I’ve had my herbal medicine and nutrition business for going on eight years now. I’ve done everything from having my own office space for client work, owning and managing a compounding herbal dispensary, making herbal formulas for wholesale, being a practitioner within a larger clinical practice, independent contracting/consulting work, social media collaborations and brand partnerships, and all the behind the scenes successes and failures of owning my own business. It wasn’t until probably two years ago that I finally wrapped my head around managing my cash flow, and charging enough for my services to make my business not only successful, but profitable. Mastering the process of setting rates for herbal and nutrition consultations was a game changer for me, and this mindset trickled into every single additional service I offered, and totally transformed my sense of self worth not only as an herbalist and nutritionist, but as an entrepreneur and business owner. So, let me share with you just a few things to consider when figuring out how to set your own rates for services, and see where this can take you!
Considerations for setting your rates:
Local practitioner network | Who within your area (50 miles or so) is doing similar work? Is your area saturated with offerings similar to yours, or is there a niche you can fill? What are they charging, and would this be a comfortable financial model to fit into yourself?
Your level of experience | Take this into account when exploring your local referral network / local practitioner network, and set your rates accordingly. If you’re just starting out, perhaps setting a slightly lower rate (but *always* covering your business expenses) and gradually raising them yearly is a good fit for you. If you’ve been doing your thing successfully for 5+ years, this can acceptably be reflected in your rates for services and products.
Demographics | Look closely at the population and financial ability of your locality. What folks charge for services in LA is totally different than small town Ohio. If you’re offering goods and services virtually, this isn’t so much of a factor.
Your business overhead expenses | Seriously – look closely at this. This is a big determining factor of setting the costs for your services. Office rent, internet, software, computers, utilities, subscriptions, continuing education, actual products (bottles, herbs, packaging etc) included in your services, licenses renewals, travel expenses, marketing & advertising, debt, etc…so much more. It all needs to be covered. Get a handle on this overhead monthly expense ASAP.
Your personal standard of living | If you’re offering consultations, goods, and services as your 100% income, then aside from your business expenses, your standard of living must also be provided for in your rates. Keep in mind your own personal expenses, including rent/mortgage, health care, utilities, transportation, insurances, food, children/family expenses, plus all the extras.
Taxes | If you’re self employed, always allow 20% to go directly to your taxes. If you finally land at a rate for goods and services that you feel covers all your overhead expenses, provides for your standard of living, pays you a decent hourly rate, and is fair within your locality, automatically add on an extra 20% to that rate for taxes alone. (Note – this % may vary depending on your business structure etc, but it’s a good number to start with. I highly recommend working with an accountant your first year in business to make sure you’re covered.)
TIME | this such an important thing to devote your attention to for a little while. If you’re an herbalist or nutritionist offering consultation services or products, how much time are you really spending on each appointment or on product development? Not just the 60 or 90 minutes face to face with your client, but all of the before and after work that goes into that interaction? You need to account for this time, and pay yourself appropriately.
Example: If you’re charging $100 for a 90 minute initial consultation, remember the 20 minutes of email communication you spend prior to scheduling this and then 20 minutes of intake paperwork review before they come into the consultation. Then account for the extra hour you spend writing up their recommendations and plan / putting together their formulas / doing any follow up research for them / completing their chart notes. Then account for 30 minutes of post-email questions or follow up lab work review (if this is not covered in an actual follow up appointment). All said and done, that’s around 3.5* hours total. Now deduct 20% of that $100 for taxes, leaving you with $80. Now put at least 10% of that $100 for overhead / rent cost and that’s $10, leaving you with $70. Also deduct at least 15% for putting back into business costs (operating expenses/paying yourself for behind the scenes work later) and that’s $15, leaving you with $55. Now put at least 10% into your profit, leaving you with $45. Not including anything else, that means you’re paying yourself at most $13/hour. This $13/hour has to be enough for you to put some into savings, retirement, pay your living expenses, feed yourself / your family, pay for health insurance, pay off debt, put gas in your car or do anything self-care related. Is that enough? Probably not, considering you could only see two clients a day if you want to work 7-8 hours a day.
*Keep in mind that your efficiency and time management will get a lot faster with experience. That 3.5 hours will eventually look more like 1.5 or 2 after a little while.
Really sit down, and do the math based on what you need. Don’t set a rate based on what sounds affordable, what you think is “fair” to charge, or what you think a client is willing to pay. The bottom line is you need to make enough to support yourself and your business. You’re basing your rates on what you need to survive plus the abundance of a financially secure life. That’s why you started a business you love, isn’t it? For creative freedom and financial stability. Thus, set your rates according to what you really truly want, not just what you need to get by.
For a much more detailed breakdown of setting rates as a clinical practitioner, sign up to read the below article I’ve written for The Herbarium:
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Read More: How to Make a Living as an Herbalist
Photos by Renee Byrd