Creating Equitable Pricing and Payment Plans for a Thriving Online Coaching Business

Welcome back to another episode of the Sophie Kessner podcast. In this episode, i want to dive into an interesting conversation I’ve been seeing float around in the online space, specifically on Instagram, and it’s the conversation around payment plans, pricing and what actually makes sense. Now, at the time of the recording of this episode, it is March of 2023. And if you’re in the online coaching space, it is very likely that you have seen a lot of the drama per se, all of the different conversations that have been had with different folks and different business models, and how some folks interpret those business models as either being predatory, as being inequitable, as being problematic. So I want to spend some time today unpacking the conversation a little bit more, and especially in tandem with the conversation of pricing. We’ve been on a little bit of a track the last few episodes talking about financial literacy, talking about sales, and so in this episode, really, what I want to look at are a few core questions. One, how do you actually price your products and services in an equitable way that pays you an equitable salary? Because if you are charging so little that you cannot even pay your bills and you’re working exponential hours, that is not an equitable price either. But, additionally, how do you actually make sure that you’re pricing your services so that they make sense for the people that are coming into it and that you’re trying to support? And then the other conversation of this is do payment plans make sense? How do you know that somebody is actually the right fit for what you do and that it makes sense for what you’re supporting them with? So let’s go ahead and dive on in And, as always, if you prefer a more visual component to the podcast episodes I know I really like to write and read There’s also the option for the blog that goes with this podcast, where I go a lot more in depth and a lot more in detail than I would typically go in the actual audio of it, because my thoughts tend to be more refined when we get into the writing version. So, that being said, you can check that out on my site at Sophie Kestner 4 slash podcast. Otherwise, let’s dive in. So pricing, pricing, pricing, pricing. This is an interesting conversation. I think it goes really really well on the back end of the financial literacy part two, where we were starting to unpack the business models. Now, if you haven’t looked at the blog for this, i highly, highly, highly recommend And I’m actually going to go ahead and pull that up on my end as well. So we’re going to go to the Sophie Kestercom forward slash blog And or you could go to the podcast and it’s going to be episode three, part two financial literacy and business models. Okay, so we want to go ahead and we want to check that out. We’re going to click, read more And in here we unpack three of the most prominent types of business models.
We’ve got one on one coaching. We’ve got the cohort or group model whether you’re doing evergreen or live launches And then we’ve got the self study version. Now there’s a lot of information on the on the blog, so I’m going to continue to refer back to that. I highly recommend checking it out. But for the purpose of this episode, we want to dive into the pricing. Now I’m going to use the examples that I’ve already written out on the blog. So if you’re wondering where I’m getting these numbers from, it’s all from the examples that I’ve already created.
Now let’s start with one on one coaching. In the example that I outlined on the blog, we are looking at the one on one pricing model for a 12 week program, because this tends to be the standard place. Most coaches start for whatever reason, and they are doing weekly 60 minute zoom calls. So total of 12 hours on zoom. And then we broke down the other components of the delivery. We broke down 20 minutes per call that you’re spending prepping before you get on the call, so about four hours total over the course of 12 weeks. We’re calculating the time that you spend after the call creating notes and anything else that you send to the client, so an estimated 30 minutes on the back end of every call. So six hours there. And then the time spent an email support or Voxra support or whatever else it is that you offer to your client. We’ll estimate it at 20 or 20 minutes per week. So total four hours there over the course of 12 weeks. The total time spent in delivery for 12 weeks of one to one coaching with weekly calls is 26 hours. When we add all everything up. Now the formula that we used here, what we estimated was we’re charging, let’s say, $2,000 total for all 12 weeks of coaching And when we broke down the hourly rate, the hourly pay, before we take into consideration the cost of marketing and the cost of the sales process, is $77 per hour for the client delivery.
That means when you are charging $2,000 total for a 12 week one to one coaching experience. That includes 12 60 minute calls, the 20 minutes before the call and 30 minutes after the call, and then the 20 minutes of support each week, you’re averaging the pay of about $77 per hour. So how does this fit into the conversation of equitable pricing? If you have done the work from the part one, where you’re calculating what your owner’s pay needs to be, what your expenses are, the hours that you want to be working, and if you haven’t, go back and check that episode out, please. But if you’ve done that, then you’ll know what your bare minimum hourly wage needs to be in order for you to pay yourself an equitable salary to cover all of your living expenses and to make sure that you are taken care of, so you’re not burning yourself out and paying to have a business. So the other thing that we need to look at here is the $77 per hour rate is before taxes, so this is something that’s also really interesting, because they don’t think that a lot of folks talk about this right.
The price that you pay or the price that you’re charging is usually just some number that is pulled out of thin air And it tends to get pretty outlandish and pretty wild depending on what part of the internet you find yourself in. But when we’re talking about creating equitable pricing, these are the things that we want to look at. We want to look at and say, okay, how much time is actually going into delivery for you? And I want to emphasize and preface by saying whatever the number is, that we’re landing on here does not mean that’s what it has to be. This is what we’re looking at as the bare minimum in order for you to pay yourself an equitable salary, in order for the business to even be a healthy business And by that I mean you have healthy profit margins. Otherwise, the thing that we potentially run into, or what we risk end up doing, is putting ourselves in a position where we are working to only be bringing in money but barely covering our expenses and not having any real room to scale that, and that can be a really, really tricky and dangerous place to get yourself into.
So in this scenario again coming back to the one-to-one coaching your current hourly rate, before taxes, is $77 per hour And let’s say you’re doing a total of gosh. Let’s use an example here, 10 hours a week. So that’s $770 per week that you’re bringing in. With the 10 hours that you’re working per week, that’s all before taxes And that’s also before we take into consideration what you need to be earning. $770 per week might be enough to cover some folks’ expenses You’re looking at oh gosh, we’re going to have to get the calculator out here. All done folks, dun dun dun. Please skip this part if you’re ending this episode, because I don’t want this on there times four. Ok, so you’re looking at about $3,000 per month. If you’re working 10 hours per week and you’re charging $2,000 for those sessions, that means you essentially have 10 private one to one clients And that’s what you’re bringing home at the end of the month who are paying you each a total of $2,000 for the three month package. And again to emphasize, it’s three months, 12 weeks, $2,000 total.
Now, depending on what state you’re in and all of the logistics with countries and VAT tax VAT tax this piece is going to be a little bit different. So I’m going to just go off of California state income tax, because that’s the state of business that I reside in And if we’re looking at that, then I can calculate based off of the 30, let’s call it 30%. That would be going towards just my tax payments at the end of the month. So what I want to actually do here is I want to calculate, ok, what’s 30% of my current hourly rate and or what’s 30% of the total program cost, because that’s going to be the taxes that I need to add, that I’m going to be paying, which is the money I’m not even seeing. Does that make sense?
So when we’re looking at this, $2,000 is what we’re charging, but we’re only getting 70% of that after 30% is dedicated to tax. So if we want to keep the 2,000, then we have to add a 30% cost on top of that which is designated for taxes at the end of the year. And in this case, 30% of $2,000 is $600, which means the total cost of the program would need to be $2,600 for the client or for the customer in order for us to have an after tax pay hourly wage of $77 per hour. Otherwise, if we leave it at the current price point, then our hourly pay is actually closer to $54 an hour. So it’s 30% less.
And so then we look at them. We say, oh, snap, ok, well, how much do I actually need to be working then, because in that case, you go from let’s call that $540 per week. You go from $3,000 a month down to $2,100 a month of cash left over after you pay your taxes. So these are things that we really do need to start having more conversation around and understanding when it comes to our numbers and when it comes to our pricing. It should not just be a random number that you thought of because it sounds cool and you like saying it. That’s great, but does it actually equate to an equitable salary for you And does it make sense for the clients that you’re working with? So these are the factors that we want to look at. One, the length of the program and the time spent in delivery every week and every month, because, depending on how long the program is and how many hours you’re spending each week and each month, that’s going to dictate your ability to grow and scale a program, because the other thing that we have to look at is you running your business is not just you being in client delivery.
Anyone who has been in the online space for a certain period of time will know that the majority of your time is actually spent marketing and focusing your efforts on enrollment and sales And client delivery tends to be a smaller portion of what you actually get to do. Now, as you grow and as you scale, ideally you start to streamline your marketing and you can spend less time marketing and you built up a brand recognition, so it’s a little bit more equal. But in the earlier years you’re spending the majority of your time we’ll say upwards of 30% to 40%, if not more focused on marketing and focused on selling and enrolling and connecting with clients and networking. We can aim for close to half of your time in your business. So if you have 20 to 30 hours per week, and again considering if you have a day job and you’re just getting started or if you’ve been at this for years and you have 20 to 30 hours per week that you can dedicate to that, that means in reality you have maybe 10 to 15 hours that you can actually work with clients, because the other time is going to be spent marketing and doing sales and doing admin work and doing all of the other things that go into it. Which means if you only have 10 to 15 hours per week max to work with clients, then that means your maximum scalability, the largest you can scale to in this pricing model at the $2,000 per 12-week program per one-to-one client.
Let’s do the math here 2,000 divided by 3. So you’re making roughly $667 per month. And let’s multiply that by a total of 10 clients, that gives you roughly $667 per month. And again, this is all pre-tax. If we multiply that by 15, meaning you have 15 one-to-one clients you’re spending 15 hours per week on one-to-one sessions, plus everything else that you’re doing is roughly $10,000 per month. But you’d be capped out, you’d be maxed out and there’s no way that you’d really have time for doing anything else. And I highly doubt that most folks would want to be spending 15-plus hours a week doing all of the things that they need to be doing for their clients.
So, that being said, it’s important for us to take into consideration OK, is my offer even scalable? Does it actually make sense, with my pricing model, for me to be able to live my life the way that I want to live it? And if not, then I need to really sit down and understand what’s going into this. So if you’ve made it this far into the conversation, congratulations. This is probably going to be a longer episode. I apologize, but also, if you’re enjoying this, you’re welcome.
The first thing that we want to do and that I have all clients do, especially if you’re in our programs or if you work with our agency, is let’s get clear on what the hack your deliverables are and how much time you’re spending each week, each month, inside of each deliverable. We need to know the time that goes into delivering the product. Now let’s say you’re running something like a group program, which tends to be a little bit more leveraged, because, instead of doing one-to-one sessions with each client, you do one call with a group of clients. The caveat of the trade-off here is that you then have to record content to support and supplement, which is why this tends to be a secondary step after you’ve gotten to a certain place with your private clients, to where you’ve developed the core framework or a process for how you support them through a specific problem and get them to a specific result. So if we’re looking at it through that lens, what we want to see is OK, how scalable is this thing that I actually want to create and do?
What’s the max amount of clients that I can take on, based on how much time it takes me to deliver said product or service, and how many hours do I have available to actually be in client delivery mode, not considering what you would also be spending in marketing and sales. So the total hours you want to work per week in your business need to be divvied up between marketing, sales operations and client delivery. Ideally, you also have something in there for CEO of SAS, divisionary work and for finances. Most folks don’t take these things into consideration, so that’s why I bring them up. But again, you want to make sure that you’re not just saying like, oh, i want to spend 30 hours per week in my business, 30 hours of client delivery, because that’s not the reality. The reality is it’s probably closer to 15 hours per week of client delivery and then 15 hours per week spent marketing, sales, doing all of the other fun stuff. So you have to look at OK, well, how many clients can I actually take on if I only have 15 hours per week to deliver the service? And if that’s the case, then OK, well, how many clients can I work with? and then, what does my pricing need to be if I’m going to be capped out at this many hours per week with this many clients to where I can see where the ceiling is for my potential revenue, earnings and my income every single month, and if that isn’t congruent with what your bare minimum salary needs to be, then we need to have some very serious conversations about what your pricing is.
Now the other end of the spectrum that’s really interesting is we get in the conversation of overly-inflated pricing. So undercharging is definitely an epidemic in the industry, and so is overcharging. Now this is a very subjective conversation, because there is a very interesting niche, our community of folks who really do pride themselves on just charging outlandish amounts of money for services, and I’m not part of that community. So I have a tainted lens on that approach to business, and so I want to acknowledge that before we go into this conversation, that I have a very biased perspective and opinion when it comes to certain price points that we start to reach inside of the industry. And I want to preface that, because if you’re listening to this, and that’s something that you aspire to, take what I say with a grain of salt choose what lands, leave what doesn’t and get curious about it, because the other part of this conversation that we have to look at is the reality of the clients that you are supporting, the clients that you are working with, the clients who are going to be paying for your services. I say that because one part of the equation is you and making sure you’re paying yourself an equitable salary.
This is the issue for folks who are undercharging, which is why I bring it up. first, people who tend to chronically undercharge and underpriced their services are doing it because they want to make sure that it’s accessible and affordable for the people they want to support. But oftentimes they are sacrificing themselves in the process because they are not taking into consideration how they are going to be paying themselves, and so they fall into the pattern of undercharging and underpricing. Because they want to help. They want to help so bad, but now they can’t even help themselves and the business gets shut down. So these folks really need to focus on OK, what’s the bare minimum that I need to be paying myself so that I can actually live a good life and take care of my basic needs and not be on financial bankruptcy every single month or every single year? You want to start to develop a savings. You want to start to plan for retirement? These are conversations that we want to start to introduce into the day-to-day life of entrepreneurs.
Now, on the other end of the spectrum, when we’re looking at overinflation and overcharging, the conversation switches from what the owner needs to be paid per the salary And it’s more directed towards the individuals and who those folks are that they’re serving and they’re supporting. And how do we actually set them up for financial success so that they’re not coming in as a high-risk situation And by that I mean somebody is putting themselves in a high-risk financial situation where there’s a high probability that they may go into financial debt or financial bankruptcy from making this decision because there’s not a predictable ROI. Now, where does this whole conversation come from? This whole conversation comes from the preface of folks who want to charge upwards of $50,000 to $100,000 in month A month folks, a month on a monthly basis for things like coaching, things like hopping on a call with somebody and working with them through mental blocks or emotional pieces or whatever it is. Now again, there’s not a right way or a wrong way to do this, but I think it’s important that we have the conversation about the structure of it, the intention of it, the strategy behind it, because is it true that there are folks in the world who can afford to pay $20,000 plus per month for support from somebody to connect with them on a call via Zoom and have access to them on Voxer. For sure, yes, 100%, absolutely. There are people of that.
Now here’s a rule of thumb that I learned earlier on from one of my mentors, natalie McNeil, who is somebody that I have a lot of respect for in the industry, who I feel has done an amazing job when it comes to pricing and when it comes to equitable pricing. One of the rules that she taught me, or that she shared with me, is how she prices her programs and services in accordance to, yes, making sure she’s living in an equitable salary and wage, but also to make sure that the people who are purchasing are not spending more than 20% of their annual income on the service, and if they are, it may not be the best fit for them. They may actually be better fitted for one of the other programs or services. So this is an interesting conversation because if we look at them, we say, ok, well, let’s take that same rule and let’s say we have, we budget 20% of our total annual income after taxes. This is your profit for the year. And we say, ok, well, if I’m making $100,000 per year in my business, then I have roughly $20,000 per year to invest into coaching or mentorship or business support or whatever it is that comes down to. Let’s do the math on that. Hold on guys roughly $1,667 per month. So call it $1,500 per month that I can budget for mentorship or support. If somebody is charging $20,000 per month, that is my annual budget for one month of support. For some folks maybe that’s worth it to get a month of coaching at that rate, but for most folks it’s not going to be something that’s sustainable for them long term.
And here’s where this conversation gets really interesting And we start to cross into the intersection of trauma resolution, work and business development. Now, if you are somebody who has a history of financial instability, we’ll call it and you are choosing to make a very big, risky financial decision from an emotionally stimulated space, an emotionally aroused place, and by that I mean there’s a lot of emotion present. Essentially It doesn’t need to be any specific type of energy. So essentially you’re feeling very excited or very enticed. There’s a lot of emotion behind the decision And that emotion is driving what the decision is going to be, without a whole lot of a logic or rationale or reason behind it. And so you jump in and you say I’m going to make this really, really big investment in this service or this person or this program because I believe so badly.
This is where things can become potentially problematic, and it’s important for business owners to take this into consideration with their pricing and their sales processes. So when you’re looking at this, somebody’s coming in and they’re considering doing this. They sign up and they put everything they have and more and go into debt to try to pay for a programmer service And we’re not talking a little bit of debt, we’re talking a lot of debt. It is not necessarily our responsibility or decision as business owners to dictate how folks live their life and what decisions they make financially, but it is important to take into consideration the way that we price our services and programs, based in accordance to the folks in which we are meant to be supporting and serving, and how we make it available to them. We’re also paying ourselves an equitable salary. This is the balance.
This is the dance, because the challenge that we run into is when somebody makes a big financial commitment that puts them into financial debt, that person, be it the most mindset, powerful, bossing, whatever person there is, the reality is that person is going to have to face, on a month to month basis, the financial component and the financial intensity of needing to pay their bills, of needing to afford to live in the world that we live in, which means there’s going to be a heightened level of anxiety, a high level of adrenaline, a high level of cortisol, because that person’s system is going to be going into a high level of adrenaline and high level of adrenaline. It’s going to be a high arousal space to try to get things done, to try to make it possible, to try to make it happen and to try to achieve what they want to achieve financially. For some folks who have a natural tendency towards a fight response in their system or a hyper arousal in their system, this works really well for them. They enjoy being on the edge and having tons of adrenaline and tons of risk the risk takers. They tend to thrive in this space until they can no longer thrive, which tends to be when they burn out because they don’t have any emotional energy left and more will available because they’ve depleted it all.
In these cases, this tends to be where folks get into trouble financially, where they don’t have the capacity to push through anymore. They don’t have the capacity to continue to show up so much and will pass all of the parts of them that are feeling tired and exhausted and want to take a break and don’t believe in our doubting and our questioning and our feeling the fear, and the legitimate financial fear of the financial scarcity that’s real in their world right now And they go into a situation where they can’t pay what they’re trying to pay for. These are the situations that I think can become incredibly problematic And it’s hard to say that. It’s a hard fast rule of you know don’t do this or don’t do that, but I think it’s important to take into conversation the nuance of the situation, of the circumstance, and how we set things up accordingly. You know there’s been a I’ve had a lot of different opinions about ideal clients and sales calls and applications and all of the fun things over the years, but I think at this point in time it’s an interesting thing to take into consideration what the purpose is behind these, and we talked about this a little bit in the last episode.
But when we think about your ideal client, your ideal client, part of that is making sure that you’re actually pricing your services in a way that’s going to be accessible for them. So if you’re target demographic let’s say you’re somebody like a business coach right? If you’re target demographic is helping people start their business right, launch their business. Most folks who are just getting started are not generating tons and tons of money every single month and every single year. Now, this doesn’t mean you just charge pennies for what you do, but it means you price your services and your programs accordingly to be within range of what is financially possible for that person, right?
So somebody who’s making let’s say they have another job or whatever it is and they’re doing $60,000 to $70,000 per year and they want to join a program or service that you have Like, we did the math on this right? A person who’s generating $100,000 per year has roughly $20,000 per year that they can put towards support. For somebody who’s generating, let’s say, $70,000 per year, they have $14,000 per year if we’re going off of that 20% rule that they can put towards a service or a support in their business. Right, because they have another job that’s financially supporting them, that person might be able to invest in like a $6,000 mastermind or an $8,000 mastermind, right? So these things are possible for these folks. But if you’re working with people who maybe don’t have the financial means for that, maybe they’re working a job that’s $30,000 per year that they’re making per month or, sorry, per year, within their current salary. A 20% of $30,000 is $6,000 per year. So again you can start to see that there is possibility for these types of folks, the modern day individual who is close to the average income in the US, to be able to afford something within the $6,000 to $10,000 price range for high levels of porn coaching. So we’re not saying don’t do that, it’s bad, it’s wrong. But what we do want to take into consideration is if somebody is going to be investing $6,000 to $10,000 in a service, being really clear about the ROI so that we’re not leaving them worse off than when they came.
Now there’s a conversation here, again very nuanced. Of course, we cannot control and predict client results every single time Absolutely, i hear that and I’m with you on that. But what we can control is our ability to create a clear and concise container or program or service that is optimally refined again and again and again to take into consideration the challenges, the points of conflict, the additional needs that our clients have when they come to work with us. We can be clear and direct about how we operate, how we work, who we work best with, what we are and are not aware of where the boundaries are of the container or the program or the service that we offer and what is and is not within our scope of practice. And this is important because if you have folks coming in who have a lot of trauma or a lot of potential pieces of lack of privilege we’re talking about ableism, we’re talking about neurodivergency, different pieces that might directly impact and influence how they’re able to take in information then your program may or may not be the right fit for them and they may actually need somebody who can support them in a more tailored way that supports their learning style, that supports where they’re coming from.
And this is again, it’s a really fine line, but we have to take these things into consideration, especially as we go to scale. We have to be clear with our audience and with our marketing. Is this actually suited for folks that have neurodivergencies, neurodivergencies or whatever however you want to refer to it. Is this program suitable for somebody who may have recently experienced a lot of trauma? This is where the application process is really important for our programs and services to make sure that it’s actually going to be a good fit for somebody. And ideally you have all of this outlined on the bare minimum of Google Doc that you share and you say this is how it works, this is who it’s for, and folks can filter themselves out based off of that information.
But if we’re very vague about what we’re providing and what we’re doing and we’re not being very transparent about the contents of the service or program or offer, about the deliverables that are included, about the way in which the services and program is delivered, then it can be really hard for folks to try to understand and try to decide if it makes the right sense for them to get into it. So, clarity on your offers, clarity on the deliverables, clarity on who this person is that you want to support and clarity around what the boundaries are, who this program might not be for And again, this is more than just saying, oh, it’s not for the person who’s not committed or has a victim mindset. That’s cool, but also let’s have more valid conversations about helping folks discern if something is the right fit for them. Like, hey, this program may not be the best fit for somebody who’s experienced a lot of trauma and is still working through a lot of symptoms like deep anxiety or feeling a lot of overwhelm, we would recommend going through a personal embodiment practice or some other type of service first. So having actual caveats like that would be more empowering for you and for the client, so that you’re not having people who come into your programs expecting it to be something that it’s not, but also you’re able to support people who are the best fit for what it is that you’re doing. This is a conversation of exclusive inclusivity, something that one of my other mentors, trudy Lebron, talks about a lot of. How do we create an inclusive space that’s exclusively inclusive And by that we mean all of the people who are in there really feel like they’re meant to be in there, because we’ve created clear boundaries about who this space is actually for. So, that being said, you’ve got the clarity around the program. You’ve got the clarity around the pricing.
The last bit of this conversation is going to be about payment plans and what makes sense for payment plans. Now, this is a very interesting conversation. One of the schools of thought that was brought up recently is if somebody can’t afford something right away, then does it actually make sense to offer them a payment plan, and this is interesting because I find that payment plans can actually be incredibly supportive and helpful for folks who don’t have access to a large amount of savings, and the investment could be something that could be very supportive. Now, where do we draw the line between a payment plan being something that makes sense for somebody versus a payment plan being something that could be potentially predatory? Now, predatory practices with payment plans is when we start to charge absurd amounts of interest And when we look at this.
Obviously, as a business owner, you do need to calculate for risk. By putting somebody on a payment plan, you are taking a risk and saying, ok, i’m willing to trust that you’re going to pay this amount over x amount of months or years And the person is agreeing to that. So you’re taking a risk. So you do want to calculate that into there. But we want to be very intentional about how much we’re actually charging for that risk, because what we see in the industry is folks charging 20%, 30%, 40% on interest for somebody who needs a payment plan, for somebody who doesn’t have the cash or the credit score to be able to get a credit card or a loan or whatever it is, to pay it in full, and so I do believe personally that it is really really important to offer that and have that be an option for folks, and I also believe that it’s important to figure out what the percentage is that makes sense for the payment plan, to where they are able to pay it but they’re not also being taxed a poor tax because they can’t pay in full. So this is another part that’s important with the conversation. Now, if you look at credit cards, credit cards average anywhere between if you’re lucky 3% up to 20%, 30% pretty wild numbers. So you can look at that to start to give you a range for where you can put your payment plan pricing, because, again, you are taking a risk but you also want to make sure that you are pricing equitably.
The other part of this conversation is payment plan length and extended payment plans. So this really depends on the product or the service. I think if something is a done for you digital sorry, not done for you a digital product that’s essentially delivered right, it’s an audio bit or it’s a logo, that’s just they purchase it and they get it, things like that it may not make sense to have a payment plan because they get it already when it gets delivered. But things like live, mentorship, right or coaching or an ongoing program make more sense for clients to have access to extended payment plans where they get to pay over an extended period of time. Now what you do with this and how you do it is totally up to you. The typical rule of thumb in the industry tends to be that you want people to be done with their payments before the program finishes. So if you have a six month program and they sign up six months before the program starts, you can do upwards to a 12 month program payment plan for them to be able to pay the entire balance by the time the program finishes. Now, obviously, as the program gets closer to starting, the payment plan term would be shorter and shorter, so you can offer more extended payment plans to folks when they enroll in services early on.
The other part of the conversation is figuring out what kind of payment plans make sense for the type of people that you’re bringing into your world. So let’s take that example of the $30,000 per year person who has a $6,000 budget. That means on a monthly basis, they have about $500 per month over the course of a year that they could invest. Now, if your program is six months long, they have the option to enroll early and start making payments early, or they have the option to have higher monthly payments over a shorter period of time. So, again, i do think payment plans and installment plans can be very supportive for folks, and you can also have the conversation about extended payment plans.
I personally have uses and I’ve paid these balances off over the course of the time. But again, we do want to take into consideration the risk that’s involved, because the longer the payment plan, the higher probability of somebody stopping the payment plan becomes. So this really gets to be a personal decision that you get to make in your business. But I hope that this conversation today and this episode has really started to shed some light and empower you on how you operate your business, on how to make decisions about your pricing, about payment plans, about the way that you structure your offers, so that you can start to go about things in a more confident and clear way.
All that being said, thank you so much for staying along. This is a much longer episode, so I appreciate you taking the time. If you have questions, feel free to always reach out at hay at thesacredco, and our team would be happy to answer And if you enjoyed this episode, it would be the absolute world to us if you were to leave a review and you were to provide feedback on any of your favorite podcast listeners. It makes a big, big difference whether you know it or not, and if you have somebody who you feel would benefit from this episode, please share it out with them. Let them hear it, let them know, and we look forward to seeing you all in the next episode.