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#PRACEXPLOSION Quick Growth Tip #10: The Money Maker Equation

How much money can you make from your coaching business? It's an interesting question (for obvious reasons!) and one that you have to know the answer to. The problem is, most coaches have no idea where to even start in answering that question. Which is ironic, because it's actually quite an easy number to figure out. And once you know how to calculate it, you have pretty much total control over the final result. "So go on Rob, tell us this big secret..."

How much money can you make from your coaching business? It's an interesting question (for obvious reasons!) and one that you have to know the answer to.

The problem is, most coaches have no idea where to even start in answering that question.

Which is ironic, because it's actually quite an easy number to figure out. 

And once you know how to calculate it, you have pretty much total control over the final result.

"So go on Rob, tell us this big secret…"

OK, how much money you can make from your business is determined by two things:

  1. How many clients you have; and 
  2. How much money each of them will pay you for as long as they remain a client (technically known as the "lifetime value" of LTV of the client)

Now, that second number, the LTV, is itself  made up of two elements: 

  • how much money, on average, a client spends each time they buy from you (the average transaction value)
  • how many times an average client buys from you

For too many coaches, this equates to their session rate and how many times a client comes to see them. however, in my Practice Explosion workshops we explore many ways to break out of the "time for cash" trap

In future Tips we'll explore how to increase each of those three elements (number of clients, average transaction value and number of transactions), and even more importantly, which of the three you should focus on at different stages in the development of your practice.

For now, however, I'm going to set you some homework.

I'd like you to think about how a company like Starbucks

a) gets new clients through the door

b) gets clients to spend more when they're there and 

c) gets clients to come back more often

Breaking news

After being forced to cancel my April workshops in Toronto and Montreal, thanks to the Icelandic Volcano earlier this year, I've rescheduled for October.

Visit www.PracticeExplosion.com to register your interest.

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