How to set pricing for your services
Let's have a serious conversation about making fitness services accessible to the communities we are working in. How to set pricing as a health and fitness professional? It's a big question and obviously, it's very complex, but here are some considerations and recommendations.
When aiming to do work in a given community, you must consider the communities economic status in determining your pricing. Charging an "industry average" is not only a bad business plan, its political inappropriate and in many instances, playing into the furthering of the public health crisis. If we are truly trying to serve the community we are positioning ourselves in, we must meet them where they're at, and that also means financially. A cookie cutter approach to pricing will not work.
Here is some math to consider. Let's say on the higher end one should allocate 5% of their monthly earnings to investing in health services or a gym membership. This is of course a general recommendation but it will vary from city to city. This is what it looks like for some neighborhoods in NYC.
Upper East Side, Manhattan
Annual Income: $170,000
Monthly Income: $14,200 approx.
Health Budget 5%: $700/month approx.
DUMBO, Brooklyn
Annual Income: $163,000
Monthly Income: $13,600 approx.
Health Budget 5%: $680/month approx.
East Harlem, Manhattan
Annual Income: $27,000
Monthly Income: $2,250 approx.
Health Budget 5%: $112/month approx.
Bedstuy, Brooklyn
Annual Income: $27,000
Monthly Income: $2,250 approx.
Health Budget 5%: $112/month approx.
South Bronx
Annual Income: $9-12,000
Monthly Income: $850 approx.
Health Budget 5%: $40/month approx.
These figures do not reflect those “who are counted as not in the labor force”. This includes undocumented immigrants, full-time students, those “not seeking employment”, seniors who are not working, etc. So, in reality, these figures are way higher in most working-class communities.
These figures also don't take into account access to affordable healthcare, quality of life, mental health levels, environmental conditions, access to adequate health and fitness facilities, etc. Which of course plays deeply into the support our communities need on the health and fitness front.
Here is a video I did Live on my Facebook page about the breakdown and how it plays out.
How to set pricing?
If you're a fitness professional and figuring out how to set your pricing, again it's very complex but here are some recommendations we give based off of what has worked for our organization over the past 8 years. If these figures don't meet your personal goals financially, it doesn't mean to abandon working within the community, in fact, we hope the harsh realities inspires you to continue to do the work. But in order to honor yourself and maintain a strong livelihood, so you can continue to do the work, personal financial goals are essential. You just have to realize that you must diversify your revenue streams.
What does that mean? Well can you receive grants to subsidize your work, can you get subcontracts for community partners to offer services as part of their community services budget, are there people who will act as sustainers for your work, are you getting revenue for varying streams, how can your work in a more affluent neighborhood help support your main work in the community you are servicing, etc. All things to consider.
Here are the recommended steps to pricing out your services (we will use the example of East Harlem)
1.Determine the average annual income and monthly breakdown
Annual Income: $27,000
Monthly Income: $2,250 approx.
2.Apply the recommended 5% health budget to determine the higher end of your monthly fees per student
East Harlem Health Budget 5%: $112/month approx.
3. Create a sliding scale based on the Federal Poverty Line*
- <100% FPL = 20% of calculated health budget (or donation based)
- 100 – 200% FPL = 50% of calculated health budget
- 200 – 300% FPL = 100% of calculated health budget
- 300% FPL = 100% of CHB plus a sustainer commitment
* The 2017 FPL is $12,060, which is much lower than it should be based on the average cost of living. Also, note we recommend determining these prices on an honor system, but do what makes sense for you.
East Harlem Monthly Breakdown
- $23/month = <100% FPL
- $66/month = 100 – 200% FPL
- $112/month = 200 – 300% FPL
- $112 plus a sustainer fee of $48 or $160/month = 300% FPL
4. Determine what kind of services you can offer in those price ranges. Also, another strategy is to develop different access points for all community members to your menu of services.
5. After 3-6 months, determine who your average student is and how many of that "average student" you need to recruit to your services in order to be profitable. If this is not meeting your monthly personal financial goals, refer back to our point on diversifying your revenue streams.
6. Always consider other forms of currency outside of the dollar, ie. barter exchanges, internships, etc.
We have not only had success with this business model here at Revolutionary Fitness, we believe that if more of this existed it would become a new norm. And if this was the normal practice in our industry, it would create more value in the services and the work you are doing. Don't get caught up in their system where they'd have us working our whole lives for little scraps of their wealth at the expense of our wellness and happiness. Let's create a new and healthier society based off of our own standards. Let's Move Together.