Coaching of all types is growing in popularity in the United States, with the life coaching industry alone worth $1.5 billion and the business coaching industry at a whopping $15 billion. If you have an area of expertise and want to help people to improve their skills, a coaching business can be very lucrative.
Here we’ve provided some tips that can help you to build a successful coaching business.
Choose Your Niche
Coaching can come in many forms – life coaching, sales coaching, financial coaching, health coaching, management coaching…. the list goes on. You’ll need to consider your skills and experience to determine in what areas you could provide value to your clients.
If you have experience in business, you may want to narrow down your niche to a particular area of business where you have strengths. It could be sales, marketing, operations, management/leadership, business finance, or some other aspect of business.
The same is true of life coaching. You may want to focus on stress reduction, positive thinking, or another area where you have insight.
Determine Your Target Market
Next you need to determine who you want your clients to be. If you choose some kind of business coaching, do you want to focus on aspiring entrepreneurs or target companies who want coaching for their management team or employees?
If you choose life coaching, or health and fitness coaching, do you want to focus on a younger or older demographic? Men or women?
It’s important to choose a target market so that you can direct your marketing efforts to those people. For example, if you choose life coaching for young women, Instagram is a good place to advertise and engage with potential clients.
Determine Your Delivery Method and Pricing
Now you need to determine if you’re going to target the local market and do in-person coaching, or if you want to reach a broader market by offering virtual coaching. Do some research into both local and online coaching businesses to see what the competition in your chosen niche looks like.
Then you need to determine your pricing. Your pricing should be based on market prices, and on your level of experience and expertise. Life coaching rates, for example, range from $75 to $200 an hour. When you’re just starting out, you’ll likely need to be on the lower end of that range, but you can increase your rates over time after you have a track record.
Create a Business Plan
No business can success without a business plan. Creating a business plan is important for three reasons. One, it forces you to research and think through every aspect of your business and strategy. Second, it will become your roadmap to launching and running your business. Lastly, you need a business plan if you’re going to raise capital or obtain a loan for your business.
A business plan has several sections.
Your executive summary is a summary of the key points of your business plan. It should highlight things like your target market size, your value proposition, your competitive advantage, and your potential revenue. You’ll write this section last after you’ve completed the rest of your plan.
This should be a summary of your company’s goals, mission, and vision.
This section should be in the form of a problem that your potential clients have and how your services will solve that problem. It should also detail how you’ll provide the services and your pricing.
You’ll need to do some research for this section to find out the market size, the growth of the market, and an analysis of your competitors. It should also include a summary of how you can create a competitive advantage in the market.
Detail how and where you will market your services to reach potential clients, and how you will sell those prospects on your services. This section should be very detailed, so you’ll need to do some work to create a full strategy.
This should detail how you will manage the company and who you will hire. It should include details about your experience and credentials.
This is the nuts and bolts of your business – how you will operate the business on a day-to-day basis. What activities will need to happen daily to keep the business moving forward?
Your financial plan should include a summary of your startup costs, plus revenue and cost projections for three to five years.
Form a Business Entity
Now you’ll need to determine what type of business entity you want your business to be. Most entrepreneurs choose to form a limited liability company (LLC) because it offers personal liability protection for LLC owners. An LLC is also a pass-through entity in terms of taxes, which means the profits of the business pass through to you, the owner, to be reported on your personal tax returns. The LLC is not taxed.
The cost of forming an LLC varies by state, ranging from $40 to $500. You can form an LLC by filing formation documents with your state, which in most states can be done online.
Implement Your Plan
Now it’s time to put your business plan into action and start to market your business. You’ll need to set up your website and your social media business pages and start implementing your marketing plan. Hopefully, your schedule will start to fill up and you can start coaching!
A coaching business of any kind can help many people improve their lives, or help businesses to thrive and grow. Whatever your niche, you’ll be providing tremendous value. You can also make a good living once you start landing clients. Be sure to create a solid business plan so that you can lead your business on a path to success.