What makes people laugh, cry, squirm, give, and throw temper tantrums as adults? (looking at you Kendall Roy of Succession)
Money is one of the most fun parts of being an entrepreneur.
But it’s also one of the toughest part of being an entrepreneur, too.
Today I’m interviewing, Bill Hershey, founder of Life Stream Business Services, to talk about pricing and how to nail it as a holistic health practitioner.
If something is in (parentheses), it’s added in by me!
Rachel: Bill, many entrepreneurs struggle with figuring out how to price their services. What’s the biggest mistake you often see them make?
💵 Bill: “Why is running an integrative health clinic so hard?”
I hear this a lot.
Along a similar vein, I hear practitioners say things like “I feel conflicted about my pricing.” This is one of the most common struggles I encounter with practitioners in business for themselves.
Most integrative clinic owners I meet went into practice because they really want to help people. Not necessarily because they wanted to own a business.
Yet due to the current state of our healthcare system, and our society’s poor understanding of integrative health approaches, integrative health practitioners are often compelled to start their own practices in order to serve to their greatest capacities and practice the modalities they are most passionate about.
The problem is that most practitioners focus their academic training hours learning about health – not business.
As a result, many clinic owners struggle with overwhelm and toe the line with burnout trying to keep everything going with their practice (all while helping their own clients deal with burnout).
There are, however, a few clinic owners that have found their way through to the other side of this struggle.
They learned how to get strategic with their business.
Why is it that financial health is so often overlooked in the integrative health repertoire?
That’s a very large question, that likely requires its own article (or perhaps a book).
But for today, I’d like to present that developing financial literacy and honing your business strategy are foundational to developing comfort around your pricing structure. Financial literacy is what allows you to approach your pricing in a strategic way.
I believe a big part of the solution is strategy plus financial literacy (and I also believe this is a big missing piece in the integrative health world).
Rachel: Can you tell us a little bit more about what you mean by strategy and financial literacy?
💵 Bill: Ideally, everything in your business can and should be intentionally designed to support your vision, values and purpose.
(amen to that!!)
Taking time to discover, define and clarify in language your vision, values and purpose is something many business owners across all industries overlook. But this is majorly important.
Your vision, values and purpose form the energetic foundation of your business. Businesses will often craft statements of their vision, values and purpose for marketing purposes, but there’s more to it than just marketing.
These aren’t just there to sound nice, but rather (when done well) these statements can and should be used to actively guide every decision you make in your business.
Business can be an artful expression of your vision, values and purpose. But just like making precise and inspired brush strokes on a canvas or chipping away at a stone to bring a sculpture into form, designing a well-run business requires skill, intention and effort.
Rachel: Can you give us a high-level peek into the things you take into consideration while deciding on a pricing strategy?
💵Bill: A good place to start is with your vision.
What do you want your life to look like in 5 or 10 years?
It may not be easy to think that far ahead. If that’s the case, sometimes it’s easier to describe what you don’t want your life to look like – you can always start there!
These are some questions I regularly ask my own clients:
- What do you want your lifestyle to look like? (i.e. in your business 5-10 years from now)
- How do you want to feel at the end of your day?
- How many hours a week will you work? What days?
- How many weeks per year will you take off?
(For a close-up view of this process, check out this recording of the Vision Planning Workshop that Bill runs at the end of each year. If you join the email list, you can receive an invitation to the next one – these workshops are usually free of charge).
Once your vision is defined in terms of lifestyle, we need to then apply a financial lens to evaluate the economic realities of “how do we make this work?”
Without the financial lens, a vision will likely sound nice, but it lacks the clarity of “how do we move from point ‘A’ to point ‘B’?”
Rachel: Can you break down the different methods you use to help someone reverse engineer their finances based on their goals?
💵 Bill: I often draw upon the work of Bari Tessler, a pioneer in the field of financial therapy, and author of the book The Art of Money when it comes to designing a business that supports a desired lifestyle. Bari encourages folks to map out three tiers of lifestyles based on various earning potentials:
- Survival lifestyle/income: what do you need just to get by, and what do you need to earn to support that (i.e. bare necessities)?
- Comfortable lifestyle/income: what do you need to feel a level of comfort in your life within reasonable means?
- Expansive lifestyle/income: what if money was not a barrier and you didn’t have to say ‘no’ to things – what might that look like, and how much would you need to allow for that? (I believe Bari uses a different term than expansive, but this is the one I use with my clients)
Once these are mapped out, this is where financial literacy skills really come into play.
By understanding your needs at these various lifestyle tiers, you can literally “reverse engineer” your pricing structure for your business such that it would be designed to support any one of these lifestyles.
In order to accomplish this feat of “engineering”, you will need to develop an understanding of the following aspects of your business:
- Business overhead expenses (i.e. insurance, utilities, software, licenses, etc…)
- Business direct costs (i.e. things that get used directly tied to a patient/client service, like supplement sales, lab kits, acupuncture needles, IV bags, etc…)
- Your service capacity (i.e. how many clinic hours you want to serve each week)
Coaching clients of mine receive “Reverse Engineer Your Pricing” workbooks, which help them understand the inter-relationship between lifestyle, business expenses, tax liabilities, capacity, and pricing.
Rachel: You know we often are talking about marketing in this newsletter. Can you help us understand when something is a “needs more marketing/sales problem” vs. a true pricing problem?
💵 Bill: I’ve seen clinics actually losing money on services, or barely breaking even on certain procedures if they don’t have a clear understanding around key considerations like overhead costs, direct costs and service capacity.
With one clinic client of mine, she had some questions around prices for a few of her procedures – she was worried they might be a bit too low. After running the numbers, it turned out she was not making money on several of them.
We modestly adjusted prices for a handful of IV procedures, injections and blood draws and the impacts were not small. As a result, we paid for a full year of my services just with those few adjustments!
And that doesn’t even count all the years going forward with this updated, more aligned pricing model. A little bit of financial literacy goes a long way!
There’s also a softer side to pricing that can’t be left out of the equation: values.
For example, how might one uphold the values of both “accessible healthcare” and “economic sustainability”, which allows to uphold the value of “work-life balance” for you and your team.
This cannot be done with black-and-white thinking. It requires dynamic thinking and requires holding values that may at times be in tension with one another. The development of leadership skills allows one to skillfully manage and guide those tensions toward either a release or a dynamic equilibrium.
Ultimately, your pricing should be a reflection of your values, as your pricing structure allows you to uphold your values in some form or another – whether that be through hiring talented professionals to provide the best quality of care, or making appointment times long enough so that patients do not feel rushed, and can feel seen, heard and compassionately understood.
Once you have clarity around the lifestyle, financial and philosophical considerations of pricing, the last piece is developing a level of comfort in presenting your pricing to prospective clients and patients.
I sometimes use the term “embodiment” in this context. “Embodied Pricing” means to develop a sense of naturalness and ease within your own nervous system around your pricing such that when explaining your pricing to a client/patient, there is no transference of your own internal discomfort. That’s really important.
Mark Silver (a well-known business coach in the holistic business community) offers a wonderful framework for developing this comfort in what he calls “resonant pricing”.
I also teach versions of resonant pricing using tools from Somatic Experiencing to help regulate the nervous system and process through some of the uncomfortable aspects of pricing. This interview I did with Suzanne Finder (another somatic practitioner) gives a sense of what this kind of work looks like.
The key point here is that if you don’t develop this level of comfort with your pricing within your own nervous system, even the clearest vision and apt financial skills won’t keep you from self-sabotaging in your enrollment conversations with your prospective clients/patients (I prefer to use the term ‘enrollment’ over ‘sales’ in healthcare).
Rachel: Okay, now for the fun questions! What book is on your nightstand?
💵 Bill: The Mahabharata and the Devi Mahatmya – both are books that bring me comfort during troubling times.
Rachel: If you were an herbal tea blend, what would you be and why?
💵 Bill: I’m a big fan of what Ayurveda calls “rasayana” herbs, which restore strength and vitality. There’s a special blend of Ayurveda herbs called “Dashamula” which literally means “ten roots”.
First off, I’m a big fan of trees. They stir my imagination and feel to me as if full of mystical power – especially big ones!
Here’s fun random fact to go with that:
Since I was a little kid, I could make my neck look like a tree by contorting my face muscles in outlandish ways. More recently I discovered the rudraksha tree which is distinguished by its ribbed roots that run up the sides of the tree – it kinda looks like that. It can weird people out when I do my “tree face” though, so I don’t bust that one out very often 😉
(*pausing to google rudraksha tree roots*)
On a more grounding note, I appreciate Dashamula for its ability to calm the nerves, strengthen and nourish the tissues, and keep things clean inside by promoting healthy detox. Note: this is for metaphorical purposes only. Consult your favorite Ayurveda Practitioner for professional guidance on these wonderful herbs 😉
Rachel: Thing you’re most excited about in your own business right now?
💵 Bill: I’m excited about my new path with Integral Coaching and how I will weave that into my services. I love working with folks to effect meaningful change and connecting deeply with what’s important to them. I feel blessed to have work like this that doesn’t feel like work.
More on Bill:
Bill Hershey, founder of Life Stream Business Services, supports integrative clinics with strategy, coaching, accounting and bookkeeping. He has taught business, marketing and money management with professional organizations like National University of Naturopathic Medicine (NUNM), National Ayurveda Medical Association (NAMA), California Association Ayurvedic Medicine (CAAM) and others. Living a quiet life in the forest and practicing a spiritual lifestyle brings him joy.
How you can soak up even more of his wisdom:
Bookkeeping: Bill will handle your business transactions through accounting software to produce clean financial reports on a monthly basis and meet with you quarterly to review your reports.
Strategic Advisory: Clarify your vision, hone your business strategy, set financial goals and track them through financial forecasting.
Business-Lifestyle Design Coaching: A personalized one-to-one 6-month business development program to help you strategically design a financially sustainable business to support your ideal lifestyle and the work that you’re most passionate about.