Ep 178 – How Can Coaches Work Less and Earn More Profit?

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Episode Transcript

This episode is inspired by an excellent question a coach asked me. And I love answering your questions so ask away. You can ask me easily from my website contact page.

The simplest, least expensive business model for coaches is to offer a high-ticket one-to-one VIP Signature Program geared towards helping your target audience solve the big problems that have been in the way of achieving their big goal.

Oh, how I wish I had started my coaching business this way in 1997 when I finished certification! It would have saved so much frustration. I would have earned more faster and not wasted so much money trying all sorts of other business models.

2 Big Mistakes Coaches Make That Are Easy to Fix

The two biggest mistakes I see new coaches make are:

  1. They aren’t serving a big enough problem, which keeps the coach from earning enough.
  2. They offer too many options to prospects, which keeps the coach from earning profits. They run themselves ragged trying to enroll clients and lose profits because their expenses are high.

There’s a difference between revenue – the total of all your sales – and profit, which is what’s left after expenses and taxes are subtracted from the revenue. You want to be focusing on profits so you can use that as you’d like to for you and your family.

I would love to save you from making those 2 mistakes that I made in my coaching business.

If you haven’t heard them yet, I recommend you listen to 2 earlier episodes — Episode 65 – Are You Solving A Big Enough Problem In Your Coaching Business? and Episode 66 – How to Describe Your Coaching Program Without Selling Coaching.

The business model I recommend to my clients is the model I have for my own business now. Profits are high, expenses are low and I work with clients only 3 days per week. That means I have a lot of discretionary time.

With this simple business model:

  • You don’t need big coordinated marketing campaigns or to be an influencer on social media.
  • You don’t need a Virtual Assistant to help you with all the tasks because admin is minimal.
  • You don’t need a bunch of software programs with monthly fees.

Your business can be simple, delightful, fun and relaxed.

Don’t get me wrong. I’m not saying that building a coaching business with this business model is easy. There are lots of things to learn. Lots of tasks to pull the foundation together. It starts with choosing a viable target audience and doing interviews to learn what they want so much they’ll invest highly to get it.

But all of that also gets YOU ready to serve them in a way that will also serve you. There are mindset and habit shifts to make to help you charge high-ticket prices. I love to help coaches with that.

Complex Business Models Mean a More Complex Life

In my 3rd year of coaching, I drunk the koolaid about how smart it is to leverage your time into group programs and earn passive revenue with evergreen products. I created group coaching programs and online training. It took tremendous effort to get it up and running and keep it running.

I did not leverage my time or keep more profits. In fact, my profits dropped because I was spending so much money on apps, a Virtual Assistant and a web designer to create and maintain the platform for my membership program.

The truth is those programs didn’t help my clients much either because the reality is few people extract the real value from those programs. Most don’t have the discipline to complete online training. And for what I was offering the masterminds fell short of the kind of hand holding coaches really need to launch and sustain a successful business.

I heard from a fellow mentor coach that the idea was not to care if people who bought my programs succeeded. That wasn’t going to be okay for me!

I added even more complexity. I created a high ticket bundled program with a group mastermind, plus one-to-one work with me and two annual live retreats. Even though it was high ticket the expenses were astronomical. It took hundreds of hours to create the web infrastructure and campaigns to enroll people into those programs.

Yes, I had made more money that year than ever in my life but profits were low because of all the expenses. And the costs were high! It literally made me sick.

My first decade in coaching ended with me burnt out and having to take a medical sabbatical. And when I stopped putting all my energy into all those things I had created the flow of income stopped. Dead stop.

When I healed, I did a full reset on my business model, my website – everything. I shut down the membership program and online training programs.

The significant physical and financial costs of a complex business model are not talked about much. The reality is that the more complicated you go, the harder you work and often the less money you keep.

The Lie of Passive Revenue

But you say: “Rhonda, isn’t passive revenue what we should all be moving towards.” Get this … there is no passive revenue. All revenue requires upfront work and expenses. If someone tells you they had a big month with some online program they launched, stop and ask yourself what it likely took to earn that money.

But also, remember, just because you create something doesn’t mean people flock to buy it. You have to drive traffic to those things constantly. Sure, some of it can be automated but unless you’ve built a very large leads list — 10,000 people minimum in your target audience who already know, like and trust you — you won’t earn much from all that work.

Remember, the goal isn’t just revenue, it’s profits! Plan for profit.

Are there people that are profitable with these complex business models? Yes. But you won’t hear about their many lean years on the way to that and the expenses to create the revenue. The few coaches and mentors with 7 figures in revenue are spending multiple 6 figures to keep their business running.

All of this is why in my own VIP Signature Program called Coaching Business Breakthrough I teach coaches the simplest business model. We customize everything for their business foundation one step at a time. I love helping coaches create a satisfying livelihood that’s sane.

But you know what I like the most about my Signature Program? I get to know my clients well and help them over time to do something that would be herculean if they did it on their own. Collaborating makes lighter work.

And, I love my 35-hour work week with a 4-day weekend any time I want.

If you’ve been listening to my previous episodes, you might have caught the idea that there are developmental stages in a business. Start Up is the time to walk not run.

Nothing will teach you faster about yourself and your audience than working with clients one to one.

You’ll learn about your strengths and weaknesses as a coach. You’ll figure out your secret sauce — a talent you have that’s unique and leveragable.

And, once you’ve worked with a bunch of people privately who are all in the same unique target audience, it’s easy to create online programs that more people will buy.