Ep 203 – How Do Coaches Make Money?

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Episode Transcript

If something isn’t working well in your coaching business, a lack of strategy might be holding you back. Strategy is one of the most important muscles to build as a business owner. Otherwise, you’re in the “I hope it works” camp. That’s where I was for a few years when I started coaching and my income showed it.

You are more business savvy by far than I was! And still, you might not have thought much about this aspect of your business that I’m about to share. It’s an eye opener.

All businesses, including coaching businesses, need a business model. It defines exactly how you will earn profits, what you will offer that is highly desired by a unique target audience and how you’ll attract that audience.

Is There Enough Demand for Your Coaching?

My attitude as a new coach was avoidance of all the businessy things. I didn’t want to think about profits, marketing, business plans. I just wanted to coach and help people and I assumed that would bring me financial rewards. I thought: “I will just tell everyone I’m a coach and my clients will stream in. Word of mouth will do the rest.”

That was a lovely dream and it does work for some well-placed coaches with big networks but it does not work for most coaches in their early years. You need to create demand for what you do from the beginning. You’ve heard about supply and demand. It affects coaches’ livelihoods too.

Okay, so you might be thinking … “What do you mean, Rhonda? I’m selling coaching – that’s my offer. And I’m going to charge for it by the hour with tiered packages of sessions.”

Okay, that business model is called Fee-for-Service. But … is there enough demand for coaching for that to keep you in business? Are there enough people out there actively looking for a coach? Yes, some people are, but in my experience, coaching in and of itself is not a service that’s in high demand in the general public.

The Problem of Scaling Up Your Coaching Business

All successful business models require on going demand from enough people who will invest. So you may think, “Well, I’ll just scale up. Do group coaching, online coaching and that will solve that problem.”

In 2005, 7 years into coaching and 4 years into training other coaches at Coach Training Alliance, there were a lot of companies selling membership program apps. By the way membership programs are a Subscription  business model. The tease was to make your coaching scalable. I got the bug!

I woke up with a powerful vision for a membership program. In 2006 I launched The Coach’s Power Path, which was a 6-month long journey with 4 modules each month designed to help new coaches learn and implement the business side of their coaching business through online training and group coaching with me.

It took me 6 months to write all the curriculum, hire a small team who developed all the technical parts of enrollment and delivery, and then launch that offer. I invested quite a bit of money into this idea too.

I thought it would help me scale up my coaching business so I could earn more while helping thousands of coaches to thrive financially in their business. But many hard lessons came my way over the next 5 years about this business model:

  • I needed a huge leads list in the tens of thousands to attract enough members for me to earn well at this revenue stream.
  • I joined a joint venture marketing group (a business model called Affiliate) to have other experts who market to coaches help sell my program. But I found it a time consuming and inequitable experience.
  • Few members actually consumed the weekly curriculum or implemented the guidance even though they were paying for it. Other marketers told me to enjoy that aspect of the business model. But I could not. I wanted to actually make a difference not just sell memberships.

Sure, I made some money but not nearly enough for the upfront investment of time and money. I dropped the whole business model and program 5 years later.

What did I do wrong? I bought into the hype about the membership model. So many marketers sell bright shiny tactics and I gullably jumped at the easy money idea.

I also bought into the idea of passive revenue selling online courses. Make money while you sleep is the tantalizing concept. It sounds so good, doesn’t it?

But there’s nothing passive about it. While the bulk of the content creation is done up front, the costs and labor to keep revenues flowing in are relatively high. The more people you want to sell to means more marketing to attract them. And it’s a style of marketing that’s highly promotional. It takes a team of people to pull it off. So no, not passive at all.

So look, I’m not saying you shouldn’t try one or all of these business models down the road but it’s not a great way to START your coaching business.

Still there’s the problem of having enough demand for your coaching with 1:1 services. But I found the answer to that and I call it …

The Simplest Coaching Business Model

I designed this model for my own business and it’s worked like a charm for me for a long time.

When I work with coaches in my Coaching Business Breakthrough program I teach them this very specific business model.

You offer 1:1 coaching — so far so good — but not sold by the hour or in packages of sessions but rather in a Signature Program custom designed for a unique audience you want to work with who have unique problems your coaching can help them solve on the way to a big goal. You’ve heard me talk about this before.

Here’s how I help my clients develop this simple business model and I it has 3 important twists from what most coaches try to create on their own:

  1. We start by choosing one viable audience for you to serve that fits your values and experiences.
  2. Then I help you do research to discover your audience’s BIG PROBLEM – the one that will prompt them to seek your services based on a demand for solutions. That’s one twist!
  3. Then we develop a high ticket private program designed to solve that problem. It’s loaded with specific milestones your audience wants to achieve and is articulated with highly relevant benefit-rich language your audience understand. That’s the 2nd twist!
  4. We go on to create ways to continuously build awareness about you
  5. And create web copy with 2 authentic conversion processes to bring you ideal prospect clients who are ready to consider hiring you. That’s the 3rd twist!
  6. Then you learn how to enroll ideal clients into your high-ticket program.

What’s so great about this simple business model?

  1. It’s the easiest model to launch your coaching business
  2. You quickly become highly credible to your audience, which inspires higher investment
  3. You can earn a 6-figure profit with relatively low labor and costs
  4. It’s a satisfying way to make a positive impact working with less people longer term
  5. You can expand your business model from there

And here are a couple of bonus things that I love about this model:

  1. You’ll only spend your private time with highly motivated prospects and clients
  2. And you’ll build a strong referral network that’s free

The best thing about this is that we strategize and write every piece of this together so you can graduate from the “I hope this works” method of launching a coaching business.

If you are ready for hand-holding to get it all done right the first time, let’s talk! Fill out the application on prosperouscoach.com/VIP and we’ll have a get-to-know-you call to be sure we are a good fit. I’d love to work with you!

I have two openings for two coaches right now. Go get one!