I was recently working with one of my private clients to revamp her pricing strategy. She had been charging by the hour, and was feeling burnt out and frustrated because she wasn’t making the money she wanted, even though her client schedule was full and her time booked several months in advance.
As we talked, I realized this is an area that everyone could benefit from learning more about.
So let’s go though some basic principles on how to price your services.
First – figure out how much you want to make in a year and how much time you want to spend delivering those services. For example, let’s say you want to make $100,000 and you want to spend no more than 2 hours a day with clients in order to have time for content creation, running your business and time off.
Second – then back into how many clients you would need. For this example, you could support 10 private clients a month (1 hour every other week) and a group program (1 hour every other week), plus time for content creation.
Third – then back into how much content you have to deliver to create enough value to support your price point.
If you start by just charging a flat fee for your time, you haven’t considered the value of the transformation you are offering. You don’t give yourself the opportunity to pack in more value per hour! And you don’t give yourself the opportunity to spiral up your revenues over time by growing the value of your programs as you learn more and add more value.
When you price by the hour, you end up in a lowest price war with competitors, and you can’t communicate and sell the value of the transformation your clients can receive by working with you.
So if you are pricing your services by the hour now, it’s time to step back, dive deep into your Power Chakra, get crystal clear on what kind of lifestyle your business needs to provide for you, and re-tool your packages and pricing to support the value of the transformation you can provide for your clients.
Your business only works if it’s both a win for you… and a win for your clients!
Photo Credit: Tax Credit