Setting Your Fees
Independent Legal Nurse Consultants need to develop a fee schedule before they start marketing their services. Charge too much and you won't get customers. Charge too little and your business might be unprofitable. There are at least three ways to set a fee schedule. Are you using the best method? How do you know if your fees are reasonable but can generate a profit?
Market Price. Market price is the price that others in your field are charging for similar services. I don't want to be accused of price fixing so I won't discuss any specific prices. However, if you took a class and were told to charge a certain amount per hour, you were given a perceived market price for LNC services. Using the perceived market price to set your fee schedule is a quick way to set up a fee schedule but there are some problems with it. The fees you were given as the market price might be higher or lower than attorneys in your geographic area are actually willing to pay. Or those fees might not enable you to be profitable as a legal nurse consultant. To determine the true market price for your particular geographic area and services might take some adjustment through trial and error if you use this method of determining a fee schedule.
The 3 Times Rule. The 3 Times Rule of setting your fees is also very simple to calculate - you multiply your current hourly salary by three to cover not just the cost of your salary but also the cost of fringe benefits (such as insurance) and expenses (such as supplies, telephone, marketing materials and so on). For example, if you made $75,000 last year, that works out to about $36 per hour. Using the 3 Times Rule, you would charge 3 times your hourly wage or a fee of about $108 per hour which could be rounded up to $110 per hour. As you can see, this differs from market pricing because everyone makes a different salary and charges a different amount. While this method to set your fee schedule is easy, it may not enable you to generate the amount of profit that you want. You could also charge lower than what clients are willing to pay or you could price yourself out of the market if you currently make a high salary. And don't think that you'll make $250,000 ($75,000 x 3). You won't even come close to that number because not all the hours that you spend on your business will be billable hours. You will need to spend time networking and marketing as well as doing the other mundane things to set up and support a business.
Cost and Profit Model. The cost and profit model determines your fees by calculating your business and personal costs, the number of billable hours you are capable of generating, and the profit you wish to make from your business. This model requires you to come up with hard numbers for travel, equipment, software, insurance, and living expenses. It also requires you to identify the amount of profit you want to make. To make this calculation easier, go to FreeLanceSwitch. The cost and profit model is more realistic. It's also kind of fun to manipulate the different variables to see how they can affect your fee schedule. On the downside, it requires more thought and planning to use this model to set your fees. And it might change your expectations about striking it rich in the field of legal nurse consulting.