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Want to know how to price your coaching or consulting packages properly? There are numerous advantages to pricing your services as a package, rather than by the hour, however, if you aren’t careful it is easy to price your packages wrongly and end up undercharging, being burnt out and not making enough money in your business. Keep on reading to find out how to price your coaching or consulting packages properly.
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Why you should consider packaging your services rather than charging by the hour
Before delving into how to price your coaching or consulting packages it is a good idea to understand why you should consider offer packages rather than charging by the hour. I want to emphasise that you should consider it, but it isn’t essential. In my honest opinion, there are too many people online telling people to move their services from hourly rates to packages. You absolutely can have a successful business charging by the hour and when you charge by the hour it is definitely easier to make sure your prices are right. However, some of the reason why you should consider packaging your services are.
- You aren’t penalised for being efficient – If you are a business owner that is charging by the hour then as you become more experienced and more efficient with your time you can bill less. The more efficient you become the less you get paid. That is ridiculous! When you charge in a package it doesn’t matter how efficient how you are. The price is fixed.
- The focus is on what happens for the client – When you charge by the hour it is easy for a potential client you few your services as a purely time exchange. When you move to packages you have to be super clear on the outcome of the package. The focus is on what happens for the client. When you focus on an outcome it is easier for a potential client to really see the value in hiring you and paying whatever you charge.
HOW TO PRICE YOUR COACHING OR CONSULTING PACKAGES PROPERLY
1: Be clear on what your minimum hourly rate is
It might sound counterintuitive that you are moving away from charging by the hour but need to know your minimum hourly rate. The fact is that if you want your coaching or consulting packages to be priced properly then you need to know your minimum hourly rate and you need to ensure that all of your packages are priced to allow you to achieve that minimum hourly rate.
To work out your minimum hourly rate you’ll need to know the following:
- Your financial goal for the year
- The number of hours you can work (on client work) across the year
- Financial costs of running the business.
Knowing these three things will allow you to be able to successfully calculate what your minimum hourly rate should be. Once you know what your minimum hourly rate is you should be ensuring that all of your packages allow you to achieve, and ideally exceed, that minimum hourly rate. However, in order to do that you need to know how many hours it will take to deliver your package.
2: Know (or predict) how many hours it will take to deliver the package
One of the downsides of packaging your services and offering a fixed price is that the client isn’t bothered about how long it takes you. They have paid a fixed fee for a fixed service and they expect you to deliver. If that takes you longer than expected you can’t charge extra. That means essentially your hourly rate will decrease. Therefore, it is essential when you pricing your services as a package that you have a good understanding of the amount of time it will take to deliver the package. If you have already offered the package previously and the amount of time has varied, then base your calculations on the 60-70% percentile. If your package is new, then always air on the side of caution. Try to be as realistic as possible, especially if you offer unlimited email/phone/text support
3: Make sure your pricing works with your other services
If you are only offering one service, then you can skip to number 4. However, if you are offering more than one service or package then you need to ensure that the prices work together. When you are offering more than one service a potential client is likely to look at all the different options and try to work out what is best for them. You want to make sure that your services are priced in a way that makes sense in relation to each other.
For example, clients expect to pay less to be in a group setting than a 1:1 session. So it wouldn’t make sense to have a VIP day that costs £700 but run a 1-day group workshop at £1,000. A potential buyer would look at these two options and think “Why is it less for me to work with them 1:1 than in a group setting?“. Now occasionally there are totally legitimate reasons for breaking the standard pricing conventions. Maybe the group workshop takes place in a wonderful location or maybe you have brought in other people to speak or maybe you’ve ensured that all of the participants met a certain criteria so the networking possibilities for attendees is a massive value. All of these reasons help justify the higher price point, but as a business owner, you need to be aware of breaking standard pricing conventions and ensure you are communicating the value to potential buyers.
ARE YOU STRUGGLING TO PRICE YOUR SERVICES?
Have you set prices that you aren’t 100% confident with?
If so, a Pricing Power Hour is for you.
We’ll work together to ensure that your prices are set in a way that you achieve your financial goals, business growth aspirations and work without getting burnt out.
To book a Pricing Power Hour or to find out more information click here.
4: Set your prices with future business growth in mind
When you are pricing your packages, you need to think about where your business is now, but also your future plans. If you are a consultant that wants to grow your consultancy firm and take on employees then that has an impact on your pricing in the future. Your packages would need to be priced in a way that doesn’t mean you have to deliver the service in order to be profitable. It is a very common mistake for service-based business owners to be pricing based on them delivering the work and they aren’t paying themselves properly, which means it is impossible for them to hire anyone else to do the work. Don’t let that happen to you. Price with growth in mind whether that be outsourcing, hiring employees or becoming VAT registered.
There you have it! You now know how to price your coaching or consulting packages properly.
As I said earlier selling your services in packages can be a great way to ensure you build a profitable business that pays you well. However, when pricing your services in a package format rather than by the hour you have to be a little more considered and ensure that the numbers add up.
In the comments, I would love to know what your biggest takeaway has been.
NEED HELP PRICING YOUR PACKAGES?
Pricing your own services is difficult, even if you are good with numbers. That’s why I run Pricing Power Hours. I’ll work by side, and do all the calculations, to ensure that your services are priced to attract your ideal client, to help you grow a successful business and ultimately ensure you make a profit and can pay yourself properly.
If you want to stop wasting time wondering if your pricing is right and confidently set, or revise, your pricing then book a Pricing Power Hour by clicking here.
Don’t think a Pricing Power Hour is right for you and want to work together in a different way? Drop me a message here to discuss other options.
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