Determining Your Rates
Introduction
Determining your coaching rates can be one of the most challenging aspects of starting your coaching business. You want to make sure you charge enough to be profitable and to place value on your time. However, you may feel like you don’t want to charge so much that potential clients cannot afford you.
Industry Standards
The industry standard various based on the type of coach you are. For example, Executive Coaches who generally work with organization usually charge more than personal coaches.
Let’s take a step by step approach to help you determine the right rae range for your business and your prospective clients.
Once you have studied the information, you will be able to use your hourly rate to create:
• Your hourly coaching rate
• Your package rates
• Your monthly coaching policies/retainer
• Potential coaching discounts and promotions
Keep this information handy and refer to it occasionally. You can increase your rates as your business grows and you gain expertise and credibility in your coaching niche.
REMEMBER THIS…
Negative and Limiting Beliefs
As Christians it is common for us to have negative or limiting beliefs about money. These beliefs will subconsciously cause you to sabotage yourself and your success as a business owner. Remember, if you have decided that your practice will be your livelihood, making a profit is your ultimate goal. You have decided not to treat your business like a hobby. Those who treat their business like a hobby are called Hobbyists.
One of the most popular misbeliefs is that “Money is the root of all evil.” The truth of the matter is the scripture 1 Timothy 6:10 actually says, “The LOVE of money is the root of all evil.” When the word “LOVE” is mentioned, it consists of the heart. It becomes a heart matter.
Major Vision Blocker
How do we solve this vision blocker? Yes, it is definitely a vision blocker. First, we must examine ourselves. We must take a close look at our beliefs about money and asking people to pay for services. In your business you are a laborer working in your land. I am reminded of 1 Timothy 5:18 that says, “…the laborer deserves his wages.” Over the years, I have learned that we allow our “self” to talk to us rather than talking to our “self.” Your “self” is made up of many voices and experiences that have planted seeds in your soul (mind, will and emotions). These voices comes from the people we love and adore, our culture, religious beliefs, situations, circumstances, etc.
I refer to these voices as external influencers. Let’s remember 2 Corinthians 13:5 that tells us to examine OURSELVES. Once we examine ourselves, we need to uproot any lies or misbeliefs and replace with the truth. If you work in your vision (field), you should get paid.
Second, we must understand what value means. Value means the regard in which something is held. It means the importance, worth or usefulness of something. It also means to be considered important or beneficial. Any experience, skill or talent that is beneficial, important and useful creates value. If your services or products help someone, then there is value in it. If your services or products solve a problem, then there is value in it. People pay for things that bring value to their lives or their efforts. I am reminded of King Solomon in 1 Kings 5:6 when he was preparing to build God’s Temple and he had a conversation with King Hiram.
King Solomon speaking…
“So give orders that cedars of Lebanon be cut for me. My men will work with yours, and I will pay you for your men whatever wages you set. You know that we have no one so skilled in felling timber as the Sidonians.”
He saw value in hiring the Sidonians to cut down cedars because he knew that they were good at what they did. He valued the Sidonian’s skill. He did not care about the price because he knew that they were the best and that the efforts to build God’s Temple were important. He knew that God’s Temple deserved the best. King Solomon didn’t care about the price. King Hiram and, I am guessing, the Sidonians knew their value too based on my research of them and how people called on them often to do things for them. They were highly regarded.
What am I saying, when you are good at what you do and people see the true value in your skills and what you offer, they will pay what you ask. Yes, you’ll get those individuals who can’t afford your services. You’ll even get those who don’t believe in paying for anything. That’s not really your business. For those who can’t afford your services, the solution would be creating something that is at a lower price point, like a 30 to 60 minute mp3 audio that solves their problem and charge less. But when it’s your personal time, you charge more. That’s another lesson.
Thirdly, you must know…be convinced…without a shadow of doubt that there is value in what you have to offer. Your knowledge, skills and abilities create value. Your years of experience creates value. If you can use your knowledge, skills and abilities to solve problems for people, there is value in it. You must change your mindset about money. You must change your mindset about the value of your KSAs.
On More Thing
Because you work your business you set the prices. Don’t allow your clients to set the price for you. I am reminded of Romans 4;4 that says, “Now to the one who works, his wages are not counted as a gift but as his due.” This is your business, you drive it and not your customers.
In Summary:
It can be a challenge determining an appropriate rate for our services or products because of the many voices that motivate “self” to undervalue what we have that could help them solve a problem. We cannot allow the external voices to overshadow us with doubt, guilt and uncertainty of the true value of our skills, knowledge and abilities bring to others. We can no longer devalue ourselves. Devaluing our services and products shows up in what we say, how we say, how we carry ourselves AND our esteem.
KEEP THESE THINGS IN MIND ALSO…
• If you price too low, people may devalue your services or products.
• Potential clients may not take your offer seriously or take a second look at it because the low price can give the impression low quality.
• When delivering Walmart services, you cannot expect your clients to pay Saks prices. Make sure you deliver quality products and services.
• Just because you have low prices, does not mean your sales will be higher.
• Undervaluing what you have to offer your flock (target market) will impact your self-esteem later.
• You will need to de-program your mind from poverty thinking and program your mind for real value.
• Avoid allowing your clients to dine on steak but pay for hamburger.
• We can underprice ourselves by underestimating the value of our products and we can overprice ourselves my overestimating our market’s willingness to spend.
• When you are pricing focus on the value of the benefits your services or products will provide to your flock (target audience) and the results they get through working with you.
• Base your prices on the output instead of the input.
• Having the lowest (or lower) prices typically brings in clients that don’t value your experience and expertise.
• Those who pay more tend to be more committed to their success and seeing a return on their investment at a quick pace.
What Can You Do with Those Who Can’t Afford You?
If you are concerned about people not being able to afford your services, the solution would be to have several price points on your Sales Funnel. We’ll talk about this later.
Now let’s take a look at the Determining Your Rates Worksheet…
Determining your coaching rates can be one of the most challenging aspects of starting your coaching business. You want to make sure you charge enough to be profitable and to place value on your time. However, you may feel like you don’t want to charge so much that potential clients cannot afford you.
Let’s take a step by step approach to help you determine the right rate range for your business and your prospective clients.
Once you have study the information, you will be able use your hourly rate to create:
• Your hourly coaching rate
• Your package rates
• Your monthly coaching policies/retainer
• Potential coaching discounts and promotions
Keep this information handy and refer to it occasionally. You can increase your rates as your business grows and you gain expertise and credibility in your coaching niche.
