Written by: Rolande Sumner, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
The coaching industry is fraught with wrong information about money and pricing. Veteran coaches will tell you to start low and slow. In other words, it is common for a veteran coach to ask you to price your services at a comfortable $50-$100 per hour and then slowly increase your rates over time. Since this is the way they started their coaching practices, they don’t see any reason to do anything different.
I’m here to tell you that mindset is flawed. You are setting yourself up for imposter syndrome every time you think about raising your rates. There will be tons of testimonials, client’s telling you to increase your rates, and colleagues praising you. Deep inside, you will struggle to justify to yourself that you are not greedy or abandoning your tribe. Undercharging is a setup and will only fuel any ember of scarcity mindset lying dormant in your mind, thus keeping you broke.
Running a coaching practice is more than just asking empowering questions. It includes serving clients at a high level and all of the systems and processes necessary, which involves online learning platforms, systems, administrative tasks, and much more. There is no way you will be able to do all of that with just $50 an hour.
Undercharging equals overworking to make ends meet. So let’s do the math. You need $4,000 a month to meet your basic needs a have a little fun. You’ll need to multiply the amount by 3; ⅓ goes to you, ⅓ goes to overhead, ⅓ goes to future cash flow needs. Meaning you need to bring in $12,000 a month. $12K divided by $50/hour means you have to complete 60 1-hour coaching calls per week. Sixty clients, you are looking at a 99.6 hour week, which does not include 5 hours of client notes, 10 hours of sales and marketing, 1.6 hours of booking keeping, 8 hours of strategizing, and 5 hours for lunch.
I don’t know bout you, but I didn’t become an entrepreneur, so I could 100 hours per week.
Last, coaches shouldn’t charge by the hour. By setting hourly rates positions, you to continuously justify your fee to your clients. Regardless if you charge $50 or $500, your work will never seem to be enough. Offering a flat rate with confidence reduces and many cases, eliminates the urge for you or the client to itemize your time. You are still working, in some way, shape, or form, when you aren’t physically or virtually with a client. The stress of not having a client book every moment of every day will impede your everyday life enjoyment. For instance, how will you go on vacation and make the bills if you aren’t actively serving a client during your downtime?
Below are the steps of pricing your signature coaching program appropriately. At the end of this article, you will know how to price your coaching program appropriately so you may work a reasonable amount of hours per week and enjoy both your business, clients, and your life.
Step 1: Create The Outline Of Your Signature Program
An outline of your program will enable you to identify the below key features of your program.
Online Training Hours is an estimate of hours your client will spend reviewing the material independently.
Administrative Hours are time spent on client notes, client services, and other miscellaneous administrative tasks needed to serve your client.
Group Coaching Hours is the amount of time you’ll spend in group coaching sessions with your client through the entire program.
One on one Coaching Hours is the amount of time you’ll spend with individual clients personally.
Assessments also need to include debriefing time. Many assessments debrief sessions are approximately 90 minutes.
Additional work sessions help your clients complete complicated but necessary tasks with further assistance.
Step 2: Assign a price and time value to each item listed in Step 1.
Online Training Hours: $150/hr
Administrative Tasks: $25/hr
Group coaching per hour: $150/hr
One on one coaching per hour: $300/hr
Assessment and Debrief: $300 (generally a flat rate.)
Additional Work Sessions: $150/hr
Step 3: Assign the number of hours per client for each item in Step 2.
Online Training Hours: 24
Administrative Tasks: 6
Group coaching per hour: 12
One on one coaching per hour: 3
Assessment and Debrief: 1
Additional Work Sessions: 2
Step 4: Multiply the number of hours and their rates from Steps 1 and 2.
Online Training Hours: $150/Hr X 24 = $3,600
Administrative Tasks: $25/hr X 6 = $150
Group coaching per hour: $150/hr X 12 = $1,800
One on one coaching per hour: $300/hr X 3 = $900
Assessment and Debrief: $300/Hr X 1 = $300
Additional Work Sessions: $150/hr X 2 = $300
Subtotal: $7,050
Step 5: Add 1%-5% for the client gift budget and 10% for incidentals.
Client Gifts @ 1% = $71; Client gifts are customary.
Incidentals @ 10% = $705; Adding incidentals helps defray the cost of unexpected features you offer your clients along the way.
Grand Total: $7,826
Step 6: Calculate your pilot rate, 50% of the grand total.
Pilot Total: $3,913; A pilot that costs 0% ‒ 49% will not be enough to justify the price jump you offer once you fully launch your program, nor will it cover the essential cost of running the pilot.
Pricing your signature program is the only way you will be able to make more money, have more time, and make a more significant impact.
Follow the link below to copy and save the “Coaching Program Pricing Calculator” that clients in my startup development program, Business Launch Prep School, use to price their programs and pilots correctly.
Free Coaching Program Pricing Calculator ‒ https://pricecoachingprogram.lastco.vet/free
Rolande Sumner, Executive Contributor Brainz Magazine
Rolande S. Sumner is a retired US Army veteran and the CEO & Founder of Life After Service Transitional Coaching LLC®. Rolande served her country in the United States Army National Guard from 1995 to 2015. During her career, she was an Administrative Clerk, Heavy Vehicle Operator, and Human Resources Manager. She served as both a traditional National Guard Soldier and as an Active Guard Reserve Soldier. During her military tenure, Rolande received multiple honours: Afghanistan Campaign Medal, NATO Medal, Army Achievement Medal, Army Commendation Medal, Combat Action Badge, and the Army Accommodation Medal.
