Creating a Thriving Coaching Business - Tom Teague, PhD
Coaching is a growing industry, so why do four out of five coaching businesses fail within the first two years?
This is a significant problem, not only for individual coaches, but for the clients we serve because coaches can make an enormous difference to the quality of people's lives.
In this article, you will gain insight on the difference between a coaching practice and a thriving coaching business.
Coaching Practice vs Coaching Business
When coaches seek coach training and certification, the organizations that provide this training service rightfully focus on training coaches to develop skills in the practice of coaching to be effective in delivering professional coaching services. Generally speaking, there is less attention given to how to build a successful coaching business which allows coaches to make their living from their coaching practice.
A successful coaching business involves two major functions: attracting clients and serving clients.
- Serving Clients - The coach training and certifications we receive focuses on developing skills for high quality Coaching Services Delivery.
- Attracting Clients is accomplished using entirely different skills – Marketing and Selling – that are not emphasized in coach training and certification programs.
The hard reality is, as a coach business owner, we will not have the opportunity to deliver our excellent coaching services that we love and know how to do, unless we ALSO know how to attract and engage clients.
Marketing is about the numerous ways that coaches meet people who may have an interest in what we do (leads), and then taking the steps needed to identify and connect with them to see if there are any mutually beneficial and productive opportunities to collaborate, either as referral partners or as a prospective client.
Selling is about having one or more conversations with our marketing leads to explore their interests to see whether there is a beneficial transformational project that is of critical interest to the client and where the coach can help the client achieve a positive result for their project.
What do coaches sell?
Most of us were taught in our coach training programs to think of coaching practice as delivering one-to-one coaching services for individual clients.
The biggest challenge for coaches is exactly how to consistently generate 10 client sessions every week for an entire year.
Delivering 1:1 coaching services is only ONE way to make money as a coach.
Many other products and services that use your unique skills and content can be developed and offered at lower price points or even given away for free to allow prospective clients to experience the value of your work. They can get to know you better before they are ready to engage with a high-value, high-price, high-time-commitment journey through 1:1 coaching. These products and services enable you to begin attracting a community of people interested in what you offer.
Here are some examples of products and services that can be offered free or at lower price points to allow your community to get to know, like, and trust you by experiencing what it’s like to work with you before they sign up for your 1:1 coaching service.
Additional Ways that Coaches Make Money
Coaches as “Thought Leaders”
Expanding your perspective to consider other forms of coaching in the modalities of writing, speaking, and training, leads to an important mindset and identity shift for coaches. In addition to thinking of yourself as a coach, as you build your business you may choose to improve your own skills in writing, speaking, and training, or hire/partner with other people with complementary skills to create and run a successful business.
Coaches who develop these complementary skills as business owners eventually can come to think of themselves as “thought leaders” who regularly create and deliver content that educates, inspires and supports a community to overcome challenges and achieve aspirations.
Thought leader coaches offer free and purchased informational content products to their community of leads, prospects, and clients.
After working with you in your entry-level and mid-level products and services as part of their customer journey with you, some of your clients will be interested in the higher-priced, higher-value 1:1 coaching service you offer. Offering 1:1 coaching service to people you are already working with in your lower priced offerings is easier than offering 1:1 coaching service to people who haven’t had the opportunity to work with you.
Defining a Coaching Business
This leads us back to considering what makes a successful coaching business. We have now expanded our concept of the coaching business to be more than delivery of a 1:1 coaching service. We are now designing and building an entire suite of free content, entry- and mid-level products and services as a glidepath to invite clients into our 1:1 coaching practice.
If this is starting to sound like the coaching business is getting a bit more complicated, well… it is. And as we have seen, building a business requires marketing and selling to attract clients,
To develop a business, we need to also be thinking about overall business strategies, developing additional products & services, and managing the resources – money, people, and tools – needed to run the business.
Working ON the Coaching Business
When you’re considering how to attract and engage clients, it’s important to first be very clear about your business strategy – Who are the ideal clients you serve? What problems are they experiencing that you can help them overcome? What strategies will you be using to attract and engage clients? What pricing will you have for your products and services? What revenues does the business need to generate to sustain you in making a living for yourself and your family? What does the customer journey experience look like as they are building a relationship with you through your suite of free, entry- and mid-level products and services?
What products and services do you need to develop to support the client attraction and engagement strategy you have outlined in your business strategy? How much time, effort, and money will this development take? What should you do first? What is your fundamental transformational methodology for helping clients overcome challenges and achieve their transformational goals? It’s important to get clarity on your methodology to help you formulate the content for your products and services.
Finally, any business owner needs to concern themselves with how the business will be run from a resource management perspective. How will you plan and manage the finances, the legal structure, Insurance, Information technologies, and human resources aspects of your business?
At this point, we have identified six elements of running a coaching business – Business Strategy, Product & Services Development, Marketing, Selling, Product & Services Delivery, and Resource Management.
Our coach training and certification programs trained us to deliver coaching services – only one of the six elements needed for running a successful coaching business.
You have undoubtedly heard entrepreneur business owners talk about balancing their time between “working IN the business” versus “working ON the business.” This is what they are talking about.
Working IN the business includes:
- Product & Services Delivery
These are the core business functions – attracting clients and serving clients. These activities are essential activities to create and deliver value for clients and produce revenue for the value delivered.
Working ON the business includes:
- Business Strategies
- Resource Management – Finances, Legal, HR, IT
- Product & Services Development
The diagram below summarizes the six elements of a coaching business divided into working ON the business activities and working IN the business activities.
Coaching Business Success Model
PCA’s Coaching Business Success Mission
Building upon our 50+ hours of past presentations from our guest experts and expert members over the past 4 years, the Professional Coaches Alliance is undertaking an initiative this year to organize and provide our educational content to support coaches in creating thriving coaching businesses using the above Coaching Business Success Model.
PCA is a friendly community of professional coaches and service providers. We are collaboratively developing the content and providing the community support coaches need to develop and sustain thriving coaching businesses. Through our thriving coaching businesses, we inspire positive transformational change for our clients.
At PCA, we are striving to flip the numbers we talked about at the beginning. Instead of 4 of 5 coaching businesses failing, we want to see at least 4 of 5 coaching businesses succeeding! … Because we know that when more coaches are successful, we will collectively be having a broad and massive positive impact for humankind, worldwide.
If you are not yet a PCA member, we would love to have your active participation and contribution to this important mission to promote coaching success!