Getting the right cost for your client is tricky and there are no right or wrong ways to work out what you should be charging.
However, thinking about what we discussed in Finance for the Non Financial Leader – we should ensure that we have sufficient income coming into the business to cover the expenses.
This simple calculator helps you to calculate what your ideal charge points are.
Your final guideline figure should then be bench marked against the type of coaching that you deliver. Other factors such as
- Coaching Experience
- The outcome required
- Commitment (Eg one off session or block)
- Time of day (evening/weekend could be a premium)
- Your comfort about working with the client
Typically, life coaching for newly qualified coaches can be £30 to £50 per hour, increasing to perhaps £50 to £100 per hour for more experienced (Source : Animas Coaching). At the other end of the scale, executive coaches can secure more specific coaching at £200 to £500 per hour. So, as you can see, there are a huge number of variants.
There is also a conversation about taxation. Some businesses decide to register for VAT (value added tax). This means that every month, or quarter they need to pay a balance to HMRC of what they have charged in VAT less what they have spent that includes VAT. There is a threshold above which there is not a choice as to whether the business should be VAT registered.
Typically business to business clients can reclaim VAT (but not always!), and the other type of customer, the private client, probably can’t reclaim this VAT. This may have an impact on your charging structures.
Eg for a private client you may charge £100 per hour – this would include a VAT element.
It is also important to consider other overheads.
Just paying your salary will not alone keep your business afloat. There are additional costs to consider such as internet costs, travel, training, meeting costs, your supervision, insurance, membership fees, marketing costs, learning, hosting costs, or any tax contributions (such as VAT and corporation tax) that your company needs to make on your behalf.
When the final results come through, remember that this hourly rate ONLY pays you so other factors mentioned above need to be represented in what you charge your client.