Executive coaching and business coaching evolved from the corporate education and training world. The fee structure for coaching also has roots within this same world.
The traditional fee methodology for education and training is to determine a price per participant. This pricing model includes material, hours and any additional out of pocket expenses such as travel and lodging. For many coaches, this model is still being used and fails to address 2 critical issues:
- Return on investment
According to Webster, value means “to be worth. " How much are you worth from a fee perspective? A recent survey issued by Sherpa Coaching suggested that coaches with 5 years of experience or more earn $300 per hour. However, a colleague of mine saw his value or worth through a different filter which increased his hourly rate to around $800 an hour.
Return on investment (ROI) can be constructed using a variety of formulas. For me, the simplest way to achieve ROI is to project the desired results in dollars, subtract the coaching fees and then divide the remainder by the fees. For example, if the desired results are a $48,000 increase in revenue and the coaching fee is $8,000, then balance of $40,000, if achieved, is a 5 to 1 return on investment.
When business coaches or executives coaches think in a per participant pricing mentality because of past conditioning, then they have decreased both their own value and motivation to secure a positive return on investment. And with a 40% growth rate within an annual $1 billion industry, maybe it is time to rethink your fees to truly become one of 10 coaches who earn more than $100,000 annually.
Leanne Hoagland-Smith, M. S. is a business coach who specializes in strategic planning with offices in Indianapolis and Chicago. She writes, speaks and coaches people in businesses to quickly double or triple results through the creation of an executable strategic plan.
One quick question, if you could secure one new client or breakthrough that one roadblock holding you back from success, what would that mean to you? Then, take a risk Leanne, a call at 219.759.5601 to experience incredible results.
Visit http://www.processspecialist.com/ and explore everything from free articles to connecting with Leanne.