How to price your coaching packages in order to achieve your financial goals

Want to know how to price your coaching packages in order to achieve your financial goals? It’s very common for coaches to be told to move from charging by the hour to offering a package. However, once you’ve created your coaching package you’ll need to set a price and that can be difficult. Keep on reading to find out how to price your coaching packages in order to achieve your financial goals. 

 

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Why the marketing / business / pricing experts tell you to set packages rates instead of charging by the hour?

 

If you are any type of coach then you don’t have to look far online to find some type of “expert” telling you to stop charging by the hour and set a rate for your package instead.  

 

Now that advice comes from a good place. Charging by the hour makes you seem like a commodity and potential clients are more likely to judge your prices directly with other coaches. So there are good reasons to not charge by the hour, but the fact that it is easier to realise if your pricing is wrong when you are charging by the hour than it is when you are pricing packages. The maths for when you are charging by the hour is fairly simple.  

 

Say you are a financial coach and you are charge £40 per hour. You have 20 hours per week in order to work with clients. That means you have the potential of earning £800 per week if you are fully booked. If you have got a financial target of £5,000 you’ll be able to work out that at £40 per hour that just isn’t possible.  

 

Financial breakdown

£40 per hour x 20 hours per week = £800 per week
4 weeks per month = £3,200
Difference of -£1,800 

 

Now before you get all smart with me and say there is more than 4 weeks in a month, I was allowing for 4 weeks of holiday because it is vital as a business owner you take time off. However, even if you took no time off, you’d be looking at  

 

Financial breakdown

£40 per hour x 20 hours per week = £800 per week
4.33 weeks per month = £3,464
Difference of -£1,536 

 

 

When you are pricing hourly it is fairly simple to work that out, but when you set a package rate it gets more complicated.  

 

That’s why I want to go through how to prices your coaching packages properly.  

HOW TO PRICE YOUR COACHING PACKAGE IN ORDER TO ACHIEVE YOUR FINANCIAL GOALS

 

Step 1: Set a price for your coaching package

 

Does it seem weird that the first step to pricing your coaching packages is to just set the price? Well, the fact is when I work with clients I always find it easiest to start with a price in mind and then do all of the checks against that price.  

 

If you are deciding to go down the package route, then you’ll need to follow a value-based pricing strategy (Find out more about the other pricing strategies you can use here.) A value-based pricing strategy is where you think about the value you are providing the client and then set a price accordingly. Now this pricing strategy means your options are wide. Different people place a different monetary value on the same things. So at this stage, it is best for you to choose a price that feels right for your package. Choose a price that you would be happy to charge as a business owner and be excited if a sale came through, but also feels as if at that price you’ll be providing good value for money to your client.  

 

Got a price in mind? Now you can continue. 

 

Step 2: Know the minimum hourly rate you need to earn in order to achieve your financial goals 

 

Just because you aren’t charging by the hour, doesn’t mean you shouldn’t know what you need to be earning by the hour.  

 

In order to do this, you’ll need to know your financial target (can be monthly target or annual target) and then the amount of hours you have for client work per week or month. It is very important that you calculate this figure based on the number of hours you have available to work with clients. All too often business owners will calculate their minimum hourly rate based on how many hours they want to work. For example, if you’ve decided you’ll work 9-5 three days a week that gives you 8 hours per day or 24 hours per week. However, in order to run a successful business, the likelihood is that you can’t work with clients on all of those hours. Now you might have a team that supports you and so you only do client work but for most business owners the reality is they’ll need to do some of the following: marketing, sales, customer service, client liaison, finance and admin.  

 

With that in mind, you need to be realistic about how many hours you can commit to client work and how many hours you need to leave free to deal with other aspects of running a business.  

 

 

Once you know how many hours you have the formula is  

 

Financial target (monthly) / number of hours you can work with clients (monthly) = minimum hourly rate. 

 

Now you aren’t going to publish your minimum hourly rate and you aren’t going to be charging that. However, you’ll be using your minimum hourly rate to review against your package rates to ensure you have priced them in order to meet or exceed that rate. 

 

Step 3: Work out how many hours you REALLY spend delivering a coaching package  

 

The next thing you need to do is calculate how many hours you are really spending delivering a package and the emphasis is on really. All too often business owners drastically underestimate the amount of time they spend delivering a package. This is especially true if you offer a service that has unlimited support in-between. In those situations, the reality is each client is different and the amount of time you spend delivering the package varies.  

 

In that case you should base your figure on the 2/3rd mark. So if the quickest you’ve delivered a package is in 10 hours and the longest it has taken you is 30 hours then you should guess it will take you 22.33 hours (you can round it up for 23). This means that on the whole most clients will require less time and for the few that go over it will average out with those that are under.  

 

Once you’ve worked out how long you really spend delivering a package you can work out your hourly rate for the package.  

 

Price for the package / Number of hours spent delivering the package = hourly rate for the package 

 

 

ARE YOU STRUGGLING TO PRICE YOUR SERVICES?

Have you set prices that you aren’t 100% confident with?

If so, a Pricing Power Hour is for you.

 

We’ll work together to ensure that your prices are set in a way that you achieve your financial goals, business growth aspirations and allow you to work without getting burnt out.

 

To book a Pricing Power Hour or to find out more information click here.

 

Step 4: Compare your minimum hourly rate and package hourly rate 

 

At this point you’ll be armed with two hourly rates: your minimum hourly rate in order to reach your financial target and the minimum hourly rate for your package. You’ll now need to compare them.  

 

If your package hourly rate is below your minimum hourly rate you have a problem. If you carry on you could become fully booked but not hit your financial targets. This means you need to relook at your pricing and the package. 

 

If your package hourly rate is the same or above your minimum hourly rate then you are in a good place. Your pricing means if you became sold out you could achieve your financial goals.  

 

Step 5: Are there any other costs you need to factor in? 

 

The above steps are a super simple way of ensuring that you are pricing your coaching packages in order to ensure you are reaching the revenue goals of the business. However, to go a step further you should also be looking to ensure that the package is at least covering all of the associated costs. Now most coaching businesses don’t have massive overheads, especially if you are running your business online. However, there will still be fixed costs of running your coaching business. Costs such as technology subscriptions, insurance, accounting etc.  

 

Say your fixed costs for the year are £2,000 and you can sell a maximum of 50 packages across the year. You should allocate a minimum of £40 as a cost to every package. This would mean if you were fully booked for the year you would cover all of your fixed costs.  

 

 

Step 6: Check that your price point is something clients are willing to pay 

 

By now you’ve got to a price point that works for your business, but the question is does it work for your client. Unfortunately, pricing isn’t as simple as just setting a price that works for your business. You have to make sure that there are people willing to pay that much for your coaching package. In order to check if people are willing to pay that price you have a few options: 

 

1. You can do market research (calls or questionnaires) and ask
2. You can advertise your package and the price point and see if anyone buys 

 

 

Step 7: Ensure your coaching package work alongside your other services/products (if you have any) 

 

If you are only offering one coaching package in your business, you can skip this step. However, if you have multiple offerings then it isn’t enough to be confident with just the pricing of your package. You need to ensure it works alongside everything else. In most situations ,you want to ensure that the services work alongside each other and they make sense.  

 

If we go back to our financial coach. They might be offering a power hour session at £100 and then having a 12-week coaching package (with 12 hourly calls) for £1,000. Then they might have an annual programme (with 50 sessions) that is £3,000. As a potential client those numbers make logical sense. The more I commit to the less I’m paying per hour.  

 

However, what if the prices were £500 for the power hour, £1,000 for the 12-week package and £10,000 for the annual programme. All of a sudden it seems like the 12-week package is a bargain.  

 

Now that last example is extreme, but I hope it proves a point. If you have more than one product or service, then you need to ensure that you aren’t pricing your coaching package in isolation. Once you’ve reached a price you are happy at it, look at in relation to your other offerings and see if it makes sense from an outside perspective.  

 

There you have it! You now know how to price your coaching in order to achieve your financial goals.

 

Moving from an hourly rate to a coaching package can be a very sensible move for your business, but it is important that you don’t pick a number out of thin air and then just hope for the best. Even if you’ve picked a number following the steps I have outlined above you’ll know confidently that you’ve priced your coaching package in a way that you can achieve your financial goals and that you are ensuring the financial future of your business.  

 

 

In the comments I’d love to hear what your biggest takeaway has been. 

 

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NEED HELP PRICING YOUR COACHING PACKAGES?

 

Pricing your own services is difficult, even if you are good with numbers. That’s why I run Pricing Power Hours. I’ll work by side, and do all the calculations, to ensure that your services are priced to attract your ideal client, to help you grow a successful business and ultimately ensure you make a profit and can pay yourself properly.

 

If you want to stop wasting time wondering if your pricing is right and confidently set, or revise, your pricing then book a Pricing Power Hour by clicking here.

Don’t think a Pricing Power Hour is right for you and want to work together in a different way? Drop me a message here to discuss other options.

 

 

You might also be interested in reading:

How to raise your prices as a coach or consultant 

Should you put prices on your website?