Regardless of what stage you are at with your Coaching and Hypnotherapy practice, getting clear on your pricing and business model is a matter of great importance; I call this Pricing for Prosperity (this is a master class that you will not want to miss). In fact, I would go as far as to say if you are at the starting up the stage this is a must for you. Get this right in the beginning, and the road to prosperity and growth for you and your business will have a lot fewer bumps along the way than you may encounter if you don't. And that is speaking from years of experience!
Are you clear about the difference between your actual income and revenue and how much revenue you need to be making to sustain a viable business?
So many Hypnotherapists and Coaches completely underestimate the costs of running a business when it comes to setting and getting their fees right. Some don't even bother to take the time to work this out. Yes, they may have an idea of their expenses but haven't ever sat down and considered the true cost of running a business.
What's worse they are using a business model and pricing strategy that is more aligned with the traditional psychotherapy and counseling therapies and holistic therapies such as a massage therapist with the idea that any client that comes on board is likely to stay with us for 1 - 5 years. This model is certainly not sustainable in the field of Hypnotherapy and Coaching, or in any contemporary therapeutic intervention, given that the average length of time we work with clients is around 6 - 12 months sometimes less, which means that we need to be developing our business continuously. Keeping an eye to the future and thinking about how we are going to take our business to market to create an ongoing stream of clients.
And yes, clients do come back, but usually only for the odd session by way of top up or rework, but these tend to be few and far between. Because if we have done our work well, our clients will be moving on and living their life to the full with little or no need for further sessions from us.
You need to realise that undercharging hurts you and your business, and using the wrong business model for setting your fees is the first step to mental and financial burnout. Not only that when you as a Hypnotherapist or Coach set low prices, you are also devaluing the profession as a whole!
Most Hypnotherapists and Coaches believe that if they have ten clients a week paying £65 per session, generating an income of £650 per week or £2600 per month they are doing ok to begin wth, but they never for a minute take into consideration the true cost of those ten clients. When the reality of what those ten clients are generating in real income hit's home, that is when the challenges start.
Now you might be thinking well that sounds not too bad actually. The reality is this, though, most people struggle to get ten clients a week, and if they do, most of their income is going out to pay for running costs; such as rent, heat, electric, travel expense and marketing. And many other expenses they didn't consider at the start of their business. Leaving only a little income to live off, what's more, those ten clients are likely on average to have only 3 - 6 sessions with you, so what happens when the work is finished, and those ten clients move on? And what happens if you are not getting the magic number of 10 clients a week and are only getting the odd one here and there, and there is no money left in the pot to cover your running costs or to develop and grow the business.
No wonder many Coaches and Therapists run themselves and their practice into the ground, overworked, exhausted and drained. All because those Hypnotherapists and Coaches simply haven't taken the time to get the pricing strategy right or because they are fearful of charging a rate that is much higher than everyone else, yet one that is equivalent to the real cost of running a business.
Whether you are consciously aware of it or not, undercharging hurts you and your business!
If you are frustrated and feel as if you are not getting anywhere with your business, or even resent working with clients and feel you are worth more or deserve more than you are earning. Or maybe you have an unconscious "Closed for Business" sign up and are not getting clients at all due to the stress of running your business or the belief that you cannot charge more or earn more. Maybe you are just at the starting block and think by charging a lower fee you will get more potential clients. If this is you, then I would urge you to look at the costs of running your business and valuing what you do and setting your fees for prosperity and profit, not for loss and self-harm.
Learning how to calculate the actual cost of running your business and asking for those fees is what you and your business needs. And knowing the real value of what you do is essential if you want to have a thriving practice and to feel as if you too are thriving as a Hypnotherapist and Coach.
Many of the Business Coaching Clients who I worked with last year came to me to get help with identifying new income streams and what I found was that most of these clients were way undercharging for their services. Some highly experienced and qualified therapists and coaches were barely earning the minimum wage after they calculated the real costs of running their business, some of them hadn't even bothered to do this when they started up their business. And to be honest, there were a couple who would have been better off working in Tesco!
Every one of them had that one thing in common they were desperate to find other ways to generate more income for their business because they knew that for their business to be sustainable, they needed more revenue. But without that revenue, they were unable to develop new income streams.
You see if you want to grow your business the first place to start is with your pricing strategy, if you are not Pricing for Prosperity it becomes almost impossible to develop new income streams unless you have a pot of money to throw into business development or you have a very generous financial backer. And most of us don't have a deep pot of money or a financial backer.
After working for the last 12 months with a group of my Business Coaching clients focusing in on their mindset and pricing for prosperity everyone, and I mean every one of them, realised that the only way for them to develop new income streams was to raise their prices and review their whole business model. It was the only way for them to have both the time and money to develop these new sources of revenue. They didn't have a pot of money to dip into, or a wealthy financial backer, the only way for them to grow the business was to raise their fee's, and for some, this was a very challenging prospect.
That said just about every one of my Business Coaching Clients raised their fee's by 100% in 2016. And saw their client base drop by around 30 - 40%, most of my clients said that they were happy to let go off the customers that fell away; as those were the customers who were the most challenging and often caused a great deal of additional work that they did for free out of obligation. Often these were the clients who weren't committed to the work and wanted someone else to do it for them. Those customers who were still committed to "doing the work" were more than happy to pay the increased fees. And any new clients that came on board didn't know any different so happily accepted that this was what my clients were charging and saw what they had to offer as great value for money. Not only that, with a proper strategy in place, all of my clients are now able pick and choose who they want to work with, and no longer feel the need to take on lots of clients just to generate income.
Some of my business Coaching clients have taken a slower and more gradual approach to raising fees. However, every single client I worked with last year on pricing for prosperity saw an increase in revenue regardless of a drop in their client base. Everyone now has a much clearer understanding of what their business needs and are using a business model that is sustainable as well as profitable. All now feel more valued and less fatigued by their business and are now in a position to consider adding additional income streams to their business or invest in some much-needed help with things like marketing and branding.
Work it out for yourself, how much of a difference would it make to you if you were to increase your prices by say 25%, or even 50%?
How many fewer clients would you need to see to generate the same revenue you are generating now at this new rate?
How much time and energy would that free up?
What could you do with that extra time and energy? How could you invest this into your business to enable it to grow?
And if you think you can't charge any more than you currently are then I want you to know that you are undervaluing yourself and limiting both the growth of your business and yourself.
You are quite literally harming yourself and your business.
Charging low fees means you must see more clients to generate a reasonable income and you must spend more time working "In your business." All this means you have less time available to spend on your continuous personal development and business development. And we both know that in our business to be able to deliver high levels of service and add value to our clients we must continually update and develop our knowledge and skills base. How much you invest in yourself and your business can be directly correlated with how much your business grows. The more you invest, the more growth you will experience.
When your fees are low, and you have less time for your business and less time for you, resentment builds up, motivation evaporates and the buzz you had in the early days of running your business soon disappears. Because you simply don't have the time or money or energy to invest in what's important for the future of your business.
Charging a higher rate means that at a minimum you will have the same revenue coming in but with a lower amount of input required from you, freeing up all this time to do the things in your business that you want to do. To work "On your business" rather than "In your business."
In my first year as a Hypnotherapist, I was charging as little as £25 per session, all because I held beliefs that I couldn't charge much more because most people were at that time charging between £25 - £45 per session. I also believed that I couldn't charge as much as my mentor who was far more experienced than me and felt I could give nowhere near the value my mentor gave to their clients. That £25 per session was the equivalent of earning approximately £7.50 per hour, including pre and post meeting preparation and that was before I deducted the running costs of my business! It took me years to increase my fees to a level that allowed me to run a sustainable business and earn an income.
It doesn't need to be like that for you!
Once you know the true cost of running your business and the true value of what you offer you can set your fees feeling confident that what you charge is covering your business running costs and the value you give to your clients.
Here are a few questions to think about and reflect on when considering your Pricing for Prosperity Business Model:
What are the real costs of running my business? Do I know, down to the smallest details the exact amount it costs me to be in business?
What income goals do I have for the year ahead/how much do I want to have in my personal bank account at the end of the month or year?
What revenue goals have you set for your business?
Am I clear on what the difference is between my revenue and my income and how to calculate this?
Twelve months from now how much do I want to have sitting in my bank account?
What is my biggest fear about asking for more money?
Do I know how to calculate the minimum I must be charging?
Do I know how big my profit margin should be?
Am I clear about the value I add and how to calculate this into my overall pricing strategy?
If you can answer all of these positively, then you are well on your way to developing a Pricing for Prosperity plan, if not then you have some work to do.
Running a business takes fierce honesty, being clear on the reason you have decided to go into business and being completely conscious at all times of the costs of running your business. Nobody goes into business just for fun. The majority of us do so because we want to be in control of our income potential and our freedom as well as doing what we love. And one thing I know from experience is that running a business that is not making money or worse that is losing money no matter how much you love what you do is NOT fun even if you have a big pot of money or a wealthy financial backer! Those who bury their head in the sand when it comes to costs or who are fearful of facing realities such as raising fees or charging what they are worth will eventually burn out or not even get started in the first place.
My biggest piece of advice is this, set your price based on the answers to the above questions and ask for it, and stand firm in the conviction that you are worth what you charge. Start from wherever you are and remember it's never too late to start.
Continuously review and update your prices to reflect the changes in running costs and the cost of living as well as the investments you make in yourself and your business. Remember, most people don't bother doing this, those are the ones who find themselves with no business in a very short space of time or a business that isn't giving you an income and a business that is not generating you income is not a business it is an expensive hobby.
If you get this right or at the very least, begin working on these things you can be sure that in time your business will not only thrive, but it will prosper too. And every client you work with will reap the benefits because you will feel valued and more motivated to add value to your customers.
If you want help with any of the above, speak to me about Business Coaching or come along to my Pricing for Prosperity Business Master Class, which is excellent VALUE and I promise that you will leave with a whole new pricing for prosperity strategy ready to implement immediately into your business!
As one of my clients said to me "Avril, I couldn't afford NOT to work with you; I hit rock bottom, but today I implemented my new strategy and have booked in my first client at my new fees, which are now double what they were! Thank you for helping me save myself and my business!"
To your prosperity and beyond!
Love Avril x
This Pricing for Prosperity workshop is not a weekend of accounting and calculating tax. It is, however, a practical, in-depth look at identifying the true cost of running a Hypnotherapy & Coaching practice and developing a prosperity mindset and a Pricing for Prosperity system that will sustain your business both in the short term and for the longevity of a healthy and thriving practice.
Come prepared to do a lots of number crunching, lots of belief busting and be ready to put into place a prosperity mindset for both you and your business and leave with a business model and strategy that guarantees you will be Pricing for Prosperity the minute you implement it into your business.
Avril Gill, Hypnotherapist Transformational Coach & Hypnotherapy Trainer