Factoring overhead into revenue targets

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I’ve found that many assessment clinicians struggle to set fees that actually support their lives and prevent burnout. In this episode, I break down a mathematical approach to setting your hourly rate by starting with your desired take-home pay and working backward. We explore how to account for the hidden administrative drag that often eats into our margins, the reality of overhead in testing practices, and why pricing your services correctly is actually a vital clinical intervention for the sake of your clients.

Main Topics Covered

• 00:01: Defining sustainable capacity and identifying cognitive diminishing returns in diagnostic roles
• 01:25: Calculating the 1:6 ratio of administrative drag to billable clinical hours
• 02:40: Setting a personal income goal and accounting for tax allocations and profit margins
• 04:15: Factoring in the high overhead costs specific to psychological assessment practices
• 05:00: Planning for annual billable capacity by pre-determining vacation weeks
• 06:10: The final math to arrive at an ideal hourly rate based on revenue targets
• 07:15: Implementing the rate by accounting for admin time within flat-fee evaluations
• 08:40: Conducting a true cost audit using time-tracking tools to find your actual hourly pay
• 10:45: The ethical case for high rates as a tool to prevent rushed data and templated reports

Cool Things Mentioned

• The Testing Psychologist mastermind groups and business consulting
• Reverb: the premier AI-powered report-writing platform for testing psychologists

Featured Resources

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The Testing Psychologist podcast is approved for CEU’s!I’ve partnered with At Health to offer CE credits for podcast episodes! Visit this link to access current and past episodes available for CE credit. You can use code “TTP10” for a discount on ALL the course credits you purchase from At Health! for a discount on ALL the course credits you purchase from At Health!

About Dr. Jeremy Sharp

I’m a licensed psychologist and Clinical Director at the Colorado Center for Assessment & Counseling, a private practice that I founded in 2009 and have grown to over 20 clinicians. I earned my undergraduate degree in Experimental Psychology from the University of South Carolina before getting my Master’s and PhD in Counseling Psychology from Colorado State University. These days, I specialize in psychological and neuropsychological evaluation with kids and adolescents.

As the host of the Testing Psychologist Podcast, I provide private practice consulting for psychologists and other mental health professionals who want to start or grow psychological testing services in their practices. I live in Fort Collins, Colorado with my wife (also a therapist) and two young kids.

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