The Ins and Outs of the Coaching Business- Part One
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The School of Coaching Mastery estimates that the average executive coach makes $325 per hour, the average business coach makes $235 an hour, and the average life coach makes $160 per hour. I charge around $250 per hour. With over 2.5 billion people online daily, the amount of revenue made through coaching can be significant, and enough to quit your day job.
The money’s there, but coaching isn’t for everyone. More than that, most people have questions about how to start or grow a coaching business. We are in a series about practical strategies you can use to build a business that supports your family, and do it by the end of 2015. We’ve talked about hosting your own conference for little or no money, and getting booked on TV. Let’s talk about how you can build a profitable coaching business as a part of your arsenal.
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You can coach
One of the biggest objections I hear from people who want to start a coaching business is the question of their credentials. We question our self at one point or another as to whether anyone should or will listen to us.
First, realize that the best “training” you can get is experience. If you have experienced something and triumphed through it, you’ve been trained on the most important part of coaching. Learning something in a book or course is not the same as going through that situation in real life. If you have the experience, you can learn how to help people in the most effective way. You have what it takes to be a coach. Don’t let haters keep you from making an impact in someone’s life.
The “free” consultation call
Since August of 2011 I have given away 127 hours of free coaching. Yes, that’s an accurate number because I keep track. One could look at all those hours as a lost opportunity, but I view it as my training on how to coach. I am a better coach because of that on the job training. I don’t however, recommend you do the same.
People *generally* (I don’t like to make generalizations) don’t respect something as much when they get it for free. My tip this is don’t give away free coaching. It’s a strong statement, but I stand behind it.
I’m not telling you to charge $200 an hour. I’m saying that when someone has skin in the game, they’re invested and are likely to take action on what you teach them. You can use a service like Clarity and charge a small amount, or tell people it costs $5 for a 30-minute consultation session. The point of this isn’t to make money.
You want to qualify your calls because those calls take up a valuable resource: your time. Qualifying these calls separates those who are serious from those who aren’t. Out of those 127 calls about half of them were with people who were serious. Out of 127 hours of free coaching, seven became paid coaching clients…
A lot of experts will tell you to offer a free coaching consultation call. The premise being if someone wants to hire you, that call will give him or her the assurance they need. I can see their point, but I disagree. These calls are usually given to someone who’s not in the financial position to afford coaching right now, but would love the free advice. In the end it’s not the best use of your time. If you have a podcast or blog, I’m guessing you have tons of free content that you could direct them to answer their questions.
Charging a small amount for these calls is not unreasonable, and not out of most people’s budget. You can record these calls through a service like Free Conference call, and send the recording to them afterword so they can work on what you talked about. Everyone wins in that scenario.
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Besides the money, there’s an important psychological principle happening. If someone is going to chase a dream, or make a big change, they have to change their mindset. When they get a free session and “possibly” do something with the info, that doesn’t help change their mindset.
When someone– who doesn’t have disposable income– musters up a few bucks to learn something important to their dream, they will take action, but it does something significant in their mind. In their mind they’ve “earned this” and get committed to the process of not giving up.
We get free content everyday in the form of blogs, podcasts, and videos. If you want to know how to build a business, the information is all around. Yet, many are stuck right now. Why is that? A small investment of money helps us focus since we’re invested. If you have ever paid for coaching, you know exactly what I’m talking about.
Again, don’t be offended if you’ve had free coaching. Read through what I’m saying and use it in your business. Your time is worth something, and when someone pays (even a small amount), they will respect you and their dream a lot more. If you operate a non-profit or a ministry, ignore this advice completely.
When you’re constantly giving away your time for free, no one will want to pay for that time. Why would they when they can get it for free? The way you make sales with your business is to “show” people that what you’re selling is valuable. Constantly giving away your time isn’t showing your value. Charge a small amount of money for your time, and to help the mindset of those you’re talking to.
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Remember, you might not be an A-lister (yet), but that doesn’t mean your time should be free. If you have experienced something, and now teach that topic, your time is valuable and your audience should realize that. You’re not teaching them theories; you’re teaching what will help.
This is the end of part one, come back Monday and we’ll get into the how to behind a profitable coaching business.
Are you a coach? Do you want to start coaching?
P.S. Just a reminder that Wednesday is the last day to get Jared and my new course at the early bird price. Will this be worth it? One thing I’m doing is giving you all the numbers. What income looked like and from where. How it added up and at what point did I pull the trigger to quit my day job. We’re not holding back in this one. Details here
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Photo: Flickr/ Celestine Chua
