Getting a grasp on fees

I do primarily small animal ambulatory work in the Midwest. I'm new to equine practice and trying to get a grasp on fees. There seems to be no rhyme or reason to the charges I've seen in our area. Help!

"Equine veterinarians, as a rule, don't charge nearly enough for their services," says Elise Lacher, CPA, a consultant with Lacher, McDonald Consulting in Seminole, Fla. "The problem is that practitioners worry about their clients' checkbooks and how clients will receive their fees. So they charge the same as everyone else or a bit higher or lower, depending on what message they want to send. Or they talk to a friend to figure out what their fees should be." Setting a fee schedule should be more scientific than this, says Lacher.

There are four basic models for setting fees, she says. And you can use different methods for each product or service that you sell. They are:

1. Competitive pricing. This applies to such shopped-for products and services as vaccinations and Coggins tests.

2. Cost-based pricing. For most products, you'd determine your cost and then apply a predetermined markup. Depending on your philosophy about being a one-stop source for your clients, you may or may not want to match Internet and catalog pricing on products.

3. Variable. You may want to develop wellness programs, offer favorable pricing for visits during "off" times of the year, charge premiums for after-hours calls, or build in other variable pricing concepts.

4. Value. With value-based pricing, you charge whatever clients are willing to pay and you feel comfortable charging. You may be particularly good at doing lameness exams, for example, and clients may be willing to pay you a premium fee for that knowledge.

"Whatever pricing method you choose, be careful that you've considered the costs associated with providing the service or product," says Lacher. For products, you can check your vendor invoices to get the actual cost. With services, talk to your accountant, she says, and also factor in your time, which should be figured at between $3 and $5 per minute, depending on your assessment of your value to clients.

Elise Lacher