Coaching quotes can differ dramatically because advisers price for potential profit, client fit, capacity, and the company’s ability to change now.
EXPERT OPINION BY BRUCE ECKFELDT, INC. 5000 CEO AND STRATEGIC BUSINESS COACH @BECKFELDT
I have been on both sides of the coaching conversation. Years ago, I sat across from an adviser, heard a number, and had no way to judge it. These days, I am usually the one saying the number.
Founders shopping for a coach collect two or three quotes and find a spread they cannot explain: the same scope, with numbers that differ by five or 10 times. The explanation on offer is that the market has tiers and a higher price buys a better coach. It is a tidy explanation that happens to flatter whoever quoted the highest price.
Here is what actually determines the number, from the chair where it gets set.
1. Pricing starts with your P&L.
When I price an engagement, I start with the company’s revenue and profit, then work out what is realistic over the next one to three years. I want the work to generate at least 5 to 10 times my fee in additional profit. If I cannot build that case, I have a reason to decline the engagement.
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The number is a forecast rather than a measurement. The return figures this industry advertises have the same problem in reverse because they come from buyers estimating their gains after the fact.
You can test the forecast, too. Ask the coach to walk you through it. I have watched founders study what hitting that number would require of them and decide they did not want to pursue it, which is worth learning before writing a check. Others look at the same math and expand the scope.
2. The fee is only the starting point.
Once a coach can justify a fee, other questions become more important. I weigh whether I can make an impact, whether the company is positioned to change, whether the team is coachable, whether the industry has room to scale, whether the work conflicts with other clients, and whether I am going to enjoy it.
Source: www.inc.com
