November 16, 2020
Business Coaching can vary from free (see YouTube and free courses like on Udemy) to incredibly expensive (think Tony Robbins and $1m per year to work with the guy...but he's good, right?!).
And then the various type of business coaches who fall in between on my coaching bandwidth model.
These include the:
As you can imagine, one of the most common questions that I get asked is how much does business coaching cost?
I'm going to try and give you an honest and objective view about how much business coaches charge and the reasons why they charge in the way that they do. Imagine that with anything, take cars, for example, you can get the cheapest cheap cars that cost £10k or you can get super expensive Bugatti Veyrons that costs several million pounds to buy. It's the same with coaches.
Coaching and knowledge come in several different formats, business coaches being one of those. That business knowledge can be in the form of free YouTube videos right the way up to super expensive, million dollars a year coaches who work with a limited select number of clients.
I'm going to work through the pricing bandwidth model for coaches and explain to you five different ways that coaches charge for their time, their expertise and their knowledge.
As with any service you're investing in, especially when it comes to your business, a business coach is no different. I have a firm belief that if you buy cheap, you buy twice. I'm going to explain why. I would suggest that if you're looking at an investment in a business coach as a cost to your business, you're looking at it wrong.
A business coach is here to offer you a blueprint to speed up the process of growing your business, getting more clients making your business run more efficiently and ultimately making more money. So a business coach shouldn't be seen as a cost. There are sunk costs in your business, things like overheads, rent, paying for your mobile phone bill etc. That’s money that you're going to give away to service providers that you're not going to see back.
A business coach is different.
A business coach is here to help you grow your business, scale it, increase your turnover and ultimately make your business more profitable. I.e making more money.
When you're listening to the pricing bandwidth model, and the different ways business coaching is delivered, I want you to bear that in mind a good business coach will be solidly focused on getting you a return on investment (ROI) for your business in the shortest possible time which means they have skin in the game.
It means that you have skin in the game and in working together you grow your business faster than you could do on your own. I'm going to offer another alternative way to look at investing in a business coach compared to other investments you could make. Other investments such as investing in property or investing in stocks and shares or Bitcoin or commodities like gold, silver, and crops and various things like that. All of those different investments will ultimately be held, in terms of their value, by external circumstances that are going on, very much outside of your control.
When you spend money in your business, it's very much in your control. You have to weigh up when you spend money on a service provider within your business, how is it going to make you more money back in return?
In your business, you can invest £10k in a business and turn it into £100,000 a year turnover business, further down the line. The ROI you can get on investing in a business is significantly higher than you could get on any of the other traditional ways of investing your money.
Now, I mentioned about pricing bandwidth, especially when it comes to business coaches and how they charge; I want you to imagine that a lot of people see investing in coaches or service providers as a binary decision.
That it's expensive or it's not expensive. I can afford it, or I can't. It's a yes or a no. But when it comes to all of the different business coaches on the spectrum, there are five or six different ways that those business coaches charge and I'm going to work through each one of those ways.
If you're looking for a business coach you can make a very well-educated decision about who it is that you're going to invest in and why. Now I'm not going to lie. You can get some great business coaching advice online and completely for free. There's a tonne of YouTube videos out there, which you can go and consume, but you've got to know what it is that you're searching for and what results you want to get out of watching those videos.
Also, you've got to implement whatever you learn from those videos on your own. That is where a business coach comes into their own because a business coach isn't just about giving you information. A good business coach will hold you to account to make sure that you are implementing everything which you discussed during your coaching sessions.
Ultimately if you wanna get good business advice you can buy a good book or you can go and find it on a platform like YouTube.
There are tonnes of great courses available that you can get for free, which will start to lay the foundations for growing your business especially when you're starting up.
A lot of business owners when they're starting up don't have a lot of money. When a business coach comes along and says, “It's going to cost you several thousand pounds to work with me!” and you've not made any money yet, relatively, that feels like a big chunk of change.
But again, I want you to think about it from the perspective of what investment you're making in your business whether it's time or money. With a lot of the YouTube videos, you're probably going to have to invest a lot more of your time filtering out all of the dross and rubbish on YouTube. In order to find the videos and follow the right sorts of people who are going to give you sound advice that is easy to implement that's going to get you good results.
It's going to take you longer. If you're doing it yourself, it's going to take you a lot longer to get the desired outcome and results for your business. There's nothing wrong with that. If you're comfortable and you want it, and you're happy for it to take a bit longer and you've got the time maybe you've got some cash reserves saved up, by all means, take the DIY approach, watch some YouTube videos, buy a couple of books and away you go.
From free on YouTube, we then move up to the next level on the pricing bandwidth for business coaching and business advice. And that is courses.
These courses are typically priced anywhere from say $50 up to $250 or even $500.
The idea again though, is that this is taking the YouTube model but now we're building out some structured content in a linear format so that you can follow that instructional advice in an organised fashion. It’s great because it's affordable business advice. And when you're bootstrapped and you're starting out, it's a great place to start. However, the downside to that is a lot of these DIY courses don't come with any practical, tactical coaching advice in terms of being able to help you implement, and to hold you to account.
Courses are better than free YouTube videos because now the content is more organised and it feels a bit more like there's a blueprint. Maybe you'll get a workbook with it but you don't get the rocket, which you need to implement and push forward with your ideas. You still got to have a lot of the fears kicking around about, “Is this going to work?” or you'll try it and you don't know at which point to stop trying because that thing doesn't work for you.
When do you pivot and try a new idea?
Again, that's the benefit of having a physical business coach involved is that they can help you walk through those key decisions about when to pivot, when to try something different and when to move on to the next opportunity.
Typically for a lot of those courses, you've got access to it for as long as you need it. It's there so that whenever you feel that you want to, you can dive in and consume that content and relook at that advice whenever you want. Sometimes compared to YouTube; you watch a YouTube video and then it disappears. You struggle to find it again. Whereas with a course you'll have a login. You can go log in and watch those videos whenever you like. And then you can have a go implementing it.
Level three on the pricing bandwidth model when it comes to how much business coaches charge is time for money.
It's what I call the “value level” at level three.
This is where you take on a coach and they typically charge you x number of pounds per hour or per session. You will typically set up a monthly direct debit or standing order with them. And you just carry on coaching ad infinitum.
This is the point where you've got one-to-one interaction with a person now instead of just being out to consume content on a course. You'll be able to bounce ideas back and forth between you and the coach. They will challenge you on some of your belief systems. They will push you further than maybe you might've gone in terms of trying to implement some of the things which they're teaching you.
The challenge though, around time-for-money - I've done another video which I'll drop a link into this one around why charging time for money is fundamentally unethical - the challenge around a coach who is charging an hourly rate, they typically will be charging somewhere between maybe £50 an hour up to £250 an hour or maybe even more.
A coach who is charging time for money, it's within their interest to keep on selling you more hours to pay their mortgage and to put food on their table.
Because when you stop coaching with them, they stop earning money.
I don't feel that it's a very good relationship between coach and client when it's on a per hour basis. And also you get what you pay for! A £50 an hour coach is going to be something substantially different to a coach who is charging £10k for a programme.
I want you to bear that in mind when you're paying a coach by the hour, it's within their interest to sell you as many hours as they possibly can. If you're interested to know more about going to that value exchange and why hourly rates, day rates are fundamentally unethical, I have done another video about that so I drop a link to it below.
Do go and check that out!
Just think about this.
Great, if you get one coaching session and you get the desired outcome that you want and bang we're done. I don't think the coach would be happy about that because it's just one session.
But imagine this scenario where it takes you longer to implement whatever advice is which they're giving you. Maybe if they're not that experienced a coach or maybe the advice they’re giving you isn't that good.
Now all of a sudden it's taking you several months or maybe even years to get your business to the point of where you wanted to get it to. Now the only person who is benefiting from that is the coach because they're just selling you hour after hour after hour of coaching. That's not very good for the relationship. It gets to a point whereby resentment starts to build up between coach and client.
I've seen this on many occasions because what tends to happen is coaching clients who've had a bad experience on an hourly rate and not got the results that they wanted, they tend to come to me.
Good for me because I get great results from my clients, but I'm just warning you to be very careful about when you're buying a coach at an hourly rate, who's winning out of this relationship?
Do go and check out that video about hourly rates being unethical.
That being said, there are also some excellent coaches out there who do charge by the hour, and you can get some fantastic advice.
But do your research! Do make sure that you've checked out their client success, their testimonials, their case studies and their reviews. Do they have a good number of positive Google reviews on there? Do they have several video testimonials that you can go and check out?
Ascertain whether they're a good coach and what sort of results to expect through working with them?
The fourth level is my favourite. This is where you get into that, what I call, “expert space”.
This is where you have a coach who has a blueprint and who has resources behind them.
They have a structure to their programme and they know that they get consistent results by making every client follow the same structure within that programme.
They have a very specific niche which they operate in and they also focus down, not just on market needs, but also the product niche. Maybe they work on just two or three or four very specific areas of a business where they know they make the most amount of impact. These coaches know their value.
They also know that because they have a set way of working, that their results are repeatable every time that they bring a client into their programme, that's it's going to present the same results for every client.
Generally speaking, expert coaches will deliver that coaching programme over a fixed length of time for a fixed fee and you will know exactly what you're getting off the back end of it.
One of the great things about that as a potential client of that coach, you've seen all of the great results they get through their case studies and reviews and things like that.
And I'll explain why I said that in a second.
You're going to want to protect that investment. It's going to be a lot of money, and you're going to want to make sure that you get the results which you and the coach agreed that you were going to get, which means you're going to implement.
You're going to push hard to get the most out of that coaching programme.
Now I did just elude to the expert coach versus the hourly rate coach and why an hourly rate coach could end up being more expensive.
Imagine a scenario where you're spending say £3k on a coaching programme with an expert coach. That's a fixed price over a clearly defined period. You know what results you can expect.
An hourly rate coach; let's say, you're spending £500 a month with them, for example, for a two-hour session once a month. So £250 an hour, for example, but £500 a month. That's what you're in for. Now, they may initially sell you a six-month coaching programme.
All of a sudden the hourly rate coach is now the same price as the expert coach who is £3k, but you get to the end of the six months and you haven't got the desired results. Well now that hourly rate coach is going to start selling you more months of coaching. So ultimately when you buy that perceived cheaper, hourly-rate coach it could ultimately end up costing you more than paying a fixed fee for a structured programme that an expert coach is going to deliver with you.
If you're looking for a business coach I would thoroughly recommend you do go and shop around and speak to two or three different business coaches so that you can get a feel for what it is that they offer, how they charge, what the structure of that programme is going to be etc.
The coach-client relationship is quite a personal one. You've got to make sure that you're going to get along with that coach over a long period. If you feel that they're going to challenge you and you're not going to like that then that's going to present a bit of friction in that coach-client relationship.
The other thing as well is don't be afraid to ask a coach what their guarantees are.
Now let's be fair, nothing in life is guaranteed but an expert coach which has a structure to their programme, that's had hundreds of clients come through that programme and they get repeatable results is going to be more inclined to say to you, “Look, listen, if you go and do all of the work that we agree that you're going to do, and you don't get the results, I'll give you your money back!”
That's really should be music to your ears. It's exactly what I do. I’ll be 100% transparent at this point. We have a complete 100% money-back guarantee on our product because if somebody comes into the programme and it ultimately isn't a good fit, I haven't done my homework properly.
I haven't assessed and qualified that prospective client well enough and made sure that they are going to come onto my programme for the right reasons and get the desired outcome and the results which they want, and the results which I'm promising them.
I have no problem with refunding a client who doesn't get the results.
Another thing you can do is ask your coach, “Have you ever had to refund a client?”
For the expert coach, this shouldn't be a problem because effectively you're buying a product, you're buying a package. And so like any good product or package, there is a refund policy like John Lewis do, you can return anything anytime if it doesn't live up to the expectations.
A time for money coach, however, if you're paying them every month and you don't get the results. Then you say to them, six months down the line, ”Can I have a refund?” You're going to have an issue here because six months down the line, paying the monthly and don't forget that money has been paying their mortgage and putting food on their table. It's unlikely they've got the reserves in place to be able to refund you if you ask for it.
There's an upside and a downside to both options.
Generally, though the more expensive expert level coaches have got more money in their coffers because they know that might be a very small percentage of people who they have to refund over some time.
Me, for example, I always hold some cash back just on the off chance that things don't go to plan and we have to refund somebody.
I've only ever had to do that twice at the 150 plus clients who've been through the Fearless Business Accelerator. Less than 2% I think is a great ratio. That means we've got a 99% success rate on our programme and I'm not afraid to shout about those results and also protect those results.
The final type of coach on this model, which I'm explaining to you about how much coaches charge is what I call the “guru status coach”.
These are the guys who will charge high five figures, six figures or even seven figures to work with them. They may have a strong social media following. They've got a big audience which means that they can afford to charge lots of money because they're in high demand.
You will see some of the best coaches out there charging $100,000 a year even, to work with them.
You could even go up to the next level of the initiative beyond that, which is when you look at the likes of somebody like Tony Robbins. It costs a million dollars a year if you want to work with Tony Robbins on a one-to-one basis.
He only has to work with 10 clients a year to make $10 million a year out of his coaching programme. But the guy's been around for 30 plus years. He's best known for his work which he's done in the NLP space. He's built up an incredible following. He's got some incredible events and learnings which he's put out there.
I don't necessarily agree with some of the things which he says or some of his style of coaching. However, I've got to be very respectful of the size and scale of the business which he set up there as a business coach. He's inspiring to see what he's done but as I've suggested here, there's bandwidth.
At this end of the bandwidth, we've got free, cheap, very small amounts of money. At the other end of the bandwidth, we've got a million dollars a year, but just to work with... that's one guy who charges that amount of money.
If you think about it, as you follow the chart down through and this red line on the diagram, which refers to the amount of competition at each of those five stages as you go through the pricing bandwidth model.
From highly competitive in the YouTube space, there is an absolute tonne of content out there which more and more getting uploaded every day.
Right the way through, if you follow it down to just one Tony Robbins.
In that expert space, it means the more expensive the coach is, the less competition there is.
I position myself in the middle of that bandwidth model moving more towards the expert space. I wouldn't class myself as a guru certainly.
The coaches that position themselves in the expert space, they know their value and generally speaking, they are very good coaches.
It's well worth investigating a multitude of different types of coaches depending on what point you are in your business journey.
I'll reiterate, don't see a business coach as a cost on the bottom of your profit and loss - like an overhead in your business.
A good coach will be able to deliver a significant return on investment when you start working with them. They should be able to get you clearly defined results which come with some going to a guarantee. And if you find a coach who can't offer that, don't go with them, but do shop around, go and look at lots of different coaches.
Listen, I hope you found that video helpful. By all means, throw any questions into the comments below and don't forget as well, if you enjoyed this video do stick a thumbs up on there, go and like it and do subscribe to the channel because I've got plenty more videos out there to help other coaches, consultants and freelancers to price their products better and confidently charge more.
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