Know Your Worth

Okay, so we're going to talk about everyone's favorite topic, money, finances. I want to start by saying really simply, you determine your own worth. I can say it again. You determine what you're worth. If when you got into teaching, you decided your private session rate, or if you teach group classes independently and you copied someone else's rates, copying someone else's rates sounds good because you feel like you're positioning within a geography of like, Oh well everyone teaches and they charge X in this neighborhood, so I'll discharge that. Also, problem is that you're then like everybody else and if you're trying to make a dent in this industry and get paid what you're worth, if you're saying that you're like everyone else, well then why would anyone choose you? Does that make sense? Right. So if you're setting up your pricing just to be like everybody, there's a story that we tell about price. Some people aspire to buy things because of the story. It tells them buy a Maserati and not because I want to be seen as like a really thrifty person. That story doesn't mesh.

So what you actually set out for your price informs the story that clients are telling themselves when they actually hire you as their trainer, their teacher, their instructor. So one thing to think about when you're setting your price, obviously what you need and we'll get into that, but what story does your rate tell? Maybe it's for a clientele that you really love to work with and so you need to make sure that it's workable for them. I get that makes total sense. But there is some thought to do around what the story is in terms of how your clients are perceiving it for their lives. Maybe they want the cheapest person and if you set yourselves up as the affordable option, your business will boom and that could work for you.

Or maybe you really only have clients that want to have the best and they want to know they're going to spend $300 whatever the rate may be, to be like, Oh, I had this amazing person because that's the story that they tell themselves in their daily life. So ask me for what you're worth. My mistake from a long time ago, not to date myself, was not asking for what I was worth earlier from a studio that I worked at. Let me tell you a quick little story. So there were four teachers at this studio, all friends, all amazing people, and we had a glass of wine probably on a Friday night. And we started talking. We didn't really get a chance to hang out socially in that studio.

And the talk came around to what we were actually making per session as employees of the studio. And we all were like, Oh, how much do you make? And Oh, that's, wait, wait, what? You asked for a raise? And one person of the four had actually asked for a raise and the rest were kind of shocked. And three of them had been there longer than this person. And it wasn't a huge raise. It was like maybe five or 10% but it was something. And they were kind of surprised that the studio owner without any questions like, yeah, sure. Like that's fine. No one else had even bothered to ask. So we all kind of got a little like, wow, they'll let you know.

All sorts of stories around it. In gossip, we were sort of angry that we hadn't thought of it earlier and kind of kicking ourselves for not doing it. But then an interesting thing happened the next week I go for my usual start time and one of the people who had not asked for the raise is standing outside the studio and I'm like, Hey, how's it going? I just quit. Like, what? What do you, what do you mean? Like, well, no, I was so inspired from that chat we had about like actually asking for your words. I'm like, Hey, I'm not making what I deserve enough of this and instead of just asking for a raise, they decided I'm moving on. I was flabbergasted. But kudos to that person for making the bold choice for the rest of us. It might be a little more strategic just to keep your job, but to actually just think about what your real value is, understand it.

Try to harness that energy to say, Hey, what are you actually worth? Ask for it. My personal version of asking for what I was worth actually came from a date that I was on. So I'm not gonna tell you dating stories. What I want to share is that I was with this person and talking about you know the industry and they do not know from plots at all. It's like, Oh, how much do you charge? And I told them, and we're talking a long time ago in New York city, I was charging maybe $80 for a private session and they were really surprised because they thought that I was good and they heard about some of my clients, whatever. And like that's all. And then your that from personal trainers who made way more money, they were really surprised at how little I was charging.

And it was a real lesson for me on what I ascribed to dancer or artist mentality. It like I love what I do. That's enough. Like the pain and suffering is what we know and affirms that I'm really putting the blood, sweat and tears. It'd be nice to make a living off of it, but you know, someday. So when we had talks about this, like you need to like actually state your own value. Like what do you mean? He's like, how much do you think you're worth? I'm like, well, I don't know. Like, like why don't you charge $100? I'm like, no, no, no, I can never do that. There was no way that my clients would pay that. They're all, I gave them all the reasons and all the like logistics of why these clients can never afford that and I was good ludology lose all my clients. Like, well why don't you just do it for the next new person?

Like maybe I was literally quaking in my boots. I was nervous, a referral came my way and I was like, Oh, this is kind of a chance. Like this is my moment to try to ask for like $100 a session, sweating palms or like clammy. So the client comes in and we do our intake. We didn't even talk price again, wrong, wrong. I was set up there at the end of the session. It's like, Oh, so how much is it for like 10 and I'm like, uh, I gotta do this.

So it's a 2000 for 10 and I'm like waiting for the earth to fall and shatter like, OK, cool. Rotor check handed over to me had done. All of a sudden I'm worth the a hundred bucks a session. But that happened. It's that simple. So stating what you're actually worth, owning it, taking that leap to just push it. I'm not saying you have to raise your rates, but the attitude of understanding that you decide your value. Really important for this nugget of content, knowing your numbers. So we say it a lot in the business world, in this industry. I think in particular, knowing it the way that I do, you've got to know your numbers. There's a trainer who I will name leave nameless in New York who's a brilliant trainer, and I talked to them recently.

They had no idea how many sessions they did last week. Like how do you know how much you're making? What's your goal? Like how are you paying bills? They were so good at their practice. They're relatively busy, but they just didn't have time to really go back through their calendar and track everything and I was shocked. It's basic. You're running a practice. If you're teaching as an employee, whatever it is, you got to track and know your actual numbers.

If you're a studio owner with multiple studios, probably more important whether you do it yourself, whether you ask for help, it doesn't really matter as long as somebody is accountable to it. It's crucial. It is like a nonstarter for me in terms of working with people, but I see that many of us don't do it. So I want you to take your time to get to know your numbers. One thing I'm going to help you with today is what I call your actual rate. So a lot of us, and I did it myself, run between four or five studios to see clients in different neighborhoods or go teach between different group classes and then a private and then an in home and then back to another studio, whatever the case may be.

There's a lot of commute hours added into that. So we're going to take a simple formula to account for your clients, your commute, and then understand what your actual rate is. So here's the simple math that I want you to literally write down. First off, how many clients are you actually seeing in a typical week? So studio number one, write down the number of sessions you did last week or an average week, studio number two, or you're in homes. Just add up the total number of client hours.

Second, I want you to do a very simple audit of your actual commute. So from home to get to studio number one or group class or in-home, whatever it is, your first commute during the day, how much time does it take on average in New York? Don't get me started about the MTA these days, but what's your typical commute from home to your first location? If you have a second location, add in those hours or minutes, whatever it is, go through your entire day. And if you're sitting on a train or in a car, in traffic account for a rough average of what the total communities, and then come up with a number for the entire week, total commutes. Next, add up the first two for total number of hours.

So for example, if my work commute from home to work is one hour a day, and I teach five days a week, it's five hours and I see 10 clients. So that just be a simple 15 right? So whatever your total is, and it might be between different studios, add your total number, so you have a total number of work hours. Next up, what's your rate? So you might need to do a little bit of math to figure out your one studios pays you this or you're charging that, or you have an in home, but do a quick average of total number number of clients and what your rate is for each of those individual sessions. So on an average number for one session, not for all the different variables, what's your average hourly rate? One number. So for example, it might be that it's 100 bucks, maybe teach some people for 50 maybe some in home at one 50 so I'm going to average out to be 100 is my hourly rate.

Now take your total work hours. That number of clients plus commute, divide it equals what's your actual rate surprised, does it feel good? Is it like, Oh my God, I'm making half as much as I thought. Obviously if you have an extensive commute and you're seeing only a minimal number of clients because you're not seeing them back to back to back and then you have free time. If you're seeing one client, then you commute and then another client, then you have two hours of commute. Then there is a gap because the weird part of the day and another that's a long Workday. We're probably not getting as much done as you might think and then your actual rate has gotten reduced by sometimes up to two thirds. There's no judgment here. The idea is simply for you to have a really clear sense of what the number is so you can look at what you're actually making. Okay.

Next we're simply going to look at a little bit of budgeting, no big details. There's tons of tools on how you can budget better, but I just want to call it out that understanding what your numbers are means having a budget in place. It could be as simple as looking backwards to what you actually spent last month, last year, what your livelihood is, what does it cost for where you live. If you just move, like just get a rough sketch of your actual budget. I will admit I made tons of mistakes financially. I kind of overstretched and did too much and trying to get a business off the ground and it left me way behind in debt with credit cards, all sorts of things and the things I wish I had known earlier to put in place.

I would have been more financially responsible. If that's not your issue. Cool. Like fast forward a little bit. We'll get to some other interesting stuff, but it's also really good reminders for all of us. There are basic principles that we can practice in terms of budgeting and forecasting, which we'll get to your next that help reduce the stress. You can be present for the work that you love to do for forecasting. I want to offer you two ways to think about it.

Pretty much any successful business longterm has forecasts and some people general sense like it's just enough to know your P and L. but I would say that forecasting plays a critical role in building a successful business for the long haul. And again, if you're not in this for the long haul, I'm amazed you're still watching. But if those of you that are in this forecasting two ways, one suggestion look backwards. So really simply, if you look to the year that you had last year, write down a list of uh, input and output. What money did you make? What was coming in, what were your expenses for the year? Either write them all out or you can download them. Whatever your technology skills are, get a really clear sense on a monthly basis what your budget is, what you spent, and then look at what do you think the reality is going forward off of your actual last month or a year. So if it was last month, what did you actually make? Would you actually spend, do you think next month's gonna be the same?

That's a very simple bare bones forecast or you want to give it a more complicated pull out to the entire year. You have a sense of where things ebb and flow through your year. You might have a really seasonal business, maybe you're really consistent, but look at the entire picture of the year. Look at all your categories for profit or revenue. Look at all your income and expense and then chart it through the entire year to see what you think is realistic.

There's lots of variables that will take it up and down, but you know your practice best and if you think forward to what you want to make, it's a different approach. So thinking forward, you want to look to what do you want to make bare bones, top level, what's your big goal, how much money would feel amazing to you? And then you have a sense of where you've come from, what's the bridge between those two? And as you start to work backwards from that idea of a forecast, you're going to look at some priority setting of things you might be able to do to bridge the gap and get some really clear calculus done of, well, there's such a huge chasm. It may not happen in the next year. That's fine. But getting very clear about how you're forecasting either from prior reality or on goal setting and hoping to see where you can get, we'll give you some kind of a path and then structure going forward. One more note on forecasts.

I want you to be clear with whichever way you go about it, either passed to kind of just average out or forward goals to include contingencies. One of the biggest mistakes that happens is we sort of over, um, assume that people are gonna show up all the time. We all know people get sick. I mean all people take vacations. August can be really slow for example. But think about those factors, big picture that actually reduce your assumptions. So if I think about, Oh, I have one client who comes once a week and they're gonna come for 52 weeks, well are they really gonna come 52 times? Or do you want to run your math in the fact that they might be coming for 46 times cause they might get sick or they have a school thing with their kids where they can't see their session and they might lose a session or they go on vacation. So try to get clear on what those contingencies are. So as you set up your rates and your structure and your expenses and your taxes, you have some margin of error, maybe plus or minus 10% of a contingency in place. So you know, if you have people kind of drop off, you've planned for it.

If you have people who bump up, great, then you have a little bit extra. But make sure you bake in contingencies from the get go. We've talked about forecast budgets, rates, some general ideas for to help and especially that commute analysis, which I hope was either reality check or some encouragement. So here's your homework. Number one, make sure you have a budget please. I beg you. Just download it. Whatever you need to do, ask someone for help.

Get a budget in place. You have, again, real feedback. This is not about being in your feelings. You're going to have feelings about it one way or the other. That's fine. Put those over here for now. Get a budget in place to create a forecast.

It can be really simple. Again, you can look at last month and say, you know, last month was kind of average, so I'm just going to run that for the year. I know by the end of the year this is kind of what I'm going to be doing. Once you have your forecast in place, set some targets and goals through to the end of the year. So it depends on when you're watching this, but I want you to be really specific, actionable items, time-based. You know when you want to accomplish these things by and realistic going on a moon trip, like maybe that's not in your near term future set some things that you can actually do that are a little bit of a stretch the same way that you think about working with clients to progress them.

So it'd be really clear about what some goals are that would change your financial picture. Again, the umbrella here isn't about, Hey, I want to go teach on the thing like, no, no. What are your financial goals? What are the three things that are simple, measurable, actionable, that would help change your financial picture? It might be hiring an accountant, maybe it's checking your budget once a month. It can be really easy. They could be really complicated. Write them down right now. So that's your homework. Finance, pretty simple when it comes down to it, but I want you to do the real work again, rolling your sleeves up to get in the deep end of your own practice to understand what's actually happening. Put your feelings aside. Look at the numbers, know them. Get clear on what your actual rate is.

Get your budget in place. Start to look at your forecast so you can prepare for your own success and know your own value. Thank you for watching.