How to Develop a Sliding Scale
"Sliding scale" payment options are not very common in most industries, but they can be very useful, particularly in rough economies or in low-income neighborhoods. Sliding scale essentially means each person pays what he or she can afford. The difficulty in creating a sliding scale is ensuring you have enough income to cover overhead costs, but that can be easily resolved by taking time to plan out your fee scale.
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Instructions
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Fee By Fixed Rate
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1
Add up your total monthly expenses. Include your rent, utilities, tools and anything else you might need, such as vehicles or gas. This figure is the absolute minimum you must make each month to stay in business.
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Assume all of your customers will be on the low-paying end of your pay scale. If the least a customer can pay is $20, divide your total monthly expenses by 20, and that will give you the number of minimum-paying customers you need to have to survive each month. For example, if your total expenses are $10,000 divided by $20, you will need to see 500 customers a month.
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3
Consider applying for a grant to pay part of your overhead costs. This can help you lower your lowest fee and pass the savings on to your customers. Grants are a particularly good option for those working in the medical industry.
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4
Create a few alternative payment amounts, such as $50 and $100, to go with the minimum of $20.
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Decide what income level should pay what fee. For example, people below the federal poverty line or your preferred annual income should pay the lowest amount. People just above that line up to, say, $60,000 would pay the next highest fee, while those above that line would pay the highest fee.
Fee By Percentage of Income
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Decide on what your rate will be; for example, 1 percent of monthly income or 10 percent of weekly income. Pick one number you will use in every case. You should, however, have a minimum and a maximum payment quantity; for example, $5 base fee and $100 maximum fee.
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Create a form that asks customers what their annual, monthly or weekly income is, depending on how you choose to charge.
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Divide the income by the percentage you charge. This number is the fee you will charge the customer, and it should vary from one customer to the next.
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Tips & Warnings
Keep in mind sliding scales are usually meant to assist those with a lower income who have no other options. If you want to hold on to your higher-income customers, offer a high level of customer service. You will most likely not have customers of the highest tax brackets, but those in the high middle-class income brackets will help your business succeed. If all of your customers are in the lowest brackets, you will probably be "just getting by," so try to aim for a variety of clients.
