This episode is about thinking through how you’ll earn as a coach based on how many clients you can feasibly serve at a time. It requires a bit of math and strategic thinking. And, it will be eye opening!
Are You Charging for Coaching by the Session?
Most often, when I meet new coaches in a Discovery Call or Strategy Session where I help them with a bite-sized topic such as determining their audience and niche — if they have paying clients at all, they are charging by the session.
Speaking in terms of US dollars, they’ve set their prices anywhere from $25 to $150 per session. Some may be packaging sessions of say … 3 sessions for $450.
At the top of that range, coaches tell me they feel uncomfortable. $150 per hour sounds exorbitant! I mean aren’t those getting close to lawyer rates? Would anyone or should anyone pay more than that for coaching?
So I get it. These are the same concerns I had as a new coach. Part of the issue here is perspective. The standard behind that approach is pricing in dollars per hour. That way of thinking will not help you earn well as a coach.
I’ve switched up my perspective on pricing and invite you to do the same. First, what’s making you think about pricing with that old standard?
Well to start you may be used to earning an hourly wage or salary. You might also be used to receiving benefits like health insurance, paid vacation and sick days as part of your employment package. Once those things are deducted from your pay and you divide the amount of your net paycheck by the hours you work, being paid $25 to $50 per hour seems decent, right?
A small percentage of employees in the world earn $150 per hour or more so it seems crazy to believe you can as a coach, right?
Why Charging By the Session Keeps Coaches Struggling Financially
But wait … the key word is ‘employee’. When you’re working for yourself, you pay for your own health insurance. There are no paid vacations and sick days. At least not in the way you’re used to thinking.
And, you may not realize that you also will invest money regularly into your own business infrastructure beyond the initial costs of coach training. Add to that the hours and expenses of marketing. You’re paying your own social security (an amount deducted from US paycheck).
As part of my VIP program I help coaches create that infrastructure and set up systems. It involves paying for a few accounts. Those yearly or monthly fees add up. Health insurance and business expenses need to be taken into consideration when pricing your program.
After all you need to earn well as a coach. You may have a full time job now that you want to transition out of soon. Or you may have been laid off or quit which lead you to building your coaching business. In any case, it’s important that you think differently about your time, your expenses and earnings.
Group Coaching Requires More Time & Expenses
When I started my coaching business I imagined I would work with a lot of people every year. I also thought that everyone wants to hire a coach. I figured it was just a matter of a great looking website and maybe a little public speaking and I’d soon have a flow of eager clients. Can you relate?
I thought I could have … 100 clients each year at $50 per session, each wanting at least 20 sessions and so I’d earn an annual income of $100,000 with ease. It would be easy to scale, right? And I didn’t think much past that.
That’s a bit embarrassing. You may be much more savvy than I. But specifically what I didn’t know is that I couldn’t serve 100 clients each year … not with 1:1 coaching.
Now, you may think I’m about to reveal that group coaching is the solution … but I’m not. It certainly could be for you. But after several years of trying group coaching I found that business model takes significantly more labor hours, technology, higher expenses and more energy to serve 12 – 30 people or more in one sitting.
In reality, enrolling people into group programs is arguably more difficult that enrolling 1:1 clients. And nothing is worse than not filling a group and having to give back money to the few who did enroll.
There are people who have big leads lists who do group work, sell online training and product who earn really well. I just want you to know it’s not as simple as the sellers of those systems make it sound. You hear someone had a $50,000 month with their group program. But what you’re not hearing is how much time, energy, money and technical support it took to reach that. The investment is significant so it offsets the revenue.
Now don’t despair. I’m not implying it’s not worth it to be a coach and start your own business offering 1:11 coaching or group coaching. The best years of my work life have been the last 25. I love being an entrepreneur and you couldn’t pay me big bucks to work for someone else’s company slaving under high pressure for their ideas.
The Simplest Coaching Business Model
I love my lifestyle. I love working from home. I love being the creative force behind my business. And I love the work I do with my clients. My income is satisfying and affords me all the things I want.
If you’ve been digging into the gold of earliest episodes you know that what I advocate for coaches — after much trial and error and version of my own business — is that you create a long term PRIVATE Signature Program that’s high priced. It’s what I call The Simplest Coaching Business Model.
Instead of trying to serve 100 clients at $50 or even $150/hour, switch it up completely.
Stop thinking in terms of dollars per hour or session. Start thinking in terms of what your unique audience wants and what’s in the way of that. Then put together a 4, 5 or 6-month program that addresses those things. Because it’s tailor made for that audience you can price differently.
How many clients can you serve well at one time? That’s a personal answer that takes a bit of trial and error to know. For me, it’s no more than 10 at a time.
Since my VIP program is 5 months long, that means I’m serving 20 coaches per year in my VIP program. And I also have single Strategy Sessions – that’s for another episode.
So, my friends, do the math but think outside the box without getting hung up on dollars per hour or session. Want private help to figure this out? If you have already targeted one narrow viable audience and know your niche, let’s have a Strategy Session to create your program and pricing. If not, let’s use that Strategy Session to nail down your coaching niche!