Most people get caught up in trying to come up with a price for their time, rather than a price for the value they’re contributing to a client’s life. As a coach, the minutes you spend aren’t the most important part of your offering – it’s the victories that you help clients achieve.
Diana shares her motivations for becoming an entrepreneur and talks about why entrepreneurs need to focus on their bottom-line profit rather than their top-line revenue. We discuss why even successful entrepreneurs are often hesitant to look at their numbers and why you have to get out of this mindset. And, we share some of the key practices you can implement to ensure you’re building a business that’s truly profitable – not just making money (yes, there’s a difference!).
Welcome to the Rich Coach Club, the podcast that teaches you how to build your dream coaching practice and how to significantly increase your income. If you’re a coach and you’re determined to start making more money, this show is for you. I’m master certified life coach Susan Hyatt, and I’m psyched for you to join me on this journey. You’re listening to episode 31, here we go.
Okay, peeps, the wait is over. It’s time. On today’s episode, we’re discussing the one question that coaches ask me more than almost anything else. It’s a question that so many coaches agonize over; a question that keeps people awake at night feeling stressed and befuddled doing mental calculations, tossing and turning in the sheets. And that question is – you could probably guess – how much should I charge for my services?
So many coaches struggle to figure out how much to charge. How much for an hour of coaching? How much for six months of coaching? How much for an online program versus a program that happens face to face? And how come some coaches charge $50 an hour while others charge $500 or $1000 or $15000 an hour? How do you know if you’re worth $50 or $1500? And how do you put a price tag on something that’s kind of invisible, like happiness or wellness or confidence; how?
All of this can feel so confusing, I know. I’ve definitely wrestled with pricing drama in my head in the past, plenty of times, I promise. And there’s so much to discuss when it comes to pricing your coaching services; much more than I can cover in this podcast episode. But I will share a few things that might really help you out. And if I can help you exhale and unclench your shoulders and feel a little less tense and stressed about pricing, then I will consider this episode to be a huge success. So here we go.
Here’s your Two-Minute Pep-Talk for the week. This is the part of the show where I share some encouragement and inspiration to get your week started off right. And I try to keep things to 120 seconds or less.
When you’re a coach, one of the trickiest things about pricing is there’s such a wide range of prices in our industry. It’s really all over the board. You see coaches charging $600 for a six-week coaching program and you’ll see coaches charging 10K for a single day. And you’ll see online courses that are $99 and courses that are $2500, and everything in between.
And it can be really difficult to figure out, what’s the price point that’s appropriate for me? What can I charge? What’s too little? What’s too much? And also, what are my dream clients actually willing and able to pay?
Okay, if you’re feeling really confused about pricing, here’s an exercise for you to do. First, make a list of your last five clients; people who’ve paid you for coaching, or if you’re brand new, people you’ve coached for free. Write down their names, your last five clients. Five names, write them on a piece of paper.
And then next to each client’s name, write down the biggest victory that you helped that person to achieve. This might be a financial victory or a health victory, a relationship win, a creative breakthrough; any kind of victory or win that you helped this person get. And take some time to think about it and pause this audio if you need time to write.
So, to give you an example of what I mean, let’s say you’re a relationship coach and you work with people on all kinds of relationship, marriage, and dating issues. So your list might go like this – client number one, Maria, biggest victory, after two years of wondering should I stay or should I go, Maria finally made the decision to leave her marriage. She contacted a divorce attorney, she found her own apartment which she loves. She told me that she already feels 5000 pounds lighter and feels so much relief.
Client number two, Jessica, Jessica was doing online dating apps and not having much success and she was feeling burnt out and discouraged and I worked with her on some mindset blocks and encouraged her to take a break from dating apps for just a few weeks. Instead of dating, I encouraged her to focus on doing things that she loves to do like go to the spa for the day, go hiking, go check out a cute bookstore, pretend like you’re on vacation in your own city and do things that sound like fun. She did this and had a blast, and two guys flirted with her and asked for her number – and so on, you get the idea.
Write a few sentences about a victory that you helped each client to achieve. And once you’re done writing, take a minute and review what you’ve written. Read it back to yourself and let those words soak in. What you wrote down, that’s your work right there.
As a coach, you collaborated with each of those clients to make those beautiful things happen. You did that. That’s a big deal. And so, instead of asking yourself, what should I charge for one hour of my time, try asking some new questions.
Try asking questions like, what kinds of victories do my clients experience because of working with me? What does my client’s life look like now versus back before he hired me? Feeling brave enough to leave a marriage that feels like a prison, what’s that worth? Feeling excited to wake up and go to a job that you live, what is that worth? Waking up with energy, feeling healthy and strong and pain-free for the first time in years, what’s it worth?
These are the kinds of questions that might help you realize the true value of what you’re providing to your clients because you’re providing so much more than just an hour on the phone or a video meeting. You’re providing a path to a higher quality of life. So if you don’t already do this, definitely keep a record of the victories that you help your clients to get. Read back your list to yourself regularly and remind yourself that you’re not really charging for time on the clock. You’re charging for victories; results, benefits, breakthroughs, a new type of life. That is what your pricing should reflect.
Now, we’re moving into the part of the show where I give shout-outs to you; shout-outs to listeners, clients, all the wonderful people in my business community. And today, I want to give a shout-out to someone on iTunes going by the handle R-Happy.
Listen, R-Happy left me a five-star review that says, “Put your ego aside and put your big-girl panties on, preferably pretty ones, and be prepared to laugh and learn. Susan is the real deal. She lets you know who she is and exactly what it takes to build a six and even seven-figure business. Get ready for a wild ride learning from Susan and her uber successful guests and clients.”
Thank you so much, R-Happy. And listen, those are my shout-outs for today, and hey, if you have something to say about this show, please send an email to my team, [email protected], or post a five-star iTunes review about the show, or post something on social media and tag me and you might hear your name on a future episode. I love giving shout-outs to people in my community, so holla at me. Thank you for the love; I love you right back.
It’s time for another amazing interview. And today, I’m speaking with Diana House. So, Diana started her career as an attorney and later became an entrepreneur. I can’t wait for you guys to hear this story. She’s built several companies and was even featured on Dragon’s Den, which is the Canadian Version of Shark Tank. And oh my god, I love Shark Tank. I’m going to fangirl all over Diana when we speak in just a moment.
Today, Diana works with her amazing husband, Jeff. And they run a company called FFV capital, which focuses on private mortgages in Canada. Diana is so passionate about helping women make more money and make wise decisions with their money, so she’s the perfect guest for today’s episode on pricing.
I have so many questions for Diana about so many things, like why did she want to become an attorney and then change her mind and become an entrepreneur? I want to ask her advice on pricing and, of course, lots more. So, let’s talk to the amazing Diana. I know it’s going to be a fabulous conversation, so let’s dive in.
Susan: Welcome to the show Diana House.
Diana: Hey, Susa, so excited to hang out with you.
Susan: I’m so excited to have you here. And. You guys, I have gotten to know Diana over the past year because we’re in a mastermind together and I’ve been so impressed with her story of how she became who she is today. Diana, would you call yourself a money coach? What would you call yourself?
Diana: So, it’s a great question. I have no idea what I would really call myself, I just say kind of business finance and profit expert.
Susan: Ooh, I love that.
Diana: That’s kind of what I call myself, but you know what, am I coach? Sure, I am a coach. I think it’s whatever people think I am, I’m happy to be that for them.
Susan: So, here’s the shorthand, you guys. She helps you understand how to make and keep money. So it’s not just earning-power, it’s profit-power and wealth-building with Diana, which is very exciting.
Diana: I love the profit-power. I’ve never heard that.
Susan: Profit-power, I just made it up, so feel free to put it on your business cards, Diana.
Diana: I don’t have business cards, but yes, I will put it on my Insta bio.
Susan: So, Diana has such an interesting history. And you actually went to school to become an attorney, correct?
Diana: Yes, I went to law school, and three weeks into law school, I knew, I was like, there’s no way that I will be a lawyer. And I remember being really freaked out about this because I was like, okay, as a lawyer, I’m going to make at least six figures. If I’m going to not do that, I better come up with a way to do at least that. So that almost created this pressure for me to figure out another way where I could feel very aligned in my life and very connected to my passions, but also make a lot of money.
Susan: Right, what’s interesting and what I love about your story is that you’re like, three weeks in, you’re like, I’m not so sure about this. And I think a lot of kids who go to college do put a lot of pressure on themselves to have their whole lives figured out by the time they’re 18, at least in the US, to declare a major. I’m going through it right now with – I have a 20-year-old son, as you know, and an 18-year-old daughter. And I’m the life coach over here going, like, you don’t have to have it all figured out. Let yourself experiment and try different things. But in the reality of it, if you are entering college, university, there are certain things you’re going to have to decide on. And sometimes – I changed my major, for example, Diana, four times.
Diana: Girl, I’m with you. I think I read somewhere – did you study women’s studies? Oh no, journalism?
Susan: Oh, well I started out – I ditched journalism because my English 101 teacher told me I couldn’t write. And I didn’t have the confidence I have today to say, well maybe she’s wrong. I just believed her.
Diana: Yeah, I did a year of journalism school as well and I remember being told, like, in journalism school, you have to put these words in this box in this order, and I was like, yeah this isn’t going to work for me.
Susan: Well, what’s fascinating to me about the whole thing is, through changing my major all those times, I graduated with a degree in political science and a minor in women’s studies, so I’ve come full circle with – I had no idea then that I would be able to hook up my own microphone and have my own show, have my own TV show on social media or have my own platform to write. And so it’s just really interesting how our early interests come all the way back around. But you started out studying law, you knew it wasn’t necessarily for you. One of the best stories I’ve ever heard you tell is the story about how you went to that – it was either a job fair or a career fair – and you decided on the spot something pretty spontaneous that changed the whole trajectory.
Diana: Yes, it’s the weirdest story. So, high-level, three years of law school, then I ran away to Bali for three months and did a yoga teacher training to recover from law school, still had no idea what I wanted to do, but knew it wasn’t law, got back to Canada and I applied for at least 150 jobs. And this is 2008 when the financial kind of crisis – not the best time to be entering the job force. I could not get a job. I could not even get an interview for a job. And it was distressing because I was like, I know I have skills, I know I have personality, I know I’m creative. I’ve been employed my whole life. This has never been a struggle. But I was living in a town where I knew no one, and obviously, the power of network, and when you don’t have a network in a place, it can be very challenging.
So I went to this job fair. Again, this is like day 90 being unemployed, feeling really quite depressed at this point and I’m walking around the job fair seeing all of these companies and jobs that I don’t even want, and there is a booth for a – it’s called the Small Business Enterprise Center of Hamilton, Ontario, Canada. And I went up to them and I was like, “So what’s this all about?” We’re giving people grants, AKA free money, to start their own business. Like, bless Canada. And what it was – it wasn’t a ton of money. I believe it was $1500 at the beginning of the program and $1500 at the end of the program, so a combined $3000 and a teeny little bit of mentorship, and it wasn’t even really good mentorship. But nonetheless, they created this container for people to start their own business. You just had to write a business plan. So I remember, I went home and I asked my boyfriend at the time, I was like, I think I need to do this. And I was like, maybe the door that I had been knocking on, the employment door, was the wrong door. Maybe this is the path. And I was in such a place of desperation that I was willing to try anything.
Susan: Even entrepreneurship…
Diana: Even entrepreneurship. So, the funny story is, this company that I ended up starting was called Tiny Devotions. I ended up scaling it to be an over seven-figure company, being very profitable, all from this $3000 grant and this government program. And I remember, at the time, they were like, yeah this isn’t usually the kind of company that we would let into a program like this. I don’t know if it was a bit early in the ecommerce days, like they didn’t think that was a real business yet. But somehow, by the grace of god, they let me and that is how I started out as an entrepreneur.
Susan: I love this. And I actually, right after you told me this story, I told my husband this story and I’m like, how awesome is that, that she’s just walking around this job fair and then she’s like, “You know what, I’m going to go for this. I’m going to start a company.” And not only did you start a company, I actually knew about your company before I knew who you were, Tiny Devotions. I mean, it was a major company that made a lot of money for you.
Diana: Oh yes, I feel very, very fortunate and the reason why you wouldn’t have known about me is that I was not on the company website. I’m very introverted and in the past have not loved being out there. I prefer to be kind of a behind the scenes kind of entrepreneur, which I feel like I’ve really challenged myself around that over the past few months.
Susan: Yeah, and I think that, you know, it was a product-based company. And now, so you sold that, you decided, you know what, I’m kind of over this, I want to move onto other things. And how did you make the decision to move into the financial space?
Diana: Yeah, so I think selling Tiny Devotions probably was like a very late decision. I owned it for over 10 years and it was very early on, probably a few years in, that it felt actually like it wasn’t my thing anymore. However, because it was financially doing so well, I almost felt kind of like – you know the way some people feel about a really good job, they feel a little bit like ball and chain tied to it. I almost unfortunately felt that way about the company. So it was very easy to get to the place of letting go of it because I had wanted to let go of it for so long, but selling it took years. It took two years of focused kind of commitment time to sell it and it was a bit of a train-wreck transaction, but got to the end so very happy about that. So, after that, I was actually going to take four months off and just have some space, because I had owned a company for so long and I just hadn’t had that space.
And there’s this huge part of me that’s very intense like CEO business person, but there’s also this, like, very feminine delicate part of me that likes to have space and flow and explore. And the artist side of me decided to take that space. And a week into that’s pace, I had a meeting with our CFO for our other business, our mortgage company, and I had so much fun in this meeting, I was like literally radiant. And I was like, you know what, I really need to work with entrepreneurs around business finance, because so many entrepreneurs are struggling around this stuff and it’s so fun for me.
Susan: Well, first of all, yes. I mean, in my work with coaches – and all of y’all listening, I’m sure, will nod your heads – that it’s one thing to be gifted at the art of coaching and to really hone that skill and learn that skill. The business side of coaching, what comes up for most coaches is our money blocks and understanding how to price things, how to generate money. I love that you also talk about how to keep money and create wealth, which I’m fortunate enough to be married to someone who has always thought in that way, has always talked about wealth-building versus just generating an income or a salary. So, when you are working with entrepreneurs on financing, what are some of the top things that you find yourself teaching over and over and over again?
Diana: Yeah, and you know, it’s always the same thing, right? There’s these patterns, like, as humans, yes even though we’re all special snowflakes, all of us special snowflakes usually struggle with the same things. So there are definitely patterns. I think the first part is really the mindset of getting yourself into a really healthy money mindset of believing that, one, you are able to make money, and two, I call this the profit mindset, that you are able to actually be profitable and keep money. I have literally seen people that believe they can generate money, and they do, and sometimes it’s close to 50 million dollars in revenue, however, for certain reasons, they do not believe that they can keep money. So I have literally seen people that have close to 50 million dollar a year businesses that do not make money.
Susan: What? Say that again.
Diana: Yes, I’ve literally seen people that have made close to 50 million dollars a year on revenue, but because of a lack of a profit mindset, they literally do not make money.
Susan: And I, of course, have worked with individuals, not to the point of making 50 million a year and not making any profit, but a million a year for sure I’ve seen it, where it’s like, okay, and your expenses were $997,000, you know, like they made 3K.
Diana: For sure, and I use the 50-million-dollar company as an example because it’s such an extreme example. It really proves the point that it’s not about how much money you make. It’s really all about what kind of a steward you are. You need to have that foundation. And if you don’t learn how to manage like $10,000 of revenue, you definitely will not know how to manage $100,000 or a million or 10 million or 100 million. That I know to be true. And the other cool thing I got to do recently with our friend Chantelle, she runs a dance studio kind of incubator. I got to look at the financials of like let’s call it probably 20 or 30 dance studio owners, and the same thing. So they’re all in the exact same business, pretty much, different cities. And there would be the dance studio owner that would have a million dollars of revenue and keep nothing, and there would be the dance studio owner that would have $400,000 of revenue but keep $250,000. And so I think, as entrepreneurs, we get caught up in this being obsessed with the top line, obsessed with revenue. But really, you can’t pay your mortgage from the revenue number.
Susan: I think this is such an important point. And again, being married to someone who majored in finance and has worked in commercial real estate and development for 30 years, he would constantly say to me, but what did you keep? But what did you keep? And I would be like, shut up, I just sold out this program.
Diana: I love him.
Susan: I know, I love him too. And I have really started to think about and teach it in a way of, like, okay you and I have talked about retreats and you asking me, you know, are you making money at retreats, because a lot of the people that run retreats, it’s a slippery slope and it’s an easy thing to sell that can net you almost nothing if you’re not good at managing money…
Diana: Or you can lose money too.
Susan: Or you could lose money, absolutely. You can lose your ass on retreats. And I talk about, within the coaching world, selling a retreat, that’s expensive money to make, meaning, you know, if I sell a retreat for $10,000, I net $5000, so 50% of retreats. But I’ve worked with a lot of retreat facilitators, as you have, where they’re not paying attention to that and they’re just throwing money at it, and like you said, like losing money. So there are different types of things that coaches can sell that are easier to retain profit than others. But just in general, like, you’ve got to be able to look at your numbers and understand your numbers so that you’re not, “Oh I’m a six-figure coach, I’m a seven-figure coach, I’m an eight-figure coach. That sounds good, but what’s your profit?
Diana: Right, and so you nailed the second point. So, once someone has got to the place where they’re in a very healthy mindset, and I literally will not work with people if they’re not willing to work on their mindset first because all of the tactics in the world will not help them because they will sabotage, like 100%, if they don’t have that really kind of healthy mindset and they’ve worked through their money-wounds. So the second thing, when someone has worked through that – and there’s many ways to do that, you know, doing vision boarding, doing affirmations, doing journaling, you know, working with a money therapist or a therapist, or again, someone who very specifically goes into deeper money issues over time. So the second thing from there is they need to get into the habit, and you said it, looking at your numbers. And so, again, the amount of successful entrepreneurs, and I would say, you know, seven-figure-plus business that do not have access to their accounting files, so being on QuickBooks or Zero, it’s astounding. They’re not even looking at their accounting software. And whether it’s on an Excel sheet or in an accounting software, you need to look at your numbers and start to understand, like, what business am I actually in? What are the products or services that I’m selling? And which of these make money and which of these do I think make money but actually don’t? And even within a physical product company, there are usually some products that make a lot of money, some that make very little, and some that actually lose money.
And once people start looking at their numbers, they see that. On the coaching side, once – and I’ve worked with many coaches around this – once they start looking at their numbers, they start questioning things, like exactly with the retreat. Did this retreat actually make money, or once I look at the time that my team spent in putting this on as well as the cost of sales, the direct costs of putting on the retreat, did that work? And once they start looking at that, then they start considering, okay, how do I create new products and services that have a higher profitability level? So within coaching, you know, one of those things is often doing some kind of group coaching program, something more scalable, or doing what you do, which is, you know, you have so much demand at this point that you are able to charge, you know, a premium for your one on one. However, if you’re just starting out as a coach, you likely can’t charge Susan Hyatt rates because you’re not Susan Hyatt.
Susan: Well, it does take a while to – I think for a coach, what I love to say is, like, coach your face off and figure out what lane you want to be in with coaching, like where’s your heart in this work, and then charge according to the value that you know you’re providing. And honestly, for all of you new coaches listening, it’s easy to get caught up in money for minutes, like, “Oh it’s just an hour so how dare I charge X, Y, Z…” you know, whatever it is. But it’s not the amount of time you’re on the phone. It’s the impact that you’re going to have on that person’s life, the mindset change that you’re able to help facilitate. And that comes with experience. That comes with knowing what the value is.
Diana: Have you heard of this Picasso story?
Susan: No, tell me.
Diana: Oh my gosh, I think you’re going to love this because I think this paints the picture of what you just said so clearly. So, I don’t know if this is true or not, but it’s just a great analogy. So, someone came up to Pablo Picasso on the street and said, “Will you paint me a painting?” And he said sure, and so he takes his paint brush, and in two minutes paints this painting and passes it to the person and says, “Okay, that’s $10,000.” And the person was like, “Wait, what? Why are you charging $10,000 for something that took two minutes to do?” And he responded, “It took me a lifetime to learn how to paint that painting in two minutes.”
Susan: Yes, yes, it’s like his experience and talent and all that, it doesn’t actually matter how long it took, it’s the beauty of what he produced in that short amount of time.
Diana: For sure, and it takes us a lifetime to learn some of these skills. I know your coaching story, like you have put in the time. You’ve coached on so many different levels to so many different people that you know your stuff on a level that you’re definitely in the 1% of the 1% of the top coaches in the world, if not the best coach in the world…
Susan: Oh, come on…
Diana: I wouldn’t doubt it. Like, you might be the – you might be able to change your Insta bio; the number one coach in the world.
Susan: I think you’re my new PR agent, Diana. I think you have an extra career happening now. Well, I do think that it’s important. I love these discussions that you and I have had around profit because I do think, for coaches just starting out, when you’re considering – and this is something, when you sold Tiny Devotions and you became the financial guru that you are, I know that you were very thoughtful about what you were investing in for your company. And a lot of coaches listening to this podcast are trying to make good financial decisions about what to spend their money on to get their business going. Can you talk a little bit about some of the decisions that you made that you were like, I’m going to spend money on this, but not that?
Diana: For sure. So I have been an entrepreneur for 10 years, so I have a really large network. So, to be honest, to date, I actually haven’t spent any money really on anything, and that’s just because the low-hanging fruit of going to my network and just going to my relationships – and again, I now know enough about the inner world of entrepreneur’s businesses to know how many people are struggling with this business area. So I was like, I don’t actually need more people, I just need to put myself out there and connect with the people I know and just let them know that this is work that I’m doing. So really, I didn’t actually pretty much spend anything.
Susan: Amazing, and so instead of spending money, you put yourself out there. I’ve seen you going to conferences, giving talks. So you put your time, elbow grease, into promoting yourself versus spending money on stuff?
Diana: For sure, and about the speaking and things like that, I personally will not speak for free. I don’t know, would you speak for free?
Susan: No – actually, the answer is no except, hilarious story, I am speaking for free on April 9th here in Evansville because Scott Hyatt wants me to speak at his Rotary Club luncheon.
Diana: Oh my gosh, that is so cute. So, I have been invited to do many, like, hey come to this tele-summit and come do this – and for me, it is a hard no. For me, speaking is actually – I love it so much, but it’s also very time-intensive. Like, I have to think about it, I have to prepare, you know, I have to say no to other things. And so for me, I made the decision that I was not going to compromise that opportunity cost by saying yes to things unless they are paid. So even if it is like a friend who’s doing, like, “Hey, will you coach my group?” I’m like, sure, I do have a friends and family rate, it’s X, but I will not speak for free and I will not speak under that, because that to me is part of the business. I feel like there’s huge culture right now of, like, come speak for free on my stage so you can sell your thing. And I’m like, I actually don’t have like a program that I’m selling yet. I’m just too early in that venture. So the speaking, to me, is the labor.
And so yes, there’s an ego part of me that, like, recently I just got asked to speak on a significantly bigger stage than I’ve ever got to speak at and they didn’t want to pay me. and yes, there was this ego part of me being like, but I kind of want to do it and I kind of want to say that I got to do that and so on and so on, but I was like, nope, I am not doing that. And it’s funny, I feel like as soon as you cut that off, I feel like you get new opportunities from other people that are like, we’ll pay you to do that and we will value the time that it takes to do that. And it does take time. Every time I speak, I forget, like, there’s the travel time, there’s the preparation time, there’s the recovery time after. There’s so much that goes along with it, and like, yeah, no, I won’t do that for free.
Susan: And the other thing that I wanted to say about this that I love that you just said is that if getting right with your money and value starts with you valuing your own work, there is, in terms of a new coach putting themselves out there, there can be a strategy that you employ that if you’re unknown, you can speak for free to try to get clients on the backend of that. But if that’s not part of your strategy, I am 1000% with you. I was approached to speak at something that I wanted to speak at as well, similar to your story. I’m like, that’s a great event. It would be great PR for me. But at the end of the day, what you’re saying. It’s going to cost me money to get there, it’s going to take away from my business. I’m just not doing it. And I think you’re right that it sends a message. Like, I understand my worth, and if you want me, you’re going to have to invest.
Diana: For sure, and not to say that – at the beginning, you have to do what it takes. And for sure, my first 20 clients for the finance consulting thing, I did not charge a lot of money. And that was I wanted to get to the place where I felt like I knew what the patterns were, I knew that I could help them. I was willing to like grind it out for those first kind of 20 clients, and then after that, I was like, okay, cool, I know my stuff now, and now I know that in order to support people better, the only way I’m going to work with them is in a container that’s not a one-off experience, because that does not serve people. Especially with the finance stuff, because we give them a list of, like, implementation stuff, and honestly, most people are not going to do that if they don’t have someone in their corner holding them accountable and taking them along the way. So I get it, there’s phases. I think, like, level one, grind it out, do whatever it takes, and I did, you know. I was writing free content for people and things like that. But then I realized, oh snap, I’m actually getting too busy. I graduated past that, like, will do things for free, and now I’m like, well no now I just don’t have the capacity, so I will do nothing for free now.
Susan: Right, you definitely reach a point where that’s just not feasible anymore. And there are certainly things over the years that I used to do happily that now I’m like, actually, that doesn’t really fit in what I’m doing now and where I’m going and how busy I am. So, for the coaches listening, I heard, within this conversation, a couple of tips. One is, turn towards your money. Know what is selling and for how much and what your expenses are, and just get truthful and honest with yourself about what your gross and what your net actually is.
Diana: Totally, and if you don’t know what net is – Richard Branson didn’t know until he was about 50, which is outstanding because he was already a millionaire at that point. But net is that bottom number. It’s profit. It’s what you’re actually taking home. And just make sure you don’t get hypnotized by that top number. And the cool thing is, every time an entrepreneur looks at their numbers and every time I’ve sat down to do this, as soon as they see their numbers, they actually know what to do to make it better.
Susan: People get so scared to really look at the numbers. It’s the equivalent of not opening your bills when the mail comes. Like, when I was newly married, I can remember doing that, just like, oh I don’t want to open, I don’t want to open. And you have to turn towards your money. And then, what would you say is the biggest – other than making sure you actually look and understand your numbers – what would you say is the other biggest thing that entrepreneurs need to embrace to build wealth?
Diana: So, once your profitability – and this is not my idea, this is an idea that I’ve stolen from tony Robbins. And so what that idea is, is you need to have two businesses. You have your operating business, and then you have – I don’t remember his specific term as I went to his course years ago, but you need to have your personal finance business. And so, this is the business that is making you money whether you are working or not, whether you’re taking on new clients or not, whether you are hustling your butt off or whether you are sick in bed. And that is your vehicle for creating wealth.
And I feel like, Susan, we’re both very lucky because we both married real estate guys, and so we got to inherit some of that knowledge and understanding about this. So, what Tony suggested, and what I also suggest to people, is once you pay yourself from profit into your personal finance account, you should have at least one or two other accounts. One of those should be a savings account, and you should just decide, like right now, decide what percentage of that money is going into your savings account. And just decide, is it 10%, is it 20%, is it 50%, is it 80%? Just decide and either set up an automatic reoccurring thing that grabs that money every time you pay yourself or every time you transfer yourself, just do another transfer.
Susan: And then from there, you should transfer a good chunk of that, especially once you have built up a reserve fund – which it breaks my heart to see how few people, especially entrepreneurs, even have like a savings account. Like, you cannot live paycheck to paycheck as an entrepreneur, or as anyone. Like, you don’t know what’s going to be coming down the line. And there is going to be something. Someone’s going to get sick, you know, there’s going to be some kind of issue, something’s going to break in your house so you need to have that reserve fund. And I do think it will make you a better entrepreneur if you do because you’ll be less operating out of a place of desperation and more operating out of a place of really empowerment.
Diana: And so, from there, you have to figure out, what is your personal business going to be? Like, how are you going to invest that money, your hard-earned money, in your business? How are you going to invest that in your personal business? And so, for me, the two ways that my husband and I do this is through commercial real estate investing in Canada as well as private mortgages. And so, again, we’re very lucky because one of our businesses is actually in the private mortgage space, so we get access to a lot of deals. And I know your husband also does this. So you’re able to do that. But there are many, many ways to do this. I always tell people, like, find your unfair advantage with passive income. And so we’ve been guiding a friend of ours through this, who you know but I won’t name her in case she doesn’t want to be on here, and she just told me, “I actually have a colleague that has done commercial real estate investing for 10 years and I’ve worked with them and I trust them. I think I’m going to pursue that as a vehicle.” And I’m like, fantastic. It does help if you have a relationship with someone. And if you don’t, you could even start with things like the stock market. Maybe you know someone who’s really, really good at that and a really, really great advisor. But I think, you know, avoiding having investments and avoiding your money making money while you’re sleeping, is a massive issue for most entrepreneurs who are way too focused on actively making money and we’re not considering how we’re really going to be set up for success forever through passive income.
Susan: Yeah, I think you’ve just described it so beautifully. And I do think that the world is so different today than it used to be. And it used to be, you know, our parents did things like maybe they had a 401K and maybe they invested in stocks and did some things like that, but there are so many ways to invest your money so that you set yourself up for wealth. And in the show notes, I’ll put some ideas for everyone in there. But for sure, the way that we have built wealth in my family, because of Scott’s business, is commercial real estate. I know, when I was much younger and I we would take a chunk of our money and put it in a building, I would be like, “Well I want to go to Italy, why are we doing this?” And now, as I’m 45, I’m so appreciative of some of the tough decisions that we made over the years; tough in the sense that it’s long-term vision versus short-term gain.
Diana: Yes. And the best story that I have – and I know we’re pretty much running out of time, so I’ll end here if we want, but recently, I was on the Eventual Millionaire Podcast. I don’t know if you’re familiar with it. And so, in order to be on that podcast, you have to submit your net worth and where your net worth came from. So, I have sold two ecommerce businesses. The other one was a sock company Cole + Parker. I had, I hate to use the word cash cow businesses, but Tiny devotions was very much a cash cow business for many years. So you know, I made a lot of money in my businesses plus I sold businesses. And the coolest thing was when I did this personal net worth assessment, I realized, holy shoot, over 50% of our net worth has come from commercial real estate investing, not all these businesses and selling these businesses and things like that. So that was a massive insight for me. And what actually shifted me to want to focus even more on that in 2019 and beyond, that that has actually had such a huge impact to our financial health.
Susan: So amazing, I can’t wait for Scott Hyatt to listen to this episode because he’ll be so excited to hear you say that. He really has been helping people for 30 years do that and I know you guys are doing it up in Canada. So, Diana, I want to thank you for being a presence online and in real life for me, a powerhouse, and helping entrepreneurs face the music with their numbers, create profit, and then eventually set themselves up for passive income wealth.
Diana: It was such a joy to get to spend more time with you.
Susan: Thank you.
On today’s episode, we’ve been talking about pricing. Pricing is such a big topic and there are so many angles to consider, like for starters, your credentials, your experience level, and your confidence as a coach, what your offering, how you’re packaging your offer, and exactly what’s included, the victories your client can expect to experience, and what type of client you’re targeting and what they can reasonably afford to pay.
So, for instance, if you want to coach college teenage girls, then your pricing might be a little different than if you want to coach CEOs from Fortune 100 companies. So again, there’s a lot to consider when it comes to pricing, and every coach and situation is unique. But here’s one more little nugget of advice that might help you out; consider how much your client will save by hiring you. That’s right, how much will someone save by paying you to be their coach?
For instance, maybe you help couples learn how to communicate better and build more trust to stay together, therefore saving your clients and helping them avoid 100K in expensive legal fees and divorce settlements. Big savings, right?
Maybe you help your client write her damn book already; the book she’s been dying to write forever. She can pay you 10K for writing coaching instead of spending $100,000 to enroll in a graduate school program like an MFA in creative writing. Look, of course, there’s nothing wrong with attending grad school if that’s something you really want to do, but perhaps hiring you as a book coach would help your client to avoid tons of unnecessary student loan debt.
Maybe one of your typical clients will waste 3K a year on a gym membership they never use and expensive organic produce that just rots in their fridge and never gets eaten and so on. By hiring you as their health coach, they can learn how to build new habits and stop wasting all that money.
Consider all the ways in which your client can save hundreds, even thousands, by hiring you. How much money will you help them save and how much time too? It’s really interesting to tally it up. And this might really change your attitude about pricing and your marketing of your services.
Once you realize, okay, whoa, by paying me $6000, my client is actually going to save $10,000 and also probably earn $50,000 on top of that, when you think about pricing in those terms, it can really shift your mindset. And, of course, you can communicate this information to your clients and it can help them see why hiring you is such a smart move. In some instances, you might realize they literally can’t afford not to hire you.
Thank you for listening to today’s episode. I hope you’re feeling a little calmer about pricing, a little less tense. Hopefully your shoulders aren’t scrunched up around your ears anymore. And definitely go back and do the exercises I suggested earlier in this episode.
To refresh your memory, I want you to make a list of your last five clients and the little victories you helped them to achieve. And then, also, I want you to tabulate all the money you might help your clients save if they hire you. Do those two things. These quick exercises will boost your confidence and help you see that your services are worth so much more.
Alright, thank you so much listening to Susan Hyatt’s Rich Coach Club. If you enjoyed today’s show, please head over to shyatt.com/rich where you’ll find a free worksheet with audio called Three Things You Can Do Right Now To Get More Clients. You can download the worksheet and the audio, print it out, there’s a fun checklist for you to check off. Just three things to do. Check, check, checkidy-check.
This worksheet makes finding clients feel so much simpler and not so scary. So head to shyatt.com/rich to get that worksheet. Over there, you’re also going to find a free Facebook you can join especially for coaches. Bring your coaching practice and your income to the next level at shyatt.com. See you next week.