How to build a coaching business which gives great financial rewards as well as satisfying everything that is important to you is one of the biggest challenges facing most new coaches.
If you are a coach you have almost certainly entered the profession because of your love for the work you do, your desire to help people and to see others grow and develop. And that is a great start however your passion may be over-shadowing the need to really consider whether you can make this a viable business proposition.
I know many coaches who have left secure employment and set up on their own and within a short time found that they are barely scraping enough money to pay their expenses, let alone provide a comfortable income.
If you have a coaching practise you now have a dual role: one to be a great coach and two to run a business. Many coaches new to business underestimate the time involved in running the business side of things and many also find that they have to get involved in activities which they don’t enjoy such as managing finances, marketing and selling their services.
Just some of the key questions you need to ask yourself at the outset are:
Whether you like it or not the hard truth is that to build a coaching business successfully you need to do some sort of business plan which will really help you to think through all of these questions and examine your business proposition.
Below is a small business plan template which gives you a great guide to plan and build a coaching business. I resisted doing a business plan for a long time, just letting my business grow organically. However once I realised my business wasn’t growing as quickly as wanted I decided to go through a business planning process and document what I claimed I had in my head.
I found completing this small business plan template a hugely valuable process getting me to examine the different areas of my business, who my competitors were and how I was competing.
It also forced me to look at the financial side of my business – which
income streams were working best for me, what my outgoings were and what
income I actually expected to take out of my business.
This has to be your starting point…clearly articulating what is important to you and what is important to your business. This will act a firm guide for your and your business helping you to make decisions that are right for you. As an example one of my own organisation’s values is:
Everything we do has to make a difference whether this is to an individual, an organisation, society or the world.
You need to be crystal clear about what you want from your business and quantify it. This includes looking at your desired financial goals as well as others such as the number of days each week you want to work, how many holidays you want and any flexibility you desire.
Who is it that you really want to do business with? If you have already started coaching you will find you are attracted to and work better with some people more than others. But more importantly who is prepared to pay for your services at the fees you want to charge?
Make sure you really understand what it is that your customers want and need and how you will help them. Potential clients will only sign up if they believe that you are providing them with real benefits.
We all have competitors but instead of seeing them as a threat see them as a useful source of information.
Do your research – what are they offering, how much do they charge, what are their strengths, what are they doing that you are not, how do they market themselves? This will help you to decide how you can differentiate yourself and decide on your own unique selling point (USP).
How are you going to get people signing up and paying for your services?
There are many ways to do this and cost vary enormously but the trick is finding the right ones for your business e.g. networking, direct mail, website, business cards, social media marketing, referral marketing, advertising and PR
An essential exercise to carry out is a SWOT analysis:
Do you need coaching premises? This may be a question you have asked yourself as you set up your coaching business so here are some pros and cons to help you decide whether it is worth your investment.
The obvious downside is the cost that this will add onto your business so you need to think carefully whether you will get a return for your money. Many people rush into renting premises only to find that they do not have the revenue to cover this expense.
So you first need to ask yourself ‘What is it that you will use an office or consulting room for – will it be for carrying out your coaching sessions or for carrying out the other aspects of your business i.e. admin, marketing, preparation?’ If you are coaching by telephone or at your clients’ premises then perhaps you don’t if you have space to work at home. And if your clients are geographically dispersed are they likely to travel to this one location?
However there are some significant advantages of having your own premises. Maybe if you have others in your house during working hours you need a quiet space in which to work. You need to think about the image you want to portray and an office may help you to appear more professional if you need to meet clients face to face. You also need to consider how relaxed your clients will feel if they are coming into your home.
Some coaches use coffee shops and hotel lobbies however you need to think about client confidentiality and whether your clients will feel comfortable having others within ear shot. I know I wouldn’t feel comfortable and think of how many of my own clients would have held back on their own openness if they were being coached in a public place.
If you need a place to coach that is professional and private but don’t want a long term commitment there are plenty of rooms in managed offices or hotels which you can hire by the day or even the hour. Of course the more flexibility you have the higher the cost per hour you will have to pay so you will have to build this into your rates. However this could be a practical solution when you first set up.
You could also use your own network of professional contacts and see who you know who has a room they would like to rent out to you when they are not using it – by doing them a favour you may get the room at a reasonable rate, the only downside being a possible lack of flexibility and availability.
So having your own coaching premises has some tremendous advantages giving you a distinct edge and maybe an advantage over your competitors but you do need to ensure that your costs are covered.
Who else do you need to work with? Do you have a network of associates whose expertise you can draw upon? There may be areas you have less experience in or desire to carry out such as your accounts or admin so it might be worth considering what you might want to outsource.
As a business person you must ensure that you build a coaching business that is financially viable. You need to give a projection of your income based on how much you want to charge out, how many paid hours you intend to work and the number of clients you want to work with.
And you must take into account your costs which could include:
Once you know your total costs you will then know how much you need to earn to break even, in other words how much you need to earn so you are not making a loss.
That's the outline of the small business plan
template that I used to build a coaching business.