Everyone is capable of greatness.
But to unlock that greatness, sometimes you just need a little nudge in the right direction.
Coaches exist for this exact reason…
And in a world where mental health challenges and small business owners abound, the coaching industry is continuing to grow.
So if you’ve ever thought about putting your unique set of personal development skills to use and starting a coaching business…
Now is your time!
I'm Ippei, and I've been killing it at online business, passive income, and local lead generation since 2014...
And to help you get started, I’ve put together this 7 step guide that includes everything you need to know to get started…
Plus a realistic, itemized look at what you can expect to spend in startup costs for starting a successful coaching business in 2021.
Let’s dive right in!
How to Start a Coaching Business in 2021
Starting a Coaching Business in 2021? Here's What You Should Know:
You don’t need a striped jersey and a whistle to have a coaching career. But you will need a unique set of skills. To get your coaching business started, you will need to create a business plan, find your coaching niche, market your services, and set boundaries with your clients.
Start Up Costs
While this list is not a comprehensive compilation of every you need to start a coaching business, it provides a snapshot of what you need to add into your business plan.
Training/Education:
Technology/Software:
Legal:
Accounting/Finance:
Outsourcing/Hiring:
Totals:
Sunk Costs Total: $17,222
Monthly Costs Total (Annual): $42,000
Combined Total: $59,222
Annual Revenue of Established Coaching Business
According to LinkeIn, the average annual revenue of this kind of business is: $50,100 to $92,100
Source: https://www.linkedin.com/pulse/coaching-fastest-revenue-growing-industry-umesh-venkateshProfit Margins of Established Coaching Business
And finally, the average Profit margin of this kind of business is: 25%-40%
7 Step Quick Start Checklist:
1. Coaching VS Consulting
Coaching is not designed for giving your clients all of the answers!
A good coach takes the stance of believing that their clients have the answers and solutions needed already inside of themselves.
Their primary job is to draw out those answers through strategic questions and coaching strategies.
If you believe that your client is capable of finding the answers for themselves, then you as the coach are simply there to help them along the way!
Whereas a consultant is someone who does not believe that the client has all of the answers necessary to solve their problem.
Consultants are literally hired to actively teach their clients new strategies and solutions!
They exist to provide answers and creative solutions.
And they ARE actually supposed to give away the answers!
But too many coaches make the mistake of confusing these two unique careers and skill sets…
So if you want to be a coach, then you need to learn the difference so that you aren’t stuck spoon feeding your clients the answers.
This might result in happy clients…
But it will ultimately stunt their growth and ability to problem solve and think strategically on their own.
Which will usually create a codependent relationship between you and your client…
Because they will end up coming to you with every little question that they have.
2. Write a Business Plan
If there’s one thing I know for sure, it’s that most people don’t get super excited about sitting down to write a formal business plan.
But I think what’s needed here is a little perspective shift.
Think of your coaching business plan as your own personal coach!
The beauty of a coach business is in offering accountability and support for other small business owners…
And your business plan can actually do this exact same thing for you!
You see, a business plan isn’t just a fancy document that you are obligated to write to feel like an “official” entrepreneur.
Nor is it a tool used entirely to obtain outside investor funding or small business loans.
The most important aspect of a well written business plan is that it effectively helps you to reach your goals.
And this is accomplished by writing a business plan that lays the foundation for your business systems.
Your systems will be what carry you from your dreaming and scheming, to actually achieving long term goals.
So how do you do this?
Well, first off all, make sure that you’re writing your business plan for YOU!
It can be as simple or complex as you need.
But if you’re struggling to get started with a basic outline…
Don’t worry, I’ve gotchu:
Basic Things to Include in a Business Plan:
From there make sure that you include clear actionable steps for the way each area of your business will be run.
And then move on to flesh out the market analysis that will make targeting your ideal client so much easier!
Finally, setting long term financial projects and goals for the next year, five years, and ten years of your business will help you to stay on track.
Looking back on this business plan as you move forward throughout your coaching journey will help to remind you of why you do what you do…
And help you refocus on where you’re headed!
3. Getting Legal and Business Banking
Another huge step in establishing your coaching business and adding credibility to what you do is forming a legal business entity and opening a business bank account.
There are three basic business structures you should be aware of:
Your business will automatically be categorized as a Sole P…
But I highly recommend taking things a step further and forming a Limited Liability Corporation instead.
The S Corp will probably be far beyond the scope of what your business will need!
However, forming an LLC offers you much needed legal protection as the business owner that a Sole Proprietorship fails to offer.
Essentially, as a Sole P, you can be held personally responsible for business liabilities and legal actions taken against your business.
But as an LLC, only your LLC and business can be held liable…
You are protected personally as the business owner for any legal action being taken against you outside of the scope of your business.
In addition to forming your LLC, you will also want to apply for your EIN number.
Your business EIN number is your tax identification number, and it acts as a sort of personal social security number for your business.
Applying for an EIN number is completely free and can be done online from the IRS’s website.
Once you’ve gotten the legal side of your business taken care of, you can move on to opening a business bank account.
Opening a bank account for your business is a huge step, and one that will require you to have obtained your EIN number.
Fortunately, beyond these two steps, there aren’t specific coaching “licenses” that you need to obtain to legally operate your business.
Without an official business bank account, you will put yourself in the position of mixing your personal finances with your business finances…
According to this article by Bench:
https://bench.co/blog/operations/best-bank-for-small-business/
The best bank accounts for small businesses are ranked as follows:
Best Bank Accounts for Small Businesses:
And trust me: that is a headache you don’t need in your life!
When selecting the right bank account, ask around to others in your niche about who they use for business banking.
Not all banks are created equal, and you need to be sure that you’ve chosen a bank that will accomodate the needs of your business model.
4. Hone Your Niche
Business coaching or life coaching can be extremely broad fields.
One of the best things you can do for your business is to “niche down”.
If you’ve never heard this term before, niching down refers to narrowing your focus as a small business and targeting a specific type of client.
Your niche is the specific group of people who are the absolute best fit for your services.
This can be narrowed down in a variety of ways:
And this list is just scratching the surface!
Plus, your niche is usually a combination of several of these different aspects.
For Example:
If you are planning to specialize in fitness coaching, then you might choose to narrow down your coaching niche by targeting those in the health and fitness world (obviously). But also narrowing further by pursuing clients who are of a specific economic status to afford your fitness coaching services. In this way you’ve targeted lifestyle and economic status. If you want to go even further, such as niching down to a specific gender then you can!
As a whole, the more specific your niche, the more compelling and targeted your marketing and message will be.
The goal is that when you are putting out marketing material, or even writing copy for your website…
When your potential client reads it, they will feel as if you are speaking directly to them.
Honing your message this clearly will require work and intentionality, but it can be a game changer for the success of your coaching business.
5. Create Your Packages, Pricing, and Contracts
Alongside the process of honing your niche, you will also need to hone in on your pricing, and packages.
There are so many different methods for determining what you will offer and how much you will charge.
Ultimately, you will need to experiment to find out what fits for your business.
Which will usually come down to finding out what works for and appeals to your ideal clients.
Here are some examples of coaching services that you can consider offering:
Coaching Services:
Each of these different packages will target the needs of a different type of client.
Depending on the type of clients that are coming to you for help, build your list of services around their needs.
I will note however, that creating an online coaching course has several benefits.
The primary benefit is that an online course, if done effectively, can be sold over and over again…
But you only have to do the initial work once!
If your niche is suitable for creating a course that you can market and sell repeatedly…
This can be an incredible way to generate passive income that will support you as you build up a base of high value clients.
When it comes to pricing your services, there are three common methods for pricing out coaching services.
Pricing Your Services:
The most important part is factoring in your business expenses, as well as your own time!
It’s not enough to price your services based on a number that “feels” right or falls in line with your competition’s pricing structure.
But if you are struggling to price your services, consider this:
What amount of value are you delivering for your client, and how much is this value practically worth to them?
For Example:
If you are a business coach, and you are coaching a client through their struggles with marketing a product… How much is this help worth to them practically? If you are able to help them overcome these business issues, how much of a financial breakthrough will it create for them?
While determining the value of a given problem can be highly subjective…
The goal is to assign a monetary value to each project and then charge 10% of that value.
So if you determine a certain coaching package to be a $50,000 value to your client…
Then charge $5,000 for that service.
Once you’ve fleshed out the details of your different packages and price points, you can move on to creating your contracts.
Having a written contract signed by every client you work with is absolutely mandatory.
When creating basic contracts for your coaching services, make sure that you have a contract drafted for each of the following areas as they apply to your business.
Contracts:
Without a contract, expectations are easily miscommunicated or left unmet.
For your sake and your client’s…
Please create contracts and then have them reviewed by an attorney!
Then thank me later.
6. Marketing and Client Enrollment
I’m going to let you in on a secret…
When you’re trying to onboard a new client:
Talk less, and listen more!
People love to talk about themselves, and one of the best selling points for you as a coach will be your ability to listen.
If a potential client feels comfortable talking with you, then that is one of the greatest selling points you could give them.
In addition to being an active listener, you will need to exude confidence.
If you don’t believe in your ability to help people, then why should anyone else?
The goal of any conversation with someone you are pitching your services to is for the potential client to ask, “How can I work with you?”
Another amazing way to reach your ideal clients is through social media.
But not just through having a business Instagram or Facebook account!
Those are great starting points, but the goal is to join the conversation that is happening amongst your ideal customers.
Which means that you need to be actively involved in the online forums where your ideal clients are at!
For Example:
If you are the up and coming fitness coach that I mentioned above, then you need to join a handful of health and fitness groups on Facebook, and interact on fitness related threads on Reddit.
Start with an introductory post that isn’t spammy or sales-y.
Just introduce yourself and what you do/who you serve and what your qualifications are.
Then join in on the conversations happening in these groups or threads in a genuinely helpful and valuable way.
The goal isn’t to pitch your services immediately.
After your advice or input, many people may just say, “hey, thanks!”
And this is perfectly fine.
But others may be more interested and will even reach out to you to continue the conversation via DM’s.
This person will be a viable lead for your coaching business!
Just interact authentically, and focus on bringing legitimate value.
Sales will happen naturally if your goal is to serve people well.
Beyond your interaction with social media, it’s also a good idea to create a website.
Even if your website doesn’t generate a lot of traffic right away…
Having a credible place to direct potential clients to learn more about you is so important!
If you don’t have the budget to hire a graphic designer right away, no worries!
You can easily build a professional website without the help of a graphic designer using a template based website builder.
Some of them are as simple as dragging and dropping the design elements into place and adding in your website copy!
Here are some great options for user-friendly website builders:
A well rounded marketing strategy for your coaching business will extend beyond a website, however.
If you're ready to learn techniques that will ensure the longevity of your business...
7. Set Boundaries
At the end of the day, you probably want to start a coaching business because you are interested or passionate about entrepreneurship.
Unfortunately, too many new coaches make the mistake switching roles with their clients!
What do I mean by this?
Essentially, without even realizing it, new coaches start treating their clients (emphasis on client) into their new bosses!
Before you realize it, you’re coming at their beck and call, jumping when they say jump, and answering emails and phone calls during all hours of the day and night.
And probably allowing these clients to invade your weekends and personal life.
Guess what?
If you want to have a successful coaching business…
Then you need to set boundaries and manage client expectations!
YOU are the boss of your business.
Not your clients.
And this is no shade to them!
Most new coaches actually train their clients to have these high expectations and lack of boundaries without even realizing that they’ve initiated the cycle.
But although you are there to serve your coaching clients with excellence…
Healthy boundaries will only make you a better coach!
You might start to feel guilty if you’ve made a habit of responding to your clients within 30 minutes regardless of the day or time…
But if you are constantly bending over backwards for every single client, you will just end up burnt out and exhausted.
Which means that your clients won’t actually be getting the best of you!
And they deserve your best.
Set these work-life boundaries early on, and trust that it will actually produce better results and a more excellent experience for your clients.
Pros and Cons
of starting a coaching business
Pros
For many aspiring entrepreneurs, one of the greatest draws to launching a business is the freedom to set your own schedule. There’s no boss to dictate your day, or look over your shoulder… You are in control of your time. This can be both freeing, and stressful. But for most small business owners, it is one of the most gratifying aspects of being self employed.
If you want a fancy office, you can totally go that direction in your coaching business. But for many people, the ability to run their coaching business from the comfort of their home is a big plus! It gives you a lot of flexibility and freedom. Plus, when you have a business that you can do with just yourself and a laptop… You can virtually work from anywhere, not just from home! Which makes the online coaching business model great for those who want the freedom to travel and continue working.
Ultimately, a coaching business requires minimal tools, supplies, and software. In comparison to the average upfront investment required for most businesses… A coaching business has very low startup costs. This is good news for someone who is ready to put in the time and effort that it takes to run their own business, but don’t have a lot of capital to invest initially.
Remember, you aren’t a business consultant! It isn’t your job to spoon feed answers and viable solutions to your clients. You have the opportunity to help them unlock their own potential and creative solutions by guiding them and encouraging them. Which takes a lot of the weight off of your shoulders as a coach!
Cons
One major mistake that so many new coaches make is giving too much of themselves away. Instead of creating flourishing and independent clients… They accidentally set themselves up for draining codependent relationships with them instead. Be wary of this pitfall, and set clear boundaries with your time, so that your clients will learn to fend for themselves, instead of turning to you with every little problem or question.
In the beginning, it can be really difficult to know how to price yourself. Balancing competitive pricing alongside your overhead costs and financial needs is a tricky business. Be careful not to sell yourself short simply because you’re new to the coaching game. But also be sure that you can deliver the level of results that your pricing suggests! Like I said.. It's a delicate balance.
Much of your success as a coaching business will be directly tied to your clients’ results. If you fail to help people get to where they are trying to go, you will have very little to show future clients… Which will ultimately stunt your business’s growth. You need to know what you’re doing. Hiding behind good branding, compelling marketing, and empty promises will only get you so far. If the results aren’t there, your business won’t be either.
Your income as a business coach will be directly tied to the hours that you work. It isn’t a source of passive income. So if you’re leaving your 9-5 in hopes of working less… You may need to reframe your expectations.
Starting a Coaching Business Can Be Profitable, if You Know This First:
Alright, let’s get straight to the point here:
Without actual clients for you to coach...
Your business coaching startup won't even be a real business.
It'll probably just be you talking to yourself in your home office...
And that's just sad!
So while there are a lot of moving pieces that will ensure your success as a business coach...
The first step is to get clients coming through your metaphorical door before anything else will even become relevant!
Fortunately, I have something that I think will really help you.
You see, when I decided to quit my boring 9-5 job, I left with the intention of starting my own online business.
I was barely paying my bills with the 2K per month that I was making at my job....
Until I stumbled across the local lead generation business model.
Online lead generation changed everything for me:
In fact, I'm making well over 50K a month now in a span of less than five years!
Plus, I get to help small businesses with one of their most basic needs:
New leads!
If you will take the time now to learn the art of local lead generation…
You will be able to passively generate new business coaching leads for your business forever!
That's the beauty of lead gen:
Once you've done your due diligence, you will be able to sit back and focus on the portions of your business that truly need your attention.
Like your existing clients!
So if you're ready to explore the wide world of lead generation for yourself, click here to see how we can help you get started today!
