Let's Chat About the 💸 🐘 In The Room
Coincidentally, I have had a post sitting in my Canva account ready to go for weeks and ended up posting it last night on Instagram and Facebook regarding pricing and economies of scale.
You know, the conversation we're not supposed to have, but we need to (among many others).
I grew up with one parent who never really worried about money and one with a scarcity mindset, so my brain is funny regarding this topic.
(BTW, I know what I choose to do for a living is a luxury for most people, and by next summer, I will also have a shorter commitment offer for 1:1 that is alignment-focused).
Some people think becoming a coach is the ticket to big $ and I can tell you, it's not. To be fully transparent, I have not yet made back my 2017 corporate career salary (2020-2021 didn't help, and neither did my lack of confidence for a while).
It annoys me that anyone hanging a shingle can call themselves a "coach" because it's not regulated.
It also annoys me that some people charge a ridiculous amount of money (like more than a college semester at a small state school) for a group program. They repeat what worked for them, completely bypassing the individual lived experience of the participants.
In 2020, I finally had someone drop into my IG feed with the most concrete example of how to do finances as a business owner utilizing the ProfitFirst model. Unfortunately, I didn't start applying it until later in 2022 after running myself into debt because I took one too many sales pitches of "if you invest, it will come back tenfold." 😝
After I got out of debt, I vowed never to return there, and this year has been much more settling.
Here is my social media post with a little more context around it:
Let's say someone signs up for my 1:1 at the $297/month package (1 contact hour a month + coaching support in between).
I don't pocket the entire $297.
$297 broken down for me:
$45=taxes (15%)
$89=expenses (30%)
$15=profit account (savings) (5%)
$149=my pay ideally (50%)
Maybe that still sounds like a lot because your brain goes, "Well, if you work 40 hours, that's a decent amount."
$149 x 40 = $5,960/month
But, I don't work 40 hours a week with clients because I am also:
-Marketing
-Operations
-Admin
-Bookkeeping
-Furthering my education (I have spent nearly $25k in 7 years).
I'm not technically paid for my time on this stuff.
My expenses:
Every month:
Client App for workouts and where I process payments and track financials
Acuity for scheduling
Email/Newsletter/Database/Onboarding Provider (you're looking at it)
Rent for seeing clients in person and gas to get there
Canva for graphic design/marketing
Yearly:
Website & Liability Insurance
ACE Membership, Zoom, other memberships, education, etc.
Over the last year, these have ranged from $300-900/month or more when I had an assistant.
*Remember, many business owners have employees/contractors to pay and a brick-and-mortar with monthly overhead, etc.
In addition, we pay for industry conferences, events, and CEs to keep ourselves current.
What do you mean you don't work 40 hours a week with clients?
Most 1:1 independent movement/manual/therapeutic practitioners (who don't want to adhere to the medical model of crunching a zillion people in and getting burned out) will tell you that 4-6 folks per day are about the max for us.
The energy one exerts in an hour-long 1:1 session is attuned to the energy someone exerts when giving a presentation.
Everyone's capacity is different. This can be tougher for introverts, folks with a mental health diagnosis, etc.
Not to mention, it's not just the time we're in contact with clients...
Since I am doing weekly email check-ins with clients, this includes gathering information, replying, recapping our sessions, adjusting the program, filming new movements, and gathering info. On other topics, etc.
This is wrapped up in the monthly cost I charge for 1:1 coaching.
Sometimes, I also do co-care with other wellness folks for the client and communicate with them via email, text, or phone.
(Clearly) Life is getting more expensive:
What are homes selling for in your neighborhood?
What are you spending on gas and groceries weekly?
What are your medical expenses?
Are you able to save for retirement?
Are you able to get away occasionally?
Okay, Laura, so what does this all mean?
Small businesses don't have economies of scale or cost advantages reaped by companies when production becomes efficient.
Larger companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over many goods or people.
This is why a fitness influencer with 1M followers can sell $40 programs and make a living (or make it look like they do).
Your average small business service provider will likely not offer a deep discount or discount on their services.
Put-we can't afford to do that to make a living wage, and we can't scale like corporations.
I read a book this year about America's history with exercise. It mentioned that a personal trainer in Eastern Iowa was making $50/hour...
In the 90s. 😳
I hope you're not making what someone in your job made 30+ years ago. That would be 🍌.
I still don't know how Planet Fitness charges $10/month for a membership and pays their trainers. I am willing to bet they work multiple jobs.
On the flip side, here is what I offer for folks who do not have the means to hire someone like me:
Sliding scale (I love this example)
Payment plans without penalty
Scholarship
Some employers offer a wellness stipend
Donation based yoga
Pay-what-you-can workshops
And being able to give back (for example, to those with marginalized identities, from oppressed communities, etc.) requires a solid amount of folks to pay us our full rate so we can serve those who can't due to systematic issues or other situations.
With my online group program for perinatal folks, I want to pay the professionals I bring in to guest speak because, for far too long, small business owners (especially women) have been working for free. I no longer want to contribute to the "free labor" narrative.
I hope this helped you understand why your therapist, massage person, private pay medical provider, or elsewhere you support locally charges their rate. I welcome any questions or feedback on this topic.
It's not an easy conversation, but I hope we can discuss it more and, one day, have a system in the U.S. where medical insurance doesn't dictate people's level of care or where they choose to spend their money for their health.