would like to pay.”

As I reflected on that statement, I began to comprehend what she was saying. Now, almost 30 years later I often think of her statement when I am reviewing client fee schedules. Is it possible that you don’t charge what you would like to get, but rather, you charge what you would like to pay? I’d encourage you to think about this as you determine your own fee schedule. Keep Smiling!