It’s the first question you should ask and answer when you decide to make your living as a coach, because charging what the competition charges doesn’t work for coaches. That pricing method for setting fees is for commodities. And your coaching isn’t a commodity. I hope.
Other Reasons Not to Use Commodity Pricing
We’ll use Life Coaching as an example. Let’s say you are a single mother, living in a large city like New York. There may be another married Life Coach who decided to become a life coach after she retired, plus she lives in a small town. The single mother in New York probably won’t be able to make enough to take care of her children, rent and other expenses if she tries to match the fees of the life coach who also has her retirement income.
For one of my paid Webinar Workshops, there were some coaches from large cities in the US and a lovely coach who lived in Jamaica where the cost of living is much less. You can see how coaches living in the US couldn’t match the lower fees of the coach from Jamaica.
Why Trial and Error Pricing Isn’t the Way to Go Either
Using the trial-and-error method means that sometimes you will base your fees on what you think your competition is charging, and sometimes you will be tempted to quote your rates based on what you think your potential client can afford or will be willing to pay. Sometimes you may even quote a low price just to get the business. And you may even feel that you don’t deserve to charge what you really need to make to pay your bills.
Think About What You Need for Your Take Home Salary
Many solo coaches who decide to be self-employed confuse income (or revenue) with take-home pay when deciding how much to charge. A rate of $100 or even $200 an hour sounds great… until you really think it through. After all, that’s a LOT more than you were making as an employee.
There are many differences between your take-home pay as an employee and the income you will need to generate as a self-employed professional. Ask yourself these questions:
- Were your taxes already deducted from your paycheck?
- Did your company pay for all or part of your medical insurance?
- Did you have some savings deducted from your paycheck?
- Were you paid for vacations, sick days, holidays, and personal days?
- Did your company pay for continuing education and training?
- Did your company supply things like a phone, computer, internet access, and office supplies, plus maintenance and upgrades?
These expenses, plus many others, are now your responsibility as a self-employed coach. You can see it’s important to take these into consideration as you set your fees. Don’t forget to look at what your company paid for when you were an employee. Now you are both the employer and the employee.
If you haven’t done it yet, get the free 5-day online course, “How to Be a Successful Self-Employed Coach.” If you’ve never taken a professional course that specifically taught you how to be self-employed, this course is for you. It’s the first step to a stress-free coaching career and a better life. For more information about this free 5-day course, click here. It doesn’t beat you over the head with “mindset” but it could fit into that category. It’s especially for coaches who are uncomfortable with the business of being a solo coach, which means being both the employer and the employee.
Getting the information you need to make good decisions about your coaching career is a necessity. It’s true if you’re a new coach or already have a 6 or 7 figure income, or if you are heart centered and just want to help others.
You will succeed if you are committed to learning what you need to know about how to become a successful self-employed coach.
If you want more information about better ways to set your coaching fees, please schedule your Free Business Skills for Coaches Discussion Session at http://www.setandgetyourcoachingfees.com/discovery-call.
Information for your success,
The Coaches’ Consultant