What you have to understand about a starting a business in life coaching is that the word salary no longer applies.
Salaries are what you receive at your current job.
In other words, you put in 40 hours of work and receive a set amount of money as your paycheck. On top of this you have medical and dental benefits and a retirement package.
If you plan on becoming a life coach and starting your own business, then all this does not exist.
You are on your own.
Your life coach salary depends on how much effort you put into your business.
Your nose is now put to the grindstone; if you don’t find work then you don’t receive any money.
Does this make you nervous?
Don’t worry its quiet normal to feel this way. For so long you’ve been taught to find a safe, secure job that provides you with a paycheck and benefits.
If you want to become a coach then you are also deciding to become your own boss (i.e., self-employed).
Many people don’t understand this before leaving their job and attempting to start their own business. For this reason, many of these same people fail and end up returning to the workforce.
I recommend reading Rich Dad's Before You Quit Your Job
to better understand what I’m talking about. The book takes you through the differences between having a job and being self-employed. It may just change your mind about starting your own business.
If after reading the book and my recommendations here, you are still ready to become a life coach then let’s move on.
How Much Money You Can Earn
This sky is the limit when determining your life coach salary. The truth is you can earn as much as you want.
It depends on whether you want to coach on a full or part-time basis. Do you prefer keep your current job and coach part-time? Or, do want to coach full-time and quit your current job?
Whichever option you choose, there is money to be made in the coaching business.
But, for numbers sake let’s look at the average life coach salary.
New Coach - Typically, coaches new to the business charge between $100 – $300 per month for three, 30 to 45 minute sessions. These coaches have 0 to 2 years experience. Most do not have a
life coach certification
but have some
life coach training.
Established Coach - These are coaches with 3 to 5 years experience and their rates range from $400 – $700 per month; again, for three, 30 to 45 minute sessions. Some of them may be certified but most are not. However, all have extensive life coach training.
Experienced Coach - Experienced coaches have 6 to 20 years of experience and most all are certified life coaches with extensive coach training. These coaches charge on average $1000 and above per month for three to four, 30 to 45 minute sessions.
Don’t forget that you will need to subtract federal and state taxes from your life coach salary, as well as social security tax for the self-employed.
For further explanation on self-employment taxes I recommend that you consult with a tax advisor.
Life coaches usually charge a monthly fee versus hourly rates. Although there are coaches who use the hourly rate system, most use the monthly fee option.
This monthly fee will vary in range. Why? Well, like most other services that customers pay for, price depends on experience.
For example, say you need the roof replaced on your home. So, you pick up the phone and get estimates from various contractors. Then I personally pick the middle price. Why not the cheapest? Because you get what you pay for.
So as you can see, you will need to have many more clients to match or make more money than you earn at your current job before becoming a full-time life coach.
However, others keep their current job and coach only part-time. The choice is yours to make.
Do not limit your life coach salary by being pessimistic. You may be thinking, “There’s no way I can make it as a full-time coach. I might as well only plan to work part-time.”
I read on the web that only 5 percent of coaches are able to do it full-time.
I say, “Forget this statistic.” I want to you to think big about your life coach salary. If you set your mind to it to coach full-time then you can do it.
Get out there and find the clients you need to make it happen – no matter what.
Setting Your Price Point
Wonder what you should charge as a life coach? Let me help.
When determining a price point you must consider several factors…
• Value of your time
• Value of information
OK. Let’s take a further look at these factors.
The first two: experience and training are pretty self explanatory. It’s logical and fare to expect, the more experienced a coach is, the more clients should pay. Coaching is like any other skill; the more you do it, the better you become at it. Therefore, clients tend to want to pay for this experience.
Remember my example mentioned above about the roof contractor? Would you pay a premium price for a contractor with no experience? Of course not. However, I’m sure that you would be willing to pay more money for an experienced contractor versus less money for an inexperienced one, right?
So, this same concept applies to coaching. Therefore, the more experience you gain, the higher life coach salary you should charge.
On the other hand, if you lack coaching experience be ready to start off at the lower end of the pay scale.
I think it’s a get idea if you’re just starting out in the coaching business and want to gain experience. However, let me warn you that “free” is not always attractive to many clients. Many may think that your services are no good if you are simply giving them away for free.
Which leads me to the next factor to consider…
The value of your time.
What is your time worth?
This is a personal decision. However, I’m a firm believer that time is the most precious commodity in the world. It’s more valuable than anything. So when you choose to trade your time, trade it wisely. Consider this when making decisions about your life coach salary.
When determining your time’s worth think about things like
All these duties a part of your
life coach business
which are going to take away from time with family and friends.
That’s why I advise you not to devalue your time. Many new coaches often don’t charge enough for their services. Why? Because they feel that they will be rejected because clients will think the price is too high.
Don’t worry about this. You want to attract clients that have the money to pay for your time. Besides, the average client has the money to spend on coaching because all are financially secure. Otherwise, they wouldn’t have the money to look for coaching.
This leads me to the last factor…
The value of information.
Above I mentioned average monthly salaries and average times for sessions. However, understand that these are only averages. Don’t get stuck on average. Averages are just numbers that you can use as a guide.
What’s more important is the information you’re providing, not the averages. For example, what if I told you that I could give you a secret formula to cure cancer? How much would it be worth to you? How much would it be worth you to if you, or a family member, or a close friend had cancer?
Probably priceless, right? So, in the 5 seconds that it took me to hand you a piece of paper you would probably be willing to give me more than $1 million.
The point I’m trying to make here is not to confuse time with money. Many new coaches think that the more time they spend coaching clients equals more money. Not necessarily.
What’s more important is the value of the information you provide.
So, consider all these factors when determining your life coach salary.