Breaking Down Your Rates and Knowing What to Charge
When you’re first starting out in business, a common question many entrepreneurs ask themselves is “How much should I charge?” To answer the question of what to charge, we thought we would offer a quick guide that teaches you how to break down your rates.
First, take a look at your competitors.
How much are they charging for the service you offer or the product you sell? Let’s say they charge $50 per hour for one-on-one coaching of some kind and you want to offer the same type of coaching. If your competitors are successfully charging that number and getting clients then odds are you can too. Some of your competitors may be charging more and some may be charging less, but what is the average fee that they are achieving? Of course, there is no way for you to know if these rates are just their displayed rates or the number of clients they are actually serving, but by looking at the average rates coaches are charging for the same service you are offering you can get an idea of the “industry standard.”
Second, take a look at what clients are receiving in exchange for that fee.
For example, let’s take a look at the coach again. If the coach is offering one-on-one chats, brainstorming and just overall advice for $50/hr that is one thing. However, if you could offer all of that and free eBooks along with worksheets and templates for the client you could charge more per hour. Maybe you have also created a private Facebook group for your clients to interact with each other and share challenges or perhaps you have also created private videos they can watch for additional inspiration. Every time you add value to the service you are providing you stand to make additional income.
Finally, determine how much you need to make?
Suppose your income goal is $60,000 per year. At that $50 per hour rate you will need to work 1,200 coached hours if coaching is your only source of income. That number broken down further is 100 coached hours per month or 25 hours per week.
We hope this quick guide helps you to determine the perfect rates for you in your business. However, keep in mind this is just one way to set your rates and if you feel the rates we suggest are too low or too high then you should go with your gut and adjust accordingly.
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