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This episode is the 5th in the series called Money Mastery.
The last episode called Are You Turning Away Coaching Clients with Your Pricing explained a more strategic approach to pricing than charging by the session or a package of sessions. I highly recommend that you listen to that.
In this episode, I’ll focus in on the mindset and simple mechanics of how to give yourself a raise, no matter what approach you’re using to charge right now.
Shift Your Money Mindset
If you’re a new coach chances are you’re not thrilled with your income yet. And there may be conflicting ideas in your head about taking money for coaching.
First there’s the idea “Well, I’m a new coach so I shouldn’t charge much.”
But totally at odds with that is the desire “I want to be financially successful at this.”
And then, there’s this other idea that can come with the helping professions “Money isn’t that important to me.”
It’s like mental whiplash.
So first … compassion. I feel ya, because as a new coach I was thinking those same things. One of the coaches in my Facebook group — Prosperous Coach Club —said it so clearly:
“As someone new to the field you desire to earn a good wage but setting fees is like the taboo topic. It is uncomfortable. You feel your skill set and knowledge is worth it but fear your lack of experience being newly in the field doesn’t warrant it.”
Exactly. Thank you for that Jenny.
Most new coaches charge fees that will keep them earning below the poverty level. The strange thing is that if you applied for a job you’d never say ‘yes’ to the rates you’re paying yourself!
You deserve to earn more. Period. And deciding to own your worth
is all you need to do.
Rather than thinking that you should charge as a newbie, own your life and work experience. Charge to sustain yourself.
Be a good boss and pay yourself well. Everyone wins. You, your family, your clients – everyone!
Let’s take a more pragmatic and dispassionate look at this.
Do the Math
Think from the get go like a business owner and do the math.
What I mean by doing the math is to actually figure out what you want to earn and then play with the number of clients and fees per client you’ll need to earn that much.
Now to demonstrate this I’m going to keep things simple. In the last episode I suggested there’s a much better way to price than by the session or a package of sessions. And I stand by that. But to make doing the math easier to understand I’m going to talk about pricing by the single session.
Let’s say you want to earn $100,000 annually and you’re charging $100 per one-hour session.
To earn $100K, you’ll need to have 1000 paid client hours each year.
Let’s take this a step further and divide 1000 paid client hours by 50 weeks. That’s assuming you’ll take 2 weeks off each year and work the other 50. 1000 divided by 50 = 20.
You’ll need 20 active clients paying $100 for their weekly session.
Does have 20 paying clients each week sound doable?
When I first started as a coach, I would have said ‘yes’. I had the illusion that enrolling coaching clients would be easy. Every one wants a coach, right?
But 20 years in I now know that it takes a lot of marketing and enrolling to have 20 clients. And serving 20 clients per week is a big client load!
The largest number of 1:1 clients I’ve worked with is 15 and I found that to be far too many clients for me. I’m more comfortable with 10 one-to-one clients at time.
Consider how much work it would be to find, enroll and maintain 20 active clients every week.
Sure, you might leap to the idea of doing group coaching or having an online membership program, and you could do that eventually.
The reality is filling those groups and building that membership program is a big endeavor fraught with challenges. It’s something that fits better later on once you have a leads list and know better what you’re doing.
As a new coach, to keep your overhead and labor low consider offering only 1:1 coaching for a while. Build up your leads list and your reputation. Later, you can try group programs.
I talk about this in my episode called The Simplest Coaching Business Model.
Now let’s give you a raise to make it easier to earn 6 figures.
Let’s say that you decide to increase your fees to $500 per session but still aim for $100,000 annually. You deserve that raise. Make your life easier.
At that rate you only need 200 paid client hours per year. Divide that by 50 weeks.
You need only 4 one-to-one paying clients each week.
Now, that’s more enjoyable and sustainable than 20 each week.
Decide To Raise Your Coaching Fees
But you might be thinking, well, Rhonda, how can I charge $500 for one session? Who would pay for that?
You’d be surprised. I’ve seen a lot of coaches charge much more than that.
But know this … they have put a lot of strategy behind their pricing. It starts with:
- targeting an audience full of seekers
- developing a smart niche and compelling messaging
- plus learning a solid enrollment process
These are all the things I teach new coaches how to do.
It’s not just about throwing up a website selling life coaching or some other type of coaching and enrolling people by the session.
This doing the math exercise was simply to illustrate how to think about paid client hours and how as you price higher you make earning well a more realistic scenario.
I suggest that you do not charge by the session at all. If you haven’t heard my last episode, go back and listen to understand this. It’s at prosperouscoach.com/56
In any case, you can’t begin to earn well until you charge more.
Decide to give yourself a raise.
Two years into full time coaching, I distinctly remember feeling so frustrated with my income. I couldn’t figure out how to break through the blocks I had about it.
And then I had a mental break through. How did I do that?
One day I simply decided to raise my fees. In fact, I challenged myself to raise my fees by 25% with each new client I enrolled.
And that’s what I challenge you to do now. With each new client you enroll, increase your fees by 25% or more. You’ll be amazed how you take a leap in the way you position yourself and own your value.
My preferred method for raising fees is simply to charge higher fees for new clients.
You can also raise fees across the board with existing clients by giving them notice. Tell them that as of a specific date your fees go up to a new amount.
Increasing Your Fees Helps Your Coaching Clients Too
Sometimes we don’t consider the effect that low fees have on our prospects and clients.
As I increased my fees, my client took bigger leaps.
They were more invested both financially and emotionally in the work so they showed up more fully, put more into their actions. And because of that, they were more ideal clients for me so I enjoyed the work more.
- As I increased my fees my confidence grew.
- As I increased my fees I was able to be more choosey about clients and opportunities.
- As I increased my fees I developed better marketing, enrolling and coaching skills.
- As I increased my fees I relaxed.
And relaxing had a profound effect on every aspect of my life, especially my ability to enroll clients. I had fewer ‘no thank you’s’.
My conclusion? If you really want to do the meaningful work possible with coaching and get paid well, charge higher fees
Now everyone has their glass ceiling. I’ve hit a new one over the years and had to work with my mindset to get through it.
There came a time for me where earning more was no longer my goal. Serving more people and living my life the way I want to are the reasons I charge the way I do.
Here is my recommendation for you:
- Don’t be about money, be about value and sustainability.
- But, do be a smart business owner.
- Set revenue goals.
- Do the math to plan how you’ll achieve those.
- Take smart actions.
- Keep making incremental improvements in your mindset and habits.
In the Next Episode: Start Planning for Profit In Your Coaching Business