How to set your coaching prices - createdmindacademy.com

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How to set your coaching prices

Is the price you’ve set for your coaching offering a random number you’ve picked or an angel number you picked because it looks cute? Well, you shouldn’t be doing either of those things.


In this episode, I’m walking you through EXACTLY how to calculate your coaching prices step-by-step so you can pay your expenses, pay yourself AND make a profit. You’re going to need a pen and paper for this one!


Coach Certification Course – The Created Coach Method


Free Training – Stand Out Coach Training


Website: createdmindacademy.com


Instagram: @brookalexander.co


I am not an accountant. This information is provided for general informational purposes only and does not constitute financial, investment, tax, legal, or accounting advice. Speak to your accountant.


When you first start, don’t try to go for a high price or “charge your worth” your priority is working with as many people as possible. If you’re not getting clients, the solution isn’t to lower your prices, it’s to make more offers and pay attention to your thoughts and feelings you’re having about your offer/pricing/coaching abilities


1. Figure out your business expenses


  • online course platform
  • email service provider
  • contractors/freelancers
  • coworking space
  • website & domain
  • continued learning – courses, books, etc.

**eg. $1,000 /month**


2. Figure how much time you spend working on and in your business.


This is split into two categories: working on your business and working in your business. Working ‘in’ your business is spending time managing your business as it is today. Working ‘on’ your business is investing time so your business can be better tomorrow.


Working ON biz activities: management + strategizing


  • marketing – social media, podcasting, content creation, email marketing
  • nurturing leads
  • product development
  • strategy planning
  • creating systems
  • continued learning – courses, books, etc.

Working IN biz: things that directly bring in money


  • client work – calls, DFY work, email/voice note
  • group calls

*calculate the total number of hours worked and multiply that by the hourly rate you want to make.


  • eg. 30 hours at $80 per hour
  • eg. 30*80*(4) =$9,600/month
  • $9,600*12 = $115,200

CAVEAT: START SMALL. If you’re yet to make any money in your business, set a goal of $1,000 per month and figure out how much that would equate to hourly. Maybe you can only dedicate 15 hours per week because you have another job.


  • eg. $1,000/(15*4)(60 hrs per week) = 17

3. Determine what you want your profit to be


So far you’re only breaking even. You’re only making enough money to cover your bare minimum expenses but you want to make more money so you can invest the profits back into your business.


  • stretch 60%
  • average 40%
  • low 30%

**eg. $2,000/month**


  • add the totals: $1,000 +$9,600 + $2,000 = $12,600
  • $12,600*12=$151,200/year 
  • add on the tax: $151,200*1.25 = $189,000

4. Divide the total between the number of new clients you can take on each month.


15 clients at max capacity are 5 clients staggered each month.


  • $189,000/12 = $15,750
  • $15,750/5 = $3,150 per client

This doesn’t take into account business expenses which will lower your taxable income and it doesn’t take into account different tax rates. depending on your country your tax rate may change depending on how much you earn.


This is to show you that your prices should not be a random number. You need to pay yourself!


CLICK HERE FOR UNEDITED TRANSCRIPT OF THIS EPISODE


Hello and welcome to this episode of the, of course, you did podcast. My name is Brooke. I am your host. Hello, welcome. I’m excited to be here. I’m excited to share the stuff that I’m going to talk about with you. In this episode, I’m going to share, I’m going to, I don’t know if that sentence makes sense, but anyway, I’m excited to chat about the stuff that we’re going to chat about today.


And I’ve written a whole bunch of notes because there is a lot to go through. There is a lot to go through. I’m literally breaking down. What I do with my private clients and how I help them create their prices and how I help, how I create my own prices. I don’t help myself with great prices. I mean, I guess I do coach myself.


So it kind of was. All right. In this episode, as you can tell from the title, we are going to talk about how to structure your prices, how to create your prices, how to know what to actually charge for your coaching. Offers. These can be courses. This can be one-to-one. This can be a group program. I want you to take the information that I’m sharing with you here and apply it to you.


However you need edited, adapted, do what you need to do before I get into this, I have a little disclaimer for you. I need to make it clear that I am not an accountant. This information is provided for general, informational purposes. Only and does not constitute financial investment tax legal or accounting advice, speak to your accountant, run it by them.


This is just general information. Make sure you’re having experts help you with the things that the experts. With all right, let’s get into how to set your prices. The reason I want to talk about this today is that so many people like most coaches. And when I first started, this is what I did too. I would pluck a random number out of the air, and that would be.


The price that I would charge, or it would be something super cute taunting, like 1, 1, 1, 1, or 2, 2, 2, 2, like anyone else gives a fuck about that shit, but me, like no one cares. Those numbers are not going to make someone. I mean, maybe they would make some people more excited to buy it, but listen up, you are a business owner.


You are a CEO. You’re here to do the. In a sustainable and strategic way. If you want to have your business long-term, you need to take all the things I’m going to talk about today into account. It’s so important. I’ve seen so many people talk about how much you should charge and how to set your prices.


And it’s completely off the mark. It’s completely off the mark. Anyway, that was like my little kind of rent. Something that I do say to my clients when they want to charge their prices, especially if you’re very new to coaching or very new to receiving money from people for work that you do. I always, always, always.


Charge a price that you can confidently say, charge a price that you can get behind. Because if we do all of this work here and you, aren’t confident with the price that we come up with, then you’re not going to sell. You’re not going to make offers to people. Right. Then you won’t make money. So it’s still really important that you do the work to get behind the price that you’re going to charge.


This doesn’t mean that if you’re not behind the price, you should lower the price, this means that you should have the price because you are a business owner and you’ve done the work strategically to figure out how much you actually need to make in your business. This doesn’t mean lowering your price.


It means do the thought. Do the mindset work, do the energy work to get behind the price that you need to charge in order to have a sustainable business. I’m feeling very fired up and very passionate about this one, because this is a topic that I love to talk about, and I’m actually really passionate about it.


And two I’ve had a day, which feels like it has just been like. Chaotic to say the least I’m fired up. I took pukka for a walk and he was the worst Walker he has ever been. He got away from me, ran, and tried to play with some other dogs that were like one-fifth of the size of him. And they don’t like to play with another dog, like jumping on top of them.


He was biting at the leash. He was. Being so naughty. And so I’m just feeling really fired up from that. And also there’s a lot going on in the world right now, a lot going on though, which I really should stop paying. No, I shouldn’t start paying attention to it because it’s important. And it’s literally a country that I love.


And it’s so sad to watch it kind of what seems like crumble right now. Anyway, enough of that let’s continue. All right. Let’s talk about when you are first starting coaching. Even though we’re going to go through, I’m going to walk you through literal step by step. This there’s going to be math in this episode, get a pen and paper, do what you need to do.


When you first start working as a coach, don’t try to charge a high price or charge your worth. Your priority is working with as many people as possible. To build up your skills as much as possible to get as much practice coaching as possible and to figure out all the kinks in your process so that you can confidently say every single time.


Pretty much every single client that you can help them get results. I’m going to go right up to the line of saying that you can guarantee results. I’m almost crossing that line right now. I want you to get, as far as you can confidently say, you’re going to go right up to the line of being able to say that you guarantee results and.


Coming straight out of the gate of your coach training, or even if you don’t do a coach training, even before that, if you come straight out of the gate with no experience, no practice, no testimonials, no coaching skills. And you want to charge $5,000 for a three-month coaching package, just because you got to charge your worth and you are abundant eight F um like you’re not going to get clients.


You’re not going to get the amount of practice that you need to get. Now, there are exceptions to the rules. I’m not talking about that. I’m talking about the 99% 99.9% of us that are no exceptions to that rule. When you first start, your priority should be working with as many clients as possible.


Might mean for you that you’re going to charge prices that are lower than you would like to make long term. The thing is the price that you start out charging is not the price that you have to change forever. This is a price that’s going to get people in the door to work with you so you can see.


Getting practice, getting experience, working out all the kinks, working out your fears, that kind of stuff. Now I know, I have said so many times before don’t charge so little that you feel like you are resenting the work or that your client doesn’t do the work. There is a balance. And I can’t tell you what that balance is.


You have to find that. You can play around with your prices. You can charge different prices, but when you’re straight out of the gate, you’re going to have to charge lower prices. At first, you’re going to coach for free. My recommendation is to coach for free for a little while, and then start charging a price that people can get behind.


Only for the purpose of you being able to get practice. When you first start a business, it’s not about becoming a millionaire in one year, your, your job is about your clients. Being a coach is about your clients. And in this perspective, the best thing that you can do for all of your clients is to get as much practice coaching people as possible.


Another thing that I want to say here is that if you’re not getting clients, the solution isn’t to. Isn’t always to lower your prices. I see this time and time again, where someone will have an offer, have a group program, coaching, whatever it is, and then they will, and no one buy it or very few people, but so their, their solution, what they think is the correct solution is to lower the price or cut down the amount of time that is part of the offer.


So instead of making it. Two months, it becomes one month. So then they can cut the price in half. This is not going to necessarily be the best course of action for you, because if you are not confident selling something at whatever price you’ve said it at that doesn’t automatically mean that you are going to be more confident selling it at a lower price, because think about the energy that you’ve gone in with.


Creating that price, the energy that has gone behind gotten behind you, lowering the cost of your offer. The energy, the thoughts are most likely people don’t want to pay this. People don’t have the money for this. People don’t think I’m a good coach. I’m not a good coach. Not enough. People are seeing what I’m doing.


Pay attention to that because that’s going to be the energy that you go into. Selling at the reduced price, and that’s not going to get you the results that you’re after either. The solution is to make more offers and to pay attention to the thoughts and feelings you’re having about your offer, your pricing, your coaching abilities.


You need to do the work first to get behind. The price that you’re charging, not charged lower and hope for the best, unless you’re the person who’s come out and you’ve just finished your coach training and you’re already charging $10,000 and people. Budging in that situation, you know what you do, you, I’m going to say either do the thought work to get behind $10,000 a month.


But if that’s going to take a really long time and a lot of work for you to do, and you need to make money now in that case, the solution probably is to lower your prices a little bit, be realistic about the price that you’re charging. And this isn’t always about. I’m going to charge so much money because I’m worth it and I’m abundant.


And if I don’t, my clients won’t do the work, et cetera. Your job is to help as many people as possible. Your job is to provide as much value as possible. The best value you can provide is in your coaching. So you need to do what you have to do to coach as many people as possible. Your Instagram. The, the value that you bring to people, your webinars, your emails, your podcast episodes, these aren’t the value.


They’re not the highest value. You’d give people the highest value you have to give people in this coaching space is by coaching them. Okay. Enough of that rent. Now we’re going to get into it. So I literally have the steps here. Step one, three, blah, blah, blah. We’re going through it all. I’m going to walk you through it.


If you need to listen to this episode. You can, I’m going to go through it as slowly as possible. But as I said, I’m fired up. If you need to slow down the listening speed that you’re listening to me because I’m talking too fast, then you can do that. That’s totally fine. The reason also that I’m going into more depth in this is because I did a reel on it.


And I actually, and I really enjoyed the real, I actually really like talking about this stuff and I wanted to go into more detail. A real, I can only, I’ve got like 60 seconds, so I have to get through as much as possible. So I want you to write down now, step one is to figure out your business expenses.


So this is an online coast platform, email service. Contractors freelances. If you have a coworking space, your website domain continued learning. So this is courses and books. These are business expenses. Any courses that you do, any books that you read, anything that you do? Pay for that helps you learn or get better at your job business books, coaching books, the create a coach method is an a business expense, which is obviously our coach certification course.


These kinds of things. I want you to figure out all of your business expenses, maybe for you, it’s just your website. And. Google drive Google drive doesn’t cost. I think it only costs money if you have like a lot of stuff. So maybe you don’t even pay for Google drive. Maybe it’s just your email and your email service provider.


I mean your website and your email service providers. So flow desk or active campaign or MailChimp or something like that. Figure it out. All of the money that you spend in your business. I spend money on loom. I pay for Calendly. I pay for Canva. I pay to the show it. I pay for my Google domain. I pay for my own business email.


So the email accounts that we have that finish in creative mind, academy.com I pay for. So many things continued learning. I pay so much money on continued learning. Honestly, that’s my biggest business expense is continued learning courses, training, et cetera. So I want you to figure all of that out. You might have to go through your email to find all of the invoices that you’ve been sent.


You might just need to take a week to think about it. If you need to think about all the things. Different ones pop up in your mind. That’s okay. For this example, I’m going to say that it’s $1,000 per month. Okay. So you’ve done the first step. The first step is to just figure out how much it’s costing you to run your business in terms of the things that you pay for your outgoing bills each month.


Then the second step is to figure out how much time you spend working on an. Your business. So these are two Kettering categories. This is I’m talking about the hours that you spend actually working in on your business. We have two categories here working in your business is spending time managing your business as it is today, working on your business is investing time.


So your business can be better tomorrow. I’m going to go through an example of what these. So working on your business activities. Could be marketing. So social media, podcasting, content creation, email marketing, things like nurturing leads, product development. So this could be creating your courses. And the time that you spend actually at your desk creating the.


Recording the course uploading it, strategy planning. So planning out the, the quarter and the causes that you want to have for the quarter or the coaching that you want to do for the quarter or the ideas that you have creating systems. So this could be things like. Um, just any kind of systems that you have in your business.


I have systems for, um, when students join the creative coach method, I have systems for training VAs and people that I hire. And then also in this category would be the continued learning. So how much hours do, how many hours do you spend on continued learning, doing other courses? Reading books about business and coaching, listening to podcasts, stuff like that.


So that’s working on your business and you’re also going to figure out how many hours. In your business. So these are things that directly bring in money. So this could be client work. So actually getting on zoom calls with your clients, the work that you do outside of calls for your clients, this could be reviewing materials that they’ve sent you.


This could be done for your work. So if there’s anything that you do for them, maybe it’s website stuff that you do for them, maybe. What kinds of things in coaching there isn’t a lot of done for you. So if you’re the kind of person who combines coaching and consulting, then you would have more done for you.


If you’re doing just pure coaching, you’re not really going to have any done for you because that’s not coaching, but what else could be, maybe you’re creating Canva templates or you’re helping them create email sequences or website copy stuff. Emailing you, your client’s voice, noting them going on macro polo, whatever things that you do in your business that are the direct money-making activities.


All right. So now, you know, how many hours per week you are spending actually working on an, in your business? Do you know? Okay. For example, in this example that I have here, it’s 30 hours. Now, what you need to do is calculate the number of hours that you’ve worked. Sorry, someone’s drilling something outside all day.


I don’t know if you can hear that, but calculate the number of hours you work. So we’ve got 30 hours a week and multiply that by the hourly rate that you want to make. So for example, this person in our example is working 30 hours a week and they want to make $80 per hour. So that comes down to $9,600 a month.


So now we know how many hours a month you work and how much you’re going to get paid, how much you want to get paid for those hours. The caveat here is to start small. If you are yet to make any money in your business at all. Then set a goal of $1,000 a month and then figure out how much that would equate to hourly.


So maybe if you’re a brand new coach, you can only dedicate 15 hours a week because you have another job, which is totally fine. Something I definitely recommend if you are just starting out. All right. So for our example here, $1,000 a month. Working 15 hours a week. That’s 60 hours a month. We want to figure out how much hourly $1,000 would come to.


So it’s 1000. Divided by 60 equals 17. So this person in this example wants to make $17 an hour. So we need to figure out, and this step here of figuring out how much you want to make is this step that most people miss, you need to calculate how many hours you work in your business and what you want to get paid for those hours.


What’s the dollar rate that you want to make per hour. All of the work that I’ve just done here in step two, it might seem like a lot, but that’s what we’re getting down to. We just want to figure out how much per hour you want to make. We’re not charging our clients per hour because we obviously don’t just work one hour with them, but we want to figure out how much we want to get paid and to do that.


We need to figure. How much we spend time, how much time we spend in our business overall. So, so far we know how much our business is spending each month on the first step. Now we know how much we also are spending. Ourselves, how much we’re going to pay ourselves. This is the step that most people miss.


Most people just say, okay, my cost platform costs this and my website costs this per month. And then that’s, uh, I’m. I just need to make this to break even. No, you are. You’re not you’re in debt. You are not making enough money at that point, until you figure out how much you want to pay yourself, then.


That’s it. You need to figure out how much you want to pay yourself. I got to stop rambling here. I feel like I’ve been talking for a long time. Okay. So now you know how much your business spends, you know, how much you want to pay yourself in addition to what your business spends. Now you need to step three, determine what you want your profit to be so far.


You’ve only been breaking even you’re only making enough. To cover your bare minimum expenses, which is your business operating costs, plus paying yourself so that you can pay your bills and, and eat food. But you want to make more money than that so that you can invest the profits back into your business, that you can do other things.


You can determine this as just a dollar value, or you can actually create this as a percentage of your, your actual business expenses. You can do whatever. For this example, I’m just going to keep it simple because we’re on a podcast episode. When I’m working with my clients, private clients, we figure out, we can go into more detail into what profit margin we’re actually going to generate what we actually want to add into our business here.


So there are more steps than I want to go into here because I feel like I’ve already talked about a lot, but for this example, we’re going to say it’s $2,000 a month. We’re going to say that we want to make a profit of an additional $2,000 a month, so we can invest that back into the business. In other things.


Now we need to add the totals together. So we have the totals of $1,000 for our monthly business expenses. Plus $9,600 for the monthly income that we want to pay ourselves. Plus $2,000. So this is $12,600 a month. That’s how much money we need to make each month. Perfect. Now let’s figure out what that is.


Per year, $12,600 multiplied by 12 equals $151,200 per year. This is before tax. So don’t forget that you’re going to have to either pay tax on this $151,200, which is going to take all of everything else down. So you’re going to be paying yourself less. You’re going to have less for your profit and less for your business expenses, or you can add on the tax.


This is what I like to do, so we can do this as $151,200 multiplied by 1.25. This is assuming a 25. Tax rate, this is going to be different for you, depending on where you live. If there’s federal tax, state tax income tax, a tax bracket that you’re in, it’s all going to be different. So I’m saying 25% here, but this is where you need to find out from your accountant or from whoever the.


What your tax rate would be if you were making $151,200, you can find out what your tax rate would be from there. And then subtract that from how much you’re going to make. Or you can say, okay, let’s estimate that it’s going to be 25 or 35. Add that on. So 25% tax rate on this would be $189,000. Now, then you would need to check with your accountant and say if I make $189,000, A year, what would my tax rate be to find out?


All right, we’re at step four, we’re almost there just a little bit more math. Now what you’re going to do is divide the total of the number you’ve just gotten. So you’re 189,000, which is, the base number that you had per year. Plus your tax rate. You want to divide that by the number of clients you can take on each month.


So let’s say you. Take on 15 clients. Per, you can be working with 15 clients max capacity at one time. So then you, you’re going to want to break that down. Maybe you are working with your clients over three month period. So then you would take five new clients each month. So now what we’re going to do is calculate okay.


If I get five new clients each month, how much do I charge each client to make sure I’m hitting that 189,000? So for that, you would need to figure out one 89,000 divided by 12 to have the monthly income that you need to generate. So that’s $15,750. Then we need to figure out that divided by the number of clients that we’re making each month, which is five.


So we are doing $15,750 divided by five, which equals $3,150 per client. And that’s how much you charge this. Isn’t a random number. And obviously, this is going to change things like business expenses. If you have the business expenses that you have is going to lower your taxable income, these are the things that I’m saying.


You need to talk to your accountant about. See how we have figured out a solid price that takes into the whole vision of your business and not just a random number that you’ve pulled out of a hat. You can adjust these numbers depending on how many clients you can take on how many hours a week you can work.


But this is the gist of it. It’s very simple. It’s actually very simple and there is a transcript. In my, for every single podcast episode, there is a transcript. So if you want to actually look at the numbers, if visualizing, this is going to help you more head to my website, the, this will be up as a blog post, and you can see the transcript and I’ll include some notes in there as well for you.


So you can follow along. You can follow along on all of the steps that I’ve created now. How do you figure out and track how many hours a week you’re spending on certain tasks? You can write it all down if you want. Or there’s a really awesome website web app that I use for me personally. And I have the other people that work in my business, my VA, the, and the people that help me with, um, grading students’ tests and like the other people that I have hired.


They use it as well. And it’s an app called Toggl T O G G L it’s toggle time track. This is a really great tool to help you track all of the time that you’re spending on an, in your business. So you can calculate how many hours you’re spending on your business. And then, and you can even put in like an hourly rate and it’s going to do a lot of calculations for you.


So this is awesome. This is. To show you that your prices should not be a random number. You need to pay yourself. This. Isn’t just about you finding a cute number or looking at what everyone else is charging. You have a business, you are a business owner and you need to think strategically and sustainably and long-term.


And this isn’t about. Being able to post how much you make on Instagram or anything like that. This is like literal CEO thinking right here of you being strategic about your prices. And if you’re not a coach, if you have some other type of business, you still can use what I’ve just shared with you to figure out your prices as well.


Part of this is going to help you figure out what to charge in any situation. Like I said, if you need to listen to this over and over again, you can head to the website. There’s a transcript. And I’ll add in some extra notes, the notes that I have right here that I’m literally looking at right now, I will add these in as well.


So you can see and let me know what your thoughts are on this. This isn’t to confuse you. This is to help you start thinking long-term about your business. Once you, and you can do it with practice numbers. Just do this with practice numbers, go along with me. And with this episode, as I’m talking and a calculator, Write everything down and calculate it on your calculator.


So you can actually experience what the process is like. That’s going to make you feel more comfortable doing it. So don’t feel like if you’re confused right now, like, oh my gosh, I didn’t get too much math, too many numbers. Uh, just practice this. Isn’t like, no, one’s holding you to it. I was so bad at math in school, honestly, like.


Uh, that was my west subject. And I think that’s the subject that made me have, like long-term limiting beliefs about my abilities to be smart and really do anything because it was, it was bad, but this is super. So I’m going to leave it there. I’m going to stop rambling. Let me know what you thought of this episode.


Head over to my instagram@brookealexander.co. And if you want to learn more about business, about coaching, if you want to elevate your coaching skills, if you want to really. Do something that’s going to be able to help you to increase your prices so you can actually make more money. Then join the creative coach method.


You’re going to learn how to actually coach people. When you’re a better coach, then you can make more money because you have the legitimacy, you have the experience. You have the testimonials behind you to back up what you’re saying and how you’re supporting people. So you can head to create mind academy.com to join us in the critical method.


And for the final time, I’m going to stop rambling and I will catch you in our next episode.



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How to set your coaching prices