Pricing your Healthcare Business Consultancy Services

This article is for you if you currently work within the NHS and are considering leaving to become an independent healthcare consultant.

For example, you may be a GP Practice manager, pharmacist, physio, data analyst, quality improvement specialist, HR Director, or finance manager looking to leave the confines of your current role and work on a range of projects as an independent consultant, and the topic of this blog is all about pricing your consultancy services.

In this blog, I:

?? Highlight some of the fears pricing your services

?? Provide 14 costs you will need to take into consideration when pricing your services

?? Share the pros and cons of daily rates and retainers

??Share some practical advice on how to develop a positive money mindset

The fear

Pricing your healthcare business consultancy can be a mind field with many consultants undercharging because of fear:

?? Fear of losing clients if you want to include an annual increase

?? Fear of seeming greedy

?? Fear of rejection and clients being put off from working with you in the first place

Or you may feel:

?? Because you love your work, you do not feel right about charging

?? That the work you do is easy and, therefore, not valuable

I have felt all these feelings. But I am not greedy; I do give a lot for free ( blogs, podcasts, resources, and introductory calls), I am good at my job, I am qualified to do my job, and there are no logical reasons why I shouldn't be paid for the work I do.

The same goes for you too.

Things to factor in when you are pricing your services

When pricing your services, it’s important you account for the following: Please note that the list I am sharing is based on running a Ltd company. (I have always held Ltd company status, even when I was its only employee).

1. Salaries
2. Professional Services like accounting, IT and maybe HR if you have a team
3. Ongoing education, certification, and training
4. Leasing office space and utilities if you do not work from home
5. Technology & Software like laptops, cloud services, project management tools (e.g., Microsoft Office Suite, Asana, Canva, MeetGeek, Docusign. etc.…..), and cybersecurity software
6. Essential office equipment like printers, paper, desks, and chairs
7. Travel expenses may include hotels, meals, and transportation for client visits or conferences.
8. Hosting client meetings, workshops, or events (venue rentals, catering, etc.)
9. Costs for advertising, digital marketing, promotional materials, and conferences to attract clients
10. Business liability insurances?
11. Professional Memberships
12. Taxes ( PAYE, Corporation Tax, VAT and personal tax on director dividends
13. Client fifts & hospitality
14. Employee well and team bonding

There is a lot to consider

You do not get holiday or maternity pay, and you will only get sick pay if you purchase insurance to cover this.

?? Does your current costing model take this into consideration?

Type of Pricing ?

Typically, healthcare consultants will either charge by the day or a retainer. Both daily and retainer fees have pros and cons. Your choice depends on the nature of your services, client expectations, and long-term business goals.

Daily Fees

Pros:

1. Flexibility: You can adjust your rates based on workload or project demands, allowing you to charge more for high-intensity days.
2. Clear Time Boundaries: Clients know they are paying for your specific time, which can help set clear expectations about the work hours you're providing.
3. Easier for Short-Term Projects: Daily fees work well for short, intensive projects where estimating the total amount of work required is difficult.
4. Immediate Cash Flow: You get paid for each workday, providing consistent and predictable cash flow if you have a steady stream of short-term clients.

Cons:

1. Income Unpredictability: Income can fluctuate significantly since the work is not guaranteed beyond the day or the project.
2. Perception of Value: Some clients may perceive daily rates as expensive, focusing on the time spent rather than the value delivered.
3. Time Tracking: You need to keep a strict time log and justify the work done each day, which can be time-consuming.
4. Discourages Long-Term Relationships: Clients may avoid long-term engagements if they feel they are paying high daily rates.

Retainer Fees

Pros:

1. Predictable Income: You have guaranteed revenue over the contract period, leading to more financial stability and easier budgeting.
2. Stronger Client Relationships: Retainers typically imply long-term partnerships, allowing you to invest in deeper, strategic relationships with your clients.
3. Value-Based Pricing: You’re paid based on your ongoing value and expertise rather than just time spent, which aligns with your desire to inspire and guide clients.
4. Less Administrative Work: You don’t need to track time in detail or invoice frequently, reducing administrative burdens.

Cons:

1. Scope Creep: Clients may expect more work for the same fee without clear boundaries, leading to overwork.
2. Commitment Risks: If a retainer client doesn’t renew, you could face a sudden drop in income, especially if you’ve turned down other opportunities during the contract.
3. Client Reluctance: Some clients may hesitate to commit to a retainer, preferring a more flexible, short-term arrangement.
4. Requires Strong Initial Agreement: You need a solid understanding with the client on what’s included in the retainer to avoid misalignment or disputes later.

Which to Choose?

• For Short-Term, High-Intensity Projects: Daily fees might be better, especially if the project requires significant flexibility or isn’t ongoing.
• For Long-Term, Strategic Work: Retainer fees aligns better with long-term, relationship-focused consulting.

For speaking and facilitator work, I charge by the day. For medium—to long-term projects we have retainers.

Money Mindset and Good Practices

Regardless of the type of business you aim to build, developing a positive "money mindset" is critical.

"Money mindset" refers to an individual's beliefs, attitudes, and perceptions about money. It shapes how they think about and interact with money, wealth, and financial success. This mindset will play a crucial role in influencing your financial decisions, behaviours, and the outcomes you achieve—or struggle to attain.

Some advice:

1. Learn to assign a monetary value to your skills, experience, and qualifications, which is determined by you and not others.
2. You need to read the market ceiling when it comes to paying for services like yours and consider your costs, which have been highlighted above.
3. When clients say no based on your price, it is helpful to think: They simply were not the clients for me, and that’s okay.
4. Remember, more people are likely to say no than yes. Again, This is OKAY.
5. You have to ask for the sale. Don’t expect people to just want to give you money. ?
6. You need to set a budget, especially during the good times, because what goes up will inevitably come down at points along your journey.
7. Schedule a monthly money meeting with yourself. I recommend having quarterly accounts prepared by an accountant. Keep close track, and don’t be ruled by emotions if you do not like what you see. Use this information to revise your business planning.

If you truly want to build a sustainable business, your revenue has to exceed your expenditure.

I hope this blog provides a little food for thought.

??About me

I am the founder and CEO of THC Primary Care and have been running my consultancy for nine and a half years.

I create resources to support the leadership and management of primary care networks and also provide:

?? Interim leadership and management

?? Facilitation

?? Consulting

?? Training

?? Mentorship and coaching.

To date, my team and I have supported over 220 Primary Care Networks across England.

Whilst I am not claiming to be the ultimate guru in business consulting in the healthcare space, I do have a ton of experience and lessons to share.

I am still very much the CEO at THC Primary Care and have no plans to leave what I'm doing because I’m truly lucky to say I love my business. However, creating this dedicated newsletter for those who are especially interested in building their healthcare consulting careers is an itch I have been wanting to scratch for a long time.

I also host the Business of Healthcare Podcast:

https://thebusinessofhealthcare.libsyn.com/324-behind-the-business-and-end-of-summer-update

Our library of over 300 episodes can be found here: https://thebusinessofhealthcare.libsyn.com

My Primary Care Network blog can be found here:

https://www.thcprimarycare.co.uk/blog

Lastly, on a personal note.

I am a mum to three teenagers, one of whom has type 1 diabetes and one of whom has a kidney condition, so life is busy. I’m also married, and in my spare time, I like to take part in ultramarathons.

I look forward to getting to know you and sharing as much as I can.

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