Monday, April 4, 2011

Got Your Knowledge, Got Your Facility...Now How to Establish Your Fees?

Here's the scenario....you've been training at a commercial gym for a few years and carry a pretty good client load. You make the club alot of money and you enjoy the commardiere among the other trainers. Your clients are getting great results and they are spreading the word about your genuine passion to help them coupled with your expertise and coaching. You enjoy having all the equipment the gym has to offer at your disposal, but you hardly ever use it. Your boss in the commercial gym doesn't hold you in the same light as your clients. He is only concerned with your numbers. He under-appreciates you and thinks that you are simply another hot-shot trainer that can be replaced:



Then, you finally decide that making money for a company is not in your best interest. You believe in yourself and your capabilities. You feel confident that you have acquired some business-sense knowledge and can offer a service that is valuable and worthy of private ownership. You feel it is time to start your own personal training business and make money for yourself.

Those are great aspirations. But when the smoke clears and you are ready to find your clients--or train your clients in their homes--you are left with one important question. How much do you charge them?

After 12 years in the fitness industry working for commercial and private gyms, I finally branched out and started my own business. After the remodeling, equipment purchasing, lease signing, and set up; I was left with one difficult and incomparable task: I needed to figure out how much to charge clients!

Sounds like it should be an easy answer? But truth be told, it is actually a more thought-out process than you may think. Many considerations have to be accounted for during the process of naming your price. But how do you go about coming up with a fee that makes you happy and your customers happy? Here are some tips that I used when I opened up my small facility as a small-time personal trainer:

Find info about your territorial demographics - First thing you should do is learn more about your community. It is very informative for you to learn about the household incomes in your town (and surrounding towns) where your business is located. If your business is located outside your residential town, its very important to learn more about the community and what the median income is, the number of households, and the age brackets consisted within the town. A very resourceful website is http://www.city-data.com.

Identify your competition and learn more about them - I have 3 personal training studios located within a 3 mile radius of me. Want to know how I found that out? Before the internet, I probably would have drove around the area or looked in the yellow pages; but today we can research using Google. I simply used keywords like "personal training studio in Hartford, CT area". Another great resource is the IDEA personal trainer finder: http://www.ideafit.com/find-fitness-professional. 
Having competition close to you is not enturely a bad thing. Most businesses would believe that if they are offering something like paper products whereas their prices are the only thing that must differentiate them. But in training services, you can set yourself apart simply by choosing your specialty (Crossfit, athletes, fat-loss, police/fire/rescue, etc)---and still be close to your competition. Just because someone owns a business doesn't mean that they are actually very good at what they do.


Find out more about what professionals in your area offer and what kinds of fees they are asking. This is called market research. Most likely, personal trainers will not post their fees on websites. You may think it is shady; but it is simply a way to attract a customer in the door and learn more about what they can and can't afford. Then, its like buying a car...the fee is announced and the haggling begins. However, you want to establish a fee based on what you offer differently than your competitor, as well as take into consideration what your qualifications are and level of experience. Most new trainers that develop their own business shoot to high on their fees and simply yield clipboards all day. Depending on the clients they attract, that is going to be up to you. More on this in the next tip...

Discover your niche or specialty - Like I stated, I have 3 personal training studios that offer bootcamps and one-on-one training within a 3-mile radius. They are all established and have been in business at their locations longer than I have. But I offer something different.My facility offers something different. Anyone that comes to my facility can tell it isn't a gym nor a country club. It is a "tool" for the training that takes place. The type of training you offer should stand apart from what area studios also offer. If you offer something different or specialize in training a certain type of population,  then you need to establish that. And your fee should be reflective of that.
My facility is a tool. What clients pay for is what is inside my head!
Don't under-charge and then up-charge! Never establish a fee that is too low. Chances are when your business starts rolling, you will want to increase the fee and that will anger some of your loyal patrons. You can always "grandfather" your loyal customers, but its never a good idea when the old clients begin chatting up with newer clients and your fees come up in conversation. Find out what your maximum charge for a one hour session fee would be that doesn't sound unrealistic based on the research you have done. Then add $5-10 to that amount. That additional five to ten dollars will act as a "cushion" for you so that you can offer promotional discounts in the future. If you aim your fees too low, it may be misconstrued as lower service quality.

Break down your budget. This is hard to do in the beginning. You'll need to get in at least 2-3 months worth in your facility before you are able to mathematically break down what your expenses are and how to cover them (income). Once you establish your rent, utilities, and other costs then you can break down exactly how many hours it would cost you to keep your business open and make a profit. From there, you can develop package fees and group training fees to off-set the "hourly" fee base. For instance, if you pay $800 for a monthly rent, plus $120 for electric, and $80 for heat--you have a definitive expense of $1000 per month. Other costs include stationary products, equipment necessities, cleaners, etc, etc. Now you know each month you must make $1000 in order to break even. And trust me, the first few months you probably won't even break even. You will lose some money simply because that is what happens in business start-ups. There is a 3 month "feel out" period that really depends on the amount of effort put into marketing and over-delivering on the quality of service. Next, ask yourself: how much do you want to work? Here is where you must factor in your experience, your niche, your service uniqueness, and what type of client you want to attract. If you charge $80 per hour, that means you must sell about 13 sessions per month to break even. 

In the end, the fee is based on what you truly believe your service is worth. Once you establish that, approach your mother, father, sibling, friend, or neighbor and ask them--would they pay amount for your training. If they laugh in your face, its because they know you too well.




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