How should I structure my prices to ensure that my costs are covered?

asian-personal-trainer-with-woman-in-fitness-gymKnowing how to price your personal training service is a question that most new trainers entering the industry ask. The challenge is to not set your prices so high that you don’t attract any clients, but also not too low so you aren’t devaluing your service. There are also several other important factors to consider such as, tax, leave and super. These all need to be included in your pricing model, especially if you are self-employed; if you’re not working, then you’re not earning money. The fitness industry can be fickle at times; when its good it’s great but when times are economically tough, the first thing to go are the things that people perceive as luxury items or things they believe they can do themselves; personal training is often at the top of this list. Your fee structure should go some way to covering you for those downtimes.

First things first. Research. Call local gyms and personal training studios and see what they are charging for the same services you are planning to offer. This gives you an ideal starting point. Next, determine what you need and want to earn on an annual basis; is it 60, 70 or even 80 thousand per year. It’s a good idea to calculate this figure as a net figure (after tax) so you then know what percentage you need to add on to cover all of your on-costs.

Once you know how much money you need to earn to sustain the lifestyle that you want, research your fee options. Will you charge your clients per session, week, month or program? Determining what your payment policy will be in advance will help with future cash flow. Once you have your payment policy worked out, you can then calculate how many sessions or hours you need to work per week to meet your desired income.

Use the simple formula below to assist in this process. (These figures are only an example.)
Desired net Income (after tax): $60,000
Plus 30 %( for on costs including super and taxes): $18,000
Total Annual income: $78,000
Per Session Fee: Based on 30 X 1 hour sessions per weeks ($78 000/52= $1500/30hours work= $50 per session
Number of Sessions per Year: 1560
Monthly Sessions: 130
Average Daily Sessions: 6.5 (based on 5 days per week)

Look closely at that final number. Can you physically and emotionally do that many sessions in a day? What about the time you need for administrative and marketing work?

As a sole trader you are in the unique position to be able to shift with the industry, so be prepared to change things up and be diversify your service delivery and cost structures. For more information, visit the Australian Government’s MoneySmart website.