Proper pricing supports your livelihood, should offset your financial and emotional investment in your work, and helps keep clients engaged and accountable. Personal trainers sometimes undervalue their work, as they tend to overlook or underestimate the time spent outside training sessions. Rest assured, it is possible to remain a compassionate and caring personal trainer 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 Goal
Fitness could be your career or a part-time job to earn extra income. Regardless of your situation, setting a financial goal is the first step of creating a business plan. When setting your financial goal, it important to recognize the difference between revenue and profit:
Revenue is the amount of money you generate from selling services and/or products.
Profit is the amount left over once you subtract expenses you pay to operate your business from the revenue. This is the amount of money that you actually earn.
The goal you want to identify is how much you want to “make” each year—that is, your profit.
Step 2: Estimate Expenses
Identifying how much it will cost to run your business will help you to determine how much to charge per training session so that you can reach your financial goal.
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, which may include some or all of the following: professional development (e.g., certification, renewal, specialty certifications and continuing education), production tools (e.g., tablet or handheld device, 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.
Step 3: Calculate How Much to Charge Per Billable Hour
Once you have calculated how much money you want to earn and have identified basic expenses, you need to determine how much money you will need to charge per hour with clients to earn the profit you desire.
To calculate how much to charge per billable hour, start with your annual profit goal (from step 1) and divide by 12 to determine your monthly profit goal.
- Example: $84,000 per year / 12 = $7,000 per month
Then, use the estimated expenses (from step 2) to determine your average monthly ‘costs’. Add the monthly costs to the profit goal to determine how much money you will have to earn each month (in total revenue, not profit).
- Example: $7,000 (monthly profit goal) + $1,100 (est monthly costs) = $8,100
Next, you’ll need to determine the number of billable hours you’ll have each month. Start by determining how many hours per week you would like to work and subtract 10 to 15% from the total number. The 10 to 15% buffer is to account for non-revenue-generating functions like marketing, scheduling, program design and travel.
- Example: If you plan to work full-time, you would multiply 40 hours per week by 15% and subtract that number from 40 to determine pricing based on 34 billable hours per week. Then, multiple 34 x 4 = 136 for total number of billable hours per month.
To determine how much you need to charge per contact hour to meet your annual profit goal, divide monthly revenue by the number of monthly billable hours.
- Example: $8,100 / 136 = $59.55/hour (round up to $60.00/hour)*
This personal trainer could expect to generate approximately $97,200 per year ($8,100 x 12) in revenue—for a profit of approximately $84,000—by charging an average of $60.00 per billable hour.
*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.
This exercise is designed to determine the amount of money you need to generate per hour to hit your annual profit goal. If you will be doing one-on-one sessions, this is the price of a session. However, it is possible to earn more per hour by providing small-group training sessions or creating programs that can be sold to clients to perform outside of your time together. Determining the required average hourly rate will help you price these other services and figure out the best mix of products for you!
Remember, you are a professional and deserve to be compensated for your work. Your pricing must account for the time you spend marketing, communicating with clients, and designing programs. While it may be tempting to offer discounts or complimentary training sessions, doing so can lower the perceived value of your services. On the other hand, once you start charging a competitive rate, it will be up to you to deliver a premium quality of service. The good news is that if you establish the expectations at the beginning of the business relationship, and then deliver on those expectations, you can expect to have a long, rewarding and lucrative career.