As I work with coaches there is one thing that seems to be consistent with some – they are interested in money, but not in numbers. As I teach them my perception on the hows and whys of pricing and investment regarding their business, it seems as if there is a great fog that rests in this area of their business. I’m not sure if it’s fear, confusion, frustration of something more. What I do know is that if you want a profitable business you will need to do the math.
Coaches make a great exchange to have a coaching business. As a rule they exchange time, energy, knowledge and yes money. I believe it’s important to ensure that while you give these things out for the sake of your business, it’s important to gain them as well. That is if you expect your business to have longevity. For some reason, numbers often cause coaches to roll their eyes and tell me all the reasons why they “just want to help people”.
Here is a truth – even if you desire to give all of your coaching away for free, there is a cost to having a coaching business and the money comes from somewhere. It’s important to do the math on that equation because coaching can be a very expensive hobby. Let me share a story.
When I was in the 8th grade I was summoned to the principal’s office. I was terrified. I had no idea what I had done. I was attending a Catholic school – I’d just arrived there the year before after spending all of my years in a public school on the other side of town. I went into the office and sat down in a chair opposite of the principal who was behind her desk. And here was her question: What happened this marking period? Why didn’t you make the honor roll?
You see I’d made the honor roll every marking period since I’d arrived the year before. But here in my second marking period of the eighth grade, I didn’t make it. My response to her: I can’t do the math. The look on her face was perplexed. “That’s nonsense – they are just numbers and you can do whatever you want to do to them. You can make them bigger, smaller and even eliminate them. She spent the next hour showing me how to conquer long division. I never had issues with math again. Numbers became my friend.
When you think of all of the companies and organizations that solve problems for us, you have to admit – they do it at a cost. They create a solution to solving our issue and we happily exchange money to receive the solution. Whether it’s the money we pay for a car, for our food, for our pets or our vacations or even for that wonderful ice cream cone on a sun-drenched day. We have figured out what we can afford and they have figured out what they need us to pay. It’s really that simple.
What these businesses do with that money is up to them. Some purchase office equipment, heat and cool buildings, purchase items for their household, their family and kids, some of that money pays the wages of the folks working for them and yes some of that money purchases the ice cream that sits in the ice cream truck. (Yes, I really like ice cream!)
My point is: These decisions are all made because there are people doing the math to keep the businesses running – these businesses that we enjoy because they solve an issue for us. So, if you don’t do your math, how will you solve problems for your clients?
Ok Kim, can you make it simple? I’m so happy you asked! YES. Here are three simple things you can do to know your numbers.
- What are your monthly costs? What is your break even point?
- How much have you invested already?
- How much do you want to earn per month?
You can learn this entire process in detail in one of my previous articles called Pricing Your Coaching Products and Services. In this article, I break it down for you in simple, easily manageable steps that will make doing the math a piece of cake. Grab your calculator and get started!