The 2020s have been a decade marked by a shift in how we work and interact socially. Work from home, once just a distant dream, is now a proven and tested means for providing services. The biggest hurdle to starting a coaching business is that first push, that leap into the unknown. A daunting task, especially now as we move into 2023 and the world seems to be shifting rapidly towards new frontiers.
Fret not! It has never been easier to start your own coaching business.
The work-from-home model combined with the Internet has now opened up a whole new world of clients and information. With the new year comes new uncertainties but also new opportunities.
But how do I get started? Where can I find my clients? What do I do?
We’ve got you covered.
Let’s look at the most important steps you need to take to start your coaching business in 2023.
Step 1: Choose your Coaching Niche
This step is one that most new coaches skip, but it’s crucial to bring clarity and focus to your coaching practice, especially when you’re just getting started.
The secret is to define your own niche. Coaches are plentiful across the internet, though their quality may vary. Having a broad set of skills is invaluable but standing out matters more when it comes to client enrollment.
The advantages of creating or adapting to a niche are twofold. It narrows down your potential pool of competition, and it enables you to focus more time on the details. As a new coach, expanding across many services instead of focusing on them will only decrease the quality of your coaching.
Always remember, it does not matter how many clients you get. What matters is how many you can hold onto.
There are a plethora of niches and sub-niches to find and explore. A few to consider as a starting point are:
- Health Coach
- Life Coach
- Business Coach
- Marketing or Branding Coach
- Career Coach
- Fitness Coach
- Wellness Coach
- Performance Coach
How Do I Choose a Niche?
The biggest mistake aspiring coaches make when choosing a niche is choosing the wrong perspective. One must always consider what the customer sees when considering them.
Understand what your client may see as your strengths and weaknesses. What do you offer that appeals to them? What do they want? That must be your focus.
Think about your coaching experience so far. Is there any idea or situation you are asked to deal with more often than others?
Is there any advice you seem to give more than any other? Things like these indicate where your strength lies regarding what a client needs.
And finally, make a plan. Do you want an online-only business? Would you like to expand to the offline world in the future? What kind of clients would you like? What values of yours would you integrate into your business?
These questions are a few examples of the myriad of queries one must ask oneself while planning. A cohesive and strong plan is the final glue that can tie together the niche and services you decide to offer.
If your plans and niche conflict, make a new plan or choose a new niche. It is essential that all the components mentioned run together smoothly like a well-oiled machine.
Step 2: Build Your Coaching Methodology
Now that you understand your niche, the next step is to establish your methodology. This should be a tried and practiced system you use that can help you achieve consistency in your output.
While everyone’s methodology is unique to themselves, there are five key areas that are crucial to any coach. These are:
- Establish an objective.
- Assess the client’s situation and understand them through open-ended questions and probing their thought process.
- Provide feedback based on your assessment of your client. This often helps the client understand how you can work well with them.
- Identify realistic, achievable, and measurable goals. These can range from short-term ones to long-term ambitions. Ensure that these goals lead up to the initial objective established.
- Follow up with the client and provide support. Ensure that the client understands that small failures are normal and expected, and provide support to start smashing their goals.
Step 3: Name Your Coaching Business
Now that you have a niche and, by extension, a plan, it is time to name your coaching business. As inconsequential as it may seem, your business grows an identity from the name given to it. First impressions are important, after all, and your name is essential to that.
Choose a unique name. Browse around for businesses that offer similar services to what you plan to offer. You will find that many have generic and similar names that slip from memory as soon as they disappear from your phone screen.
Make it something a customer will remember, easy to say, and something that rolls off the tongue well. Also, make sure it is related to your niche and business strategy.
A unique name also comes in handy as your business expands, as it reduces the risk of another bigger company having issues with its trademark.
Make sure your business name also works as a domain name. Having a savvy domain name that is the same as the company name without extra padding to make it past already-taken domains is useful. You can always check for available domain names on websites such as https://namecheap.com.
Make sure to reserve your chosen name on all the social media you can use for promotion, such as Instagram, Facebook, Twitter, and LinkedIn, among others.
Now, here’s an important disclaimer:
You do not need to launch a website before starting your coaching business.
So many new coaches take months or even years to start building their coaching businesses because they are constantly working and perfecting their “websites.”
Don’t fall for this trap; it will only make you procrastinate and take longer to achieve your goals.
A domain name is useful to have whenever you are ready to build your website or your social media following. Think of it as future planning!
Step 4: Figure Out the Legal Stuff
Once you have your name and business model all planned out, it is time to legally incorporate your coaching business. Different countries have different laws, and tax structures can vary from state to state.
While companies like Legal Zoom exist to help with the registration and legal processes, it is always highly recommended to approach a local attorney or accountant to help you out.
Not only will they have more intimate knowledge of the process in your location, but having an association with a local legal and accounting entity is useful for future cases where you may need their services again for your company.
Along with availing of their services, learning how different business structures work and why the certain type advised for you was chosen is very important. Different business structures handle taxes and personal liabilities differently, and being smart about how you incorporate your business can save you from hot water in the future.
Step 5: Set Up Your Finances
Although not mandatory, we highly recommend opening a business banking account instead of using your personal banking accounts for business purposes.
This can protect your personal funds if your company is sued or incurs any form of monetary liability. Separate cash flows also ensure you can reinvest into your business safely.
Business accounts allow you to deduct expenses incurred from your business and claim them in your tax records. Co-mingled accounts are usually suspicious to tax agencies due to their propensity to be used for money laundering and fraud, and you may be denied deductions for such accounts.
But where to open your business account?
Always shop around in all financial institutions available to you. Compare interest rates, annual fees, operating fees, and initial costs. Online banks are usually the cheaper option, with low rates and fees. This, however, may lead to many inconveniences as all customer relations and support are online, and you lose out on the face-to-face experience that normal banks offer.
Credit unions and local banks are always great options as they have lower rates than traditional institutional banks. They could help expand your local network as other entrepreneurs may also bank there. Some banks even put-up networking meets and events.
And finally, Institutional banks are a great option if the higher fees are worth it for you. Sometimes they are the best option simply due to the accessibility and services they provide, offsetting the higher cost they charge. As John Hammond famously said, “Spare no expense”.
Also, sign up for online payment services, international and local, such as PayPal, GPay, Stripe, etc. Have as many as you can, with their fees in mind, of course. Wider accessibility is always attractive to customers and aids in customer retention.
Step 6: Understand Your Expenses
The first step to understanding and planning expenses is differentiating need from want. Jot down all the expenses you can consider, be it website creation, legal fees, etc.
Now analyze them carefully.
Do you need them to start up your business, or is it just a want that is not necessary?
Trimming the fat and keeping expenses to a minimum is the most crucial thing you can do for the financial future of your business.
A few examples of startup expenses that are necessary are:
- Equipment: This includes computers, microphones, website domain and maintenance, work vehicles, etc. Things you need to start up a business that will last you over a year fall under this category.
- Supplies: Supplies are similar to equipment, but lower cost and are usually consumed within a year. This includes paper, stationary, printer ink, etc.
- Real Estate: Real estate expenses are one of the highest expenses any business incurs. With the advent of the work-from-home culture, this expense can be minimized considerably, with your home becoming your office and the internet your market. If you require a professional setting to meet clients, you can rent offices by the day or arrange professional lunches to discuss with your client.
- Insurance: Insurance is an unavoidable reality for many things, and the same goes for all businesses, big and small. The best way to proceed is to contact an insurance broker. They can help determine the best plans for you. Your business will definitely require liability insurance, and your broker can suggest other policies, such as umbrella insurance or errors and omissions insurance, depending on your budgeting and business needs.
- Licensing and permits: This should be covered when you incorporate your business and shouldn’t be of much concern.
Always make sure to keep good records of everything, including expenses and income. Good records ensure that a business will run smoothly without any hiccups whatsoever.
Once you are ready to start your cash flow, remember to automate your finances.
Allocate percentages of your income for your own personal profit, reinvestment, accumulating a business cash cushion, and salaries and expenses.
Automation ensures that things run smoothly without you having to panic every month end over the allocation of funds. It also helps during tax season, as records will be automatic and easy to calculate.
Step 7: Track Your Cash Flow
Cash flow is the blood of any good business. The steps above help establish a cash flow and its source (the clients). But now is the important task of ensuring the river does not run dry.
Always track your expenses and income. Software such as Freshbooks is great at automating the process. Once you can see how money comes in and out of your business, you can adjust and ensure you have enough money available when the payments start rolling in.
Time is key to keeping a cash flow active, and having the right amount of money at the wrong time can be as bad as having no money at all.
Stagger your expenses such that you always have a client closing in. Buffer funds also help in case of emergencies, which can be replenished by your automated income allocation system.
Step 8: Get Started!
Now that you know the basic necessities of getting your coaching business off the ground, all you need to do is get started.
Once you have gone through the above process and reached a stable cash flow, you can think about expanding your business and maybe building a team.
A one-man show may be cheap, but it certainly is not efficient. Having assistants, secretaries, and graphic designers among your company’s repertoire will help streamline and give access to services cheaper in-house rather than having to outsource them.
An expanded legal team on retainer is also advised, or maybe a working relationship with a commercial law firm. As much as we hate it, the world of bureaucracy and red tape always manages to find our coaching businesses. The initial attorneys we advised you to approach could be a jumping-off point for expanding contacts in the legal world.
Make sure to socialize, mingle among coaching circles, and attend seminars. Maybe even attend a few courses and get certified. It will make you a better coach, and the certification will boost your credibility and value to clients.
And remember, have fun. The world of entrepreneurship can be daunting and mind-numbing at times, but at the end of the day, this is a passion that you are banking on. You never work a day if you enjoy work.
So, ensure that your niche is right for you, that you enjoy your work, and do not do it just for the sake of the money.
A happy coach means a happy client, and your love for your work and business will translate into even more success for yourself.
With a little bit of perseverance, grit, and the knowledge you are now armed with, this new year could be the start of your professional coaching career.
If you’re looking to get started on your journey as a coach, check out our certified courses and resources here! Come join the Evercoach family.
