Why Charging by the Hour Is Holding Back Your Coaching Income and How to Fix It.

Starting a coaching business when you’ve come from an employee background comes with so much baggage that needs to be dropped. This baggage takes the shape of mindsets which impact your business, but more than that, it impedes your ability to create wealth.  

When I talk about wealth, I’m not just talking about stacks of cash – I’m talking about what Alan Weiss defined as: The ability to go where you want, when you want and how you want.

The thing is, instead of cutting ties with employment, you then employ yourself and while you’re telling yourself you want wealth and freedom, you continue the pattern of exchanging time for money and keeping yourself as an underpaid employee (begrudgingly) watching the sidelines at other coaches having 5, 10, 30k months and asking yourself… “What are they doing in their coaching sessions to bring in those kinds of numbers, while I’m over here struggling to even hit 2k?”

And this, my coach friend, is exactly the thinking it’s that thinking is keeping you stuck exchanging time for money.

But hopefully, after you read this, you will be ready to break free… and you know what? I’m here to help you with that!

Let’s talk about what’s limiting you.

The reason you are experiencing this ‘stuckness’ that is restricting your income is you’re stuck in transactional thinking! You learned this type of thinking when you stepped into employment and it became a mindset. We all did. Transactional thinking has become almost a culture that you didn’t realise you needed to shift. 

It causes you to do what you know from employment in your own business. It’s like buying a million-dollar mansion and choosing to live in a tent in the hallway. 

When you are stuck in transactional thinking, you operate only by perpetuating what you know – but as coaches, we need to tear down those walls and step out of the boxes we put ourselves in so we can expand the income we are called to create. Which in turn explodes the income we’re able to make.

So, let’s dig in a little more about this limiting mindset that holds us back from maximising our calling. 

What is a Transactional Mindset?

A transactional mindset is deeply ingrained in most of us long before we even start thinking about running a business. It’s the mindset that dominates the traditional employee-employer relationship, where your time is directly exchanged for money. You clock in, you clock out, and in between, you get paid for the hours you work—nothing more, nothing less.

This mindset tells us that the value we bring to the table is equal to the hours we put in. It becomes second nature to associate our worth with how much time we spend working. But here’s the issue: when you transition into entrepreneurship, especially in the coaching industry, this mindset keeps you stuck. It keeps you in a loop of feeling like you’re only worth what you can physically show up for, what you can actively “do” in a session, or how many hours you can squeeze out of your day.

But coaching is not about time; it’s about transformation.

If you’re charging by the hour, you’re not valuing the life-changing, soul-deep work that you do. You’re reducing your impact to a dollar-per-hour rate, keeping yourself locked in the same cage that the corporate world taught you to live in. In a transactional mindset, everything is a one-for-one exchange—my hour for your money. There’s no room for deeper transformation, ongoing growth, or the kind of change that shifts a client’s entire trajectory.

And the worst part? This way of thinking limits both your income and your impact. You cap your earnings based on how many hours you can physically work, which, let’s be honest, is a recipe for burnout. More than that, you devalue the transformation you offer because you’re still thinking in terms of transactions, not results.

Shifting out of a transactional mindset requires understanding that what you’re offering is not just an hour of your time—it’s a lifelong transformation. It’s about charging for the results you create, the lives you change, and the expertise you bring—not just the time you spend.

OK, so as the penny is dropping for many of you, some of you are putting your ‘critical thinking caps on and want to challenge me on this… that’s ok. I’m also here for that. 

So, you’re thinking, well, isn’t exchanging value for money the same type of thing? Doesn’t that also fall under a transactional mindset?

I thought the same thing too, but let me share what I have learned with you. 

Shifting Gears: From Transactions to Transformations

It’s important to differentiate between a purely transactional mindset and a value-based mindset, even though both involve an exchange of money for services.

Here’s the difference:

1. Transactional Mindset

• Focus: This mindset is focused on the unit of exchange, typically time for money. The relationship is short-term, often based on “I give you X time, and you give me X dollars.”
• Mentality: It’s driven by a linear exchange, often without a deeper connection or intention to create transformation. The interaction ends with the exchange.
• Example: Charging $100 per hour for coaching. The client pays for that hour, and once that hour is up, the transaction ends.

2. Value-Based Mindset

• Focus: The focus shifts from “time” to the outcome or transformation. It’s about what impact or change you’re helping create in someone’s life.
• Mentality: It’s rooted in the idea that you are not just selling time but rather the impact, transformation, and results that come from working with you. This creates a more long-term, connected relationship where the client feels they are investing in their growth rather than just purchasing your hours.
• Example: Charging $5,000 for a coaching package where the client is guaranteed a significant transformation—whether it takes 6 hours or 60 hours.

Why They’re Not the Same

• In transactional thinking, the relationship is often limited to the amount of time spent, and there’s less focus on the bigger picture or ongoing transformation. The transaction is quick and shallow, just like a monetary exchange for goods at a store.
• Value-based charging is more expansive. You are charging based on the impact and transformation that your expertise, skills, and guidance create for the client. Yes, there’s still an exchange of money, but the value is perceived as something far more impactful than just time.

It’s perfectly aligned with what you want to teach. When we talk about overcoming a transactional mindset, we’re urging coaches to think beyond just the time they spend with clients and instead focus on the lasting impact and value they bring to someone’s life. This means helping your clients move from seeing their own businesses as “hourly services” to seeing themselves as catalysts for deep transformation.

Does Value-Based Charging Fall Under Transactional Thinking?

Technically, there’s always an exchange of value for money, but that’s not the issue with a transactional mindset. The issue with a transactional mindset is the narrow, linear focus on time-for-money exchange rather than the holistic impact or value created.

You’re moving your clients from thinking of inputs (hours, tasks, etc.) to focusing on outcomes (change, transformation, growth), which is a huge shift in both mindset and pricing strategy.

Bringing It All Together

In the end, the difference between a transactional mindset and a value-based mindset is simple: one limits your potential and keeps you trapped in a cycle of trading hours for dollars, while the other opens the door to greater impact, freedom, and wealth. By shifting your focus from what you do in a session to the transformation you create, you unlock the ability to truly serve your clients while also scaling your business.

It’s time to stop undervaluing yourself and the life-changing work you do. If you want to step into the wealth and freedom you’ve envisioned for yourself, you need to break free from the chains of transactional thinking. The work you do as a coach is far too important to be reduced to hours on a clock. It’s time to start charging for the impact you create, not just the time you spend.

Here’s the challenge: Take a hard look at your current business model. Are you still stuck in a transactional mindset? If so, what’s one change you can make today to start focusing on the value you bring instead of the time you put in? It’s time to step into your power, elevate your business, and create the wealth and freedom you deserve.

And if you’re ready to take the next step and learn how to build a high-converting signature offer that not only increases your impact but also skyrockets your income, I invite you to join the Ready, Set… COACH Business Accelerator. Inside this program, I’ll be helping coaches like you transition from a transactional mindset to a value-based mindset, so you can step into your power, create a signature program that truly reflects your expertise, and start experiencing the 5k, 10k, and even 30k months you’ve been watching others achieve.

It’s time to stop sitting on the sidelines and start building a coaching business that aligns with the transformational work you’re meant to do. Join the Ready, Set… COACH Business Accelerator and let’s build the future you deserve—one that’s filled with freedom, fulfilment, and financial abundance.

Remember, wealth isn’t just about money—it’s about the freedom to live life on your terms. By embracing a value-based mindset, you’re not only creating more financial abundance, but you’re also stepping into a business model that aligns with the transformational work you’re called to do.

It’s Time To remove the training wheels!

JJ

About the Founder

I’m JJ, your irregular, confident, introverted purpose-driven multipotentialite. At your service.

If your dream is to have sustainable self-confidence and unlock more purpose, passion & profit in your business and life, I’m the person you come to! 

Life Quote: “I Never Lose, I Either WIN or Learn – Nelson Mandela”

Daily Mantra: I have nothing to defend, I have nothing to prove. I have nothing to hide, I have nothing to fear.

In Another Life: I’d absolutely be me again… the solo globetrotter soaking up the sun and manifesting next-level strategies and visions that impact world one person at a time.

➨ Book your Clarity Call now, let’s achieve great things together!