American Council on Exercise by American Council on Exercise
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Proper pricing supports your livelihood, should offset your financial and emotional investment in your work, and helps keep participants engaged and accountable. Group fitness instructors notoriously undervalue their product. Rest assured, it is possible to remain a compassionate and caring exercise professional with the desire to change lives while also charging what you are worth. 

To determine appropriate pricing, work through the steps outlined below. As you do, be patient with the process, as it may be necessary to work back and forth between steps in order to identify your final pricing strategy. 

STEP 1: Identify Annual Financial Goals 

When setting your initial financial goal, it is important to recognize the difference between revenue and profit:

Revenue – total amount of income earned from selling your products and services 

Profit – total revenue earned minus expenses incurred from running your business

The goal you want to identify, first, is how much you want to “make” each year—that is, your profit. 

While you may not need to generate significant profit, it is still important to start with this number. “Even a mission needs a margin” is a famous saying to remind us that even if we view our work as completely philanthropic, you run the risk of not being able to continue to pursue that mission if you do not take into account the financial and emotional “costs” of the work.  

STEP 2: Estimate Costs

Here, we will estimate how much it will cost to run your business to help set pricing that, at minimum, generates enough revenue to cover your financial and emotional investment and leave you with something left over.   

You will need to invest money, time and energy into your group fitness business. Therefore, when determining your pricing strategy, it’s important you carefully calculate the expenses you will incur, as well as the effort it will take to provide products and services to clients.

Begin with estimating your expenses, which are those fees (one-time or recurring) you will incur to create, market, sell and deliver services to clients. Once you’re up and running, you’ll have to carefully track expenses and adjust your pricing to accommodate actual numbers.

Compile a list of expenses you anticipate, including professional development (e.g., certification, renewal, specialty certifications and continuing education), production tools (e.g., music, tablet or handheld device, microphone, lights, camera and software), exercise equipment (e.g., resistance bands, free weights and stability balls), facility costs (e.g., rent, utilities and internet), sales and marketing resources (e.g., software and ad spending) and legal and business needs (e.g., insurance and an accountant). Then, pad this estimate by at least 10% to accommodate unforeseen expenses.

Beyond expenses, you’ll also want to quantify your time and energy. Far more goes into a class than the hour you are teaching. Consider how many hours it will take you to create, market, sell and teach each class. Then, assign yourself an hourly “rate” and multiply by the estimated hours to calculate this additional “cost.” Add this to total expenses from above. 

STEP 3: Create Pricing Models

Next, you’ll begin to experiment with pricing models: 

  • Start by listing the types of products and services you will sell and then estimate how many people you will be able to service with your products annually. If it helps, start by thinking about how many you could provide or sell in one week, multiply by four to estimate a month, and then multiply by 12 to find an annual number.

Example: If you are offering in-person classes 5 times a week and estimate 5 people in each class, that would be 25 participants per week. 25 x 4 weeks is 100 students per month. Multiply monthly x 12 for annual which would be 1200.

 

  • Then, choose a price that feels appropriate for the given product. Conducting market research can help you find a starting place.

    Example: in-person class = $10

 

  • Next, multiply the quantity you will sell by the price you will charge which gives you estimated revenue.

    Example: $10/class x 1200 participants = $12,000 (gross revenue)

 

  • Finally, subtract your anticipated costs (Step 2) from the revenue, and see how the net (what’s left) compares to the profit goal you set in Step 1. If the final amount doesn’t align with your initial goal, start back at the top. Reassess your costs, the quantity you anticipate selling and your pricing strategy until the final number is closer to the goal that you initially set.

Example: $12,000  - $15,000 (costs from Step 2) = ($-3,000). You would need to adjust number of offerings, estimate of participants, and/or the pricing to at least break even.

*One additional consideration will be taxes; both sales and self-employment tax. You’ll want to consult with an attorney regarding sales tax and self-employment tax implications in your state. When reviewing your pricing strategy, you will want to estimate the amount you’ll need to set aside for taxes and subtract that number from your revenue generation estimations to ensure you are reaching the financial goals you have set for yourself. 

Even though getting rich and famous may not have been the motivation that brought you to teaching fitness and changing lives, it is important to understand that the only way to ensure you can have longevity in this industry is for you to appropriately charge for your services. Don’t be afraid to embrace your entrepreneurial spirit and take the reins of determining the worth of the valuable fitness experiences you have to contribute. Never underestimate what you have to offer and how much more motivated you will stay knowing you’re able to change lives while having a sustainable business that also supports your long-term personal and financial goals.