Starting a coaching business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful coaching business.
Importantly, a critical step in starting a coaching business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Coaching Business:
- Choose the Name for Your Coaching Business
- Develop Your Coaching Business Plan
- Choose the Legal Structure for Your Coaching Business
- Secure Startup Funding for Your Coaching Business (If Needed)
- Secure a Location for Your Business
- Register Your Coaching Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Coaching Business
- Buy or Lease the Right Coaching Business Equipment
- Develop Your Coaching Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Coaching Business
- Open for Business
1. Choose the Name for Your Coaching Business
The first step to starting a coaching business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your coaching business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your coaching business.
2. Develop Your Coaching Business Plan
One of the most important steps in starting a coaching business is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your coaching business.
- Company Overview – this section tells the reader about the history of your coaching business and what type of coaching business you operate. For example, are you a life coaching, sports coaching, business coaching, career coaching, or online coaching business?
- Industry Analysis – here you will document key information about the coaching industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your coaching business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your coaching business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Coaching Business
Next you need to choose a legal structure for your coaching business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the coaching business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a coaching business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a coaching business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a coaching business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your coaching business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Coaching Business (If Needed)
In developing your coaching business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a coaching business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a coaching business that they believe has high potential for growth.
5. Secure a Location for Your Business
When choosing a location for your coaching business, it’s important to consider the needs of your coaching clients. You’ll want to find a space that is easily accessible and convenient for them. You may also want to think about your own needs as a business owner. Consider factors like cost, parking, and availability of meeting space.
6. Register Your Coaching Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your coaching business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your coaching business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
To start a coaching business, you will need a business license and a permit to operate as a business. To find out what permits and licenses you need, contact your local licensing agency or business licensing department.
10. Get Business Insurance for Your Coaching Business
The type of insurance you need to operate a coaching business will depend on the services you offer.
Some business insurance policies you should consider for your coaching business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Coaching Business Equipment
To start a coaching business, you will need some basic equipment. This equipment includes a computer, phone, and reliable internet access. You will also need to set up your office space. You may want to purchase some office furniture, such as a simple desk and chair arrangement. You may also want to invest in coaching tools and resources, such as books, audio programs, or software.
12. Develop Your Coaching Business Marketing Materials
Marketing materials will be required to attract and retain customers to your coaching business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your coaching business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional coaching business website provides potential clients with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your coaching business.
13. Purchase and Setup the Software Needed to Run Your Coaching Business
You will need some basic software to start your coaching business. At a minimum, you’ll need word processing and spreadsheet software. You may also want to invest in customer relationship management (CRM) software to help you stay organized and manage your clients.
14. Open for Business
You are now ready to open your coaching business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
How to Finish Your Ultimate Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your coaching business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your coaching business plan today.
How to Start a Coaching Business FAQs
Is it hard to start a coaching business?
No, it is not hard to start a profitable coaching business. You can find a lot of information online and resources available to help you get started. The most important thing is to have coaching skills, develop a strong business plan, and to make sure you are well-prepared before launching your business.
How can I start a coaching business with no experience?
The best way to start a coaching business with no experience is to get a business coach. Find someone who has started their own coaching business. Ask them for advice and for help in creating a business plan. You can also read books or take courses on starting your own business. Finally, use the internet to find helpful resources and networking groups.
What type of coaching business is most profitable?
There are many types of coaching businesses, but the most profitable ones focus on personal and executive coaching. These types of coaching businesses offer high-value services that clients are willing to pay more to obtain.
How much does it cost to start a coaching business?
It typically costs between $5,000 and $10,000 to start a coaching business today. This includes the cost of marketing materials, training, and startup fees.
What are the ongoing expenses for a coaching business?
One of the main ongoing expenses for a coaching business is marketing and advertising. Other expenses may include costs for website design and maintenance, telephone and internet service, training and development, and utilities.
How does a coaching business make money?
Coaching businesses make money through the sale of their services. This can be done through individual coaching sessions, group coaching sessions, or even online courses. In addition to this, many coaches also offer coaching programs that can help their paying clients achieve their goals.
Is owning a coaching business profitable?
Yes, a coaching business can be profitable because people are willing to pay for help in reaching their goals. Coaching can provide individuals with the tools and support they need to make real progress, and many people are happy to pay for this type of service. Additionally, coaching is a growing industry that is expected to gain more popularity in the years to come, so there is plenty of potential for success in this field.
Why do coaching businesses fail?
Coaching businesses fail because the coaches do not have the proper training or experience to help their clients. They also fail because they do not have a solid business plan in place, and they do not market their coaching services effectively.
Coaches need to be properly trained to help their clients achieve their goals. They also need to have a strong understanding of how to run a business, and they need to be able to market their services effectively. Without this training and experience, coaching businesses are doomed to fail.