My tips on how to formulate a price for your workshop
Pricing your services as an entrepreneur can be really tough. I cannot tell you what is the best price for your services, because ultimately it is the matter your customers will decide for you. But I can give you some tips based on my experiences to help you figure out your pricing range.
One thing I can recommend you is: differentiate. Differentiating your offer and the value in it is the most important thing in getting a decent price for your time and knowledge. The worst game to get into is a price war. There are only losers in that game.
Some rules of thumb
The basic rule of business is: what comes in must be more than what goes out.
You can charge as much as the customers are willing to pay. And the willingness to pay is related to how they value you as an expert. If you are a nobody, you will be a huge liability for their credibility. They will not be willing to pay a lot, if anything. If you are a known practitioner, you have good references, people recommend you and your work can be seen or read or listened to over the internet – well that significantly lowers the customer risk and they are more likely to pay what you ask for.
Another rule of thumb: I’d also love a Ferrari, but I’m aware of my current shortcomings in the finance department to purchase one. I’m not going to get a Ferrari for the price of a Volkswagen no matter how much I go and peg for one. There’s no need for you to sell your Ferrari services for the price of a Volkswagen service. If someone cannot afford to pay, then they need to settle for someone else’s services. Same goes vice versa.
And finally: If the customer budget is less than your price, do not give a discount. That will make the customer think you tried to fool them into paying more than it was worth. They will get very upset! You lower your price to meet the customer budget by modifying your offer. In other words, you include less.
What all goes into a price
- The time spent on the workshop (is it 4 hours, 5 hours, 8 hours?)
- The travel time required (if the rest of my day goes into traveling for the workshop, I’m not able to sell that time to anyone else)
- The time spent in putting the workshop together
- The presentation material
- Planning the group activities (what, how, how much time can be spent on each including discussion)
- Planning the schedule for the workshop (I hate workshops that are poorly managed and lack efficient time spent)
- Printing any handouts etc
- The time spent on familiarizing myself with the material customer has provided me with
- The time spent on documenting the outcome after the workshop (this I sometimes bill as a separate service)
- My experience and skills in regards to the topic and the way I lead the workshops and pursue to inspire the participants. I’ve studied, practiced and learned for 14 years now. It’s worth something.
As you can see, it’s not just about the actual workshop. And it’s not also the hours you spend on putting the workshop together. You must value your skills, experience and wisdom in relation to the topic. If you have something special, it’s going to be worth more because there are less competition.
I pay a lot of attention to being able to use the same framework of a service for as many customers as possible. I call this productizing my services. It makes my services more scalable and is therefore better for the business. If you think how much time is spent on putting together a workshop, you realize you will never have ROI on your workshop unless you build a framework you can easily copy for a numerous of occasions.
My advice is to only offer workshops or trainings on topics that you can resell. But do pay attention to the value add. Many of my customers are willing to pay more when the training or workshop is tailored for their specific situation, to their unique need. There’s a difference between a bulk service and a solid framework that can be tailored for each of your customers.
Be specific in your service offer
I’ve noticed some people tend not to plan what the offer entails when they write a service offer for the customer. They just throw some ideas on the offer and stamp a price over it. And when the time comes to deliver, they realize they need to spend a lot more on putting the service together they originally thought of and now the price is too low. But you cannot raise the price as deal is the deal, so you end up with an unprofitable job.
I conceptualize the content and the outcome of the workshop when I make the offer. I literally open another word document and write my notes on the skeleton of an agenda I put on the actual offer for the customer. I want to make sure I have it covered and I am able to give a rightful price for the content. And when the customer makes the purchase decision and we set a date for the service, it is so much easier then to fill in the blanks.
In the order document I use bullet points and subheadings to give customer enough detail about the content.
Pricing my workshop
So let’s wrap this up:
I used Toggl app to calculate how much actual time went into tailoring my knowledge into a 6 hour workshop for a customer:
- 9 h 8 minutes for putting the slides and material together
- 30 minutes for rehearsing the notes
- The workshop itself takes 6,5 hours of my time.
- It is a nearly 2 hour drive away, so that eats another 4 hours.
- After the workshop I will document all the materials, compile the data into a comprehensive summary and add my professional recommendations along. That takes another day, so that’s additional 8 hours.
That’s total of 28 hours of work for one workshop.
Calculate that with whatever price / hour you think you are worth or you should get. When you decide on your hourly price, remember to include all the costs you bring to your business and then add some as a margin. Depending on your expertise and the industry you represent, there are the general price levels for these types of services. You need to figure out from the customer’s perspective are you considered to be more valuable, equally valuable or less valuable than the alternatives.
Do note, the 28 hours is the mechanical time. Your expertise and value add must be covered in your price / hour. I always recommend thinking how risky is it for the customer to buy from you. The less you are known and recommended, the more risk trusting your word will be. And this directly impacts their willingness to pay for your services.