I talk about money a lot- so let's have that worth conversation
How much are you worth? In dollars and cents?
While you think about it, I’m going to tell you a little story.
Back when I was first starting out and most of my coaching was eating disorder recovery work, a woman I knew from around town inquired about my services for her relative (daughter? niece?) who was struggling with both an eating disorder and a cocaine addiction. I know a lot about ED healing and was open to a conversation with her relative so I told this woman my rate: $250/month for 4 sessions.
Her response was amazing.
“How dare you charge someone in such dire straits so much money? Who do you think you are? What gives you the right? How could she possibly afford that?”
And on and on.
This woman herself had enough money to shop at a local organic foods store, attend yoga classes and was indignant that I might charge her 20-something relative $62.50 per hour to help her change her life.
I wonder what she would say about my charging $8,000-$15,000 for a day of consulting? Or $25,000 for coaching?
In any case, it doesn’t matter what she thinks about my pricing. What matters is what I think about my pricing because I’m the one who has to deliver services that are in line with it, my expertise, my worth.
So, back to our starter question: what are you worth?
(For the record everyone is irreplaceable and therefore infinity value, but just play along here with me :))
If you had to put a price on your head. Say you were being held hostage. How much would a savvy hostage-taker ask for you? If that question stumps you and/or makes you uncomfortable, then this post is for you my friend.
Because every day that you're in business, you absolutely have to tell people what your expertise is worth. With a NUMBER.
Sound scary? A question you'd really rather not answer?
You will have to get over that, love, because you and your worth are intrinsically tied together and a price tag is a part of that. While your number doesn't define you, it is important to own it- whatever it is.
I want you to do something for me. Take out a sheet of paper right now.
Write down your worth. With a dollar sign and commas and zeroes.
Now divide that number by 365. You might need a calculator for that.
Now divide that number by 8.
What did you get?
Here's what my number looked like the first time I did this exercise.
I wrote down $10,000,000.00 Ten MILLION dollars! Yes, I also did the Dr. Evil pinky to mouth thing as I wrote this. And said it out loud.
Ok, 10 mil divided by 365 is 27,397.26.
Then 27,397.26 divided by 8 is 3424.66
Then I pop a dollar sign in front of it and I get $3424.66.
Ostensibly this is my hourly rate if I assume an annual worth of $10 million. Pretty simple right?
That doesn't necessarily mean that I CHARGE that much per hour of my time right now. But what it does do for me is start to give me some context.
For instance, if I say that I want to make $10 million in a year, now I know how many hours of how many days I'd need to work doing dollars-for-hours stuff in order to hit that goal.
If nothing else, this example really hits home the benefits of leverage because I know that I do not want to work eight hours a day every day of the year even if I am making $3k an hour.
More importantly, this exercise is about opening up to the idea of what is possible.
Let's do it another way.
Imagine you just want to hit the $100,000 mark.
Now decide how many days per week you want to work. My ideal would be three. But for this example's sake, let's say it's four days per week with four weeks of vacation per year. That means four days times 48 weeks.
So you'll work a total of 192 days. Assuming you work for six hours each day, then you need to be charging at least $86 dollars per hour.
Sound like too little?
You know that you'll spend a ton of time doing things other than coaching or providing your service/product. That means you'll want to account for roughly half your time as "unpaid" or non-billable time.
Let's do that calculation again. That would mean you'd do billable work for about three hours each day of those 192 days.
That means your billable hourly rate will be $173.60 and you'll make your $100,000/year goal if you coach/consult for three hours of each working day, not including vacations.
And to get to $200k? Just double that hourly rate.
I find this a really useful exercise to figure out how much work I'll need to be doing and at what kinds of rates in order to achieve the financial goals I have.
Fortunately, too, as coaches and consultants we have so many opportunities for leverage via group coaching, higher paying contracts (corporate is great for these), speaking, and info products.
Hopefully our little math lesson helps you see what is possible for you and where perhaps your thinking about your pricing may have been off and/or why you haven’t been hitting your revenue goals.
One big caveat. It takes TIME to get to a full practice. You might not hit it in the first three months, six months or even year, depending of course on your market and on your sales skills.
Still, you have to start somewhere. And knowing where you want to go is a huge part of your beginning steps.
Now, a short note about the fundamentals of worth and pricing:
There’s often no difference between a program or service that is $200 and one that’s $2000. Price is simply a function of the business owner’s comfort level with charging high prices (and delivering the product/service for that price).
A few years ago my friend asked people to comment on a facebook post with the highest dollar piece of business they landed in the previous six months. People were commenting with work ranging from a couple hundred to millions. And these were random kinds of consultants and coaches: marketing strategy, social media, PR, etc. Nothing groundbreaking.
Right then and there I realized that someone is ALWAYS going to command high prices and find clients who will pay it. And someone will ALWAYS charge very little (and find clients who will pay that).
I decided on that day, thanks to the comments on that post that I do not want to be a commodity in my business.
I do not desire to compete on price. I am confident in my ability to deliver incredible value. And I will price my services accordingly.
I am WORTH that. My services are WORTH that.
So, where are you undervaluing yourself and your services? What do you resolve to do about it?
I love you!
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