Pricing your first session: the three numbers

Most instructors setting their first price start in the wrong place. They look at what the studio down the road charges, pick a number near it, and hope the session works out. Sometimes it does. Often the price was never the problem, or never the solution.

A session you run yourself has three numbers, and they only make sense together: what you charge each client, how many clients you take, and what the room costs for the time you need it. Change any one and the others move. This post goes through each, then puts them side by side with real arithmetic, so you can see which lever actually matters for the session you have in mind.

Number one: your price per client

Your price is what each client pays, and it is the whole of what they pay. If you are registered for GST, it includes it. Clients never see or pay Trimio's service fee; it comes out of your takings, not added on top of your price.

That makes your price simple to communicate and simple to compare. It also means it has to carry everything: the room, the service fee, and what is left for you.

A useful starting question is not "what do others charge" but "what do my clients already pay me, or someone like me, for a session like this?" Your existing clients are the best evidence you have. A price they already accept is a price you can start with.

Number two: your class size

Your class size is the most clients you would take. It is a teaching decision first: how many people you can genuinely watch and correct in the session you want to run. It is also a practical one, because a room only appears to you if its capacity fits your class size.

It matters to the arithmetic in a specific way. Your class size sets the ceiling on what a session can earn, but it does not set the break-even. The break-even is set by the room and your price. A larger class size gives you room to grow into; it does not make the first session safer.

Number three: the room, for the time you need it

The room's cost is the host's hourly rate for all the time your session needs, not just the session. On Trimio you set that time in 15-minute steps: set-up, session and wrap-up. Clients only ever see the session.

This is the number instructors most often underestimate. A 60-minute class with 15 minutes either side is 90 minutes of room. At $60 an hour, that is a $90 hosting fee, not $60.

The set-up and wrap-up are yours to decide, and yours to pay for. Some sessions need them, especially with equipment. Some do not. It is worth being honest about which yours is.

Putting the three together

Here is the sum the app does for every Offering, using an example. It is an example, not your numbers.

You run a 60-minute mat class with 15 minutes either side, so 90 minutes of room at $60 an hour: a $90 hosting fee. Your price is $30 a client.

Eight clients bring in $240. The hosting fee is $90. Your service fee on your own takings, made up of 13% of that revenue and $1.00, is $32.20. What is paid to you is $117.80.

Four clients bring in $120. Hosting fee $90, service fee $16.60, paid to you $13.40. Four is the break-even in this example: the fewest clients for the session to cover the room and the fee.

Three clients bring in $90. The hosting fee is $90 and the service fee is $12.70, so the session is $12.70 short. That difference is the Hosting Shortfall Fee, charged to your card.

If nobody books, nothing runs and nothing is charged.

Which lever moves the break-even most

Now change one number at a time and watch the break-even.

Raise the price. At $35 a client in the same room, the break-even drops from four clients to three.

Lower the price. At $25 a client, the break-even rises to five.

Shorten the room time. Keep $30 a client, but ask for 75 minutes instead of 90, say 15 minutes of set-up and none after. The hosting fee falls to $75 and the break-even drops to three.

Choose a different room. Keep $30 a client and 90 minutes, but in a room at $40 an hour. The hosting fee is $60 and the break-even is three, with $17.30 paid to you on three clients.

Two things follow. The room rate and the time your session needs often matter as much as your price. And the break-even is the number to decide on, because it is the number that tells you whether your list is long enough before you commit.

The app shows your break-even before you choose a room, and it recalculates live as you change your price, your class size or the room. You can try every one of the variations above on screen, with real rooms, before anything is locked in.

Matching the numbers to your list

Once you have a break-even, compare it with the people who have actually said they would come. If the break-even is four and your list is six, you have a margin. If it is four and your list is three, change something before you start: a cheaper room, a shorter allocation, a slightly higher price, or a longer list.

That comparison is the real test of whether a first session is ready. It is set out in more detail in could you fill a room on a Tuesday?

A few practical notes

Your price includes GST if you are registered for it. Whether you need to register is a question for you and your accountant; the app works the same either way.

You can run the same session in different rooms at different times, and each room's numbers are shown separately. A session that does not work in one room may work comfortably in another.

And the sum is the same every time: the room for the time your session needs, one service fee on your own takings, and the rest paid to you, usually within two business days. For how every side of the money moves, see who books, who pays, who gets paid.

What Trimio does not do

Trimio does not set your price, and it does not tell you what you will earn. Nobody can promise how many clients will book. What the app does is show you the arithmetic for your session, in each room, before you commit to any of it.

Try your own three numbers

The income calculator takes the room's hourly rate, your price and your class size, and shows the break-even for one session and what a regular session could be worth. Could be worth, not will earn.

Questions instructors ask

Does the client pay the service fee?
No. Clients pay your price, GST included, and nothing else. The service fee comes out of your takings.

Why is my hosting fee more than the room's hourly rate?
Because the hosting fee covers all the time your session needs: set-up, session and wrap-up. A 60-minute class with 15 minutes either side is 90 minutes of room.

What is a break-even?
The fewest clients your session needs to cover the hosting fee and the service fee. Below it, you pay the difference, the Hosting Shortfall Fee, to your card.

What moves the break-even most?
Often the room rate and the time your session needs, as much as your price. The app lets you compare rooms and settings before you choose.

Can I change my price later?
You set your price on your Offering. Check the break-even again whenever you change it, because every price change moves it.