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This episode is part of the Start Smart series. It’s worth the listen because this topic is eye-opening. And, if you’re planning to transition from your job to full-time coaching, I’ve given you a 5-step plan near the end of this episode.
Creating a smart transition plan to move into full-time coaching is an important step. If you’re serious about making your dream happen, this is something you’ll want to do with the help of someone who has transitioned.
Sometimes coaches hire me when they don’t have a current job. They’ve been raising kids or were laid off or they quit a job to create their coaching business. They have plenty of time to work on building their business foundation and launch in a systematic, organized way.
Obviously, there are some huge advantages to that scenario. But there are also some hidden challenges. If you’re not currently in the rhythm of working for a living, you might have trouble finding that rhythm and dedicating time to your business.
On the opposite end of the spectrum is the person who currently has a full-time job, kids, and a busy life who wants to become a coach and shift to full-time coaching “someday.”
If you’re this person, you’ve put time into training as a coach and into business development but haven’t made the shift.
Maybe you’re dabbling at coaching and have a low fee client or two.
But leaving your regular paycheck and benefits, especially when you have a family, is a risky step to take. It requires a big dose of courage and chutzpah.
Some coaches never get off the bench and into the game. That’s not you! That was the apt metaphor used by a coach I spoke with recently.
The truth is that entrepreneurship — and that’s what becoming a coach is — is risky business.
No doubt you’ve heard the odds. They say 1 in 5 make a sustainable livelihood and that goes down over time.
Entrepreneurship has a bunch of rewards that frankly I wouldn’t want to live without.
- Freedom (I truly set my own schedule and work a lot less than I did in corporate.)
- Being your own boss
- Getting to bring your whole self to what you do
- Innovating and creating
- The huge feeling of accomplishment
A Common Myth About Coaching Business Startup Busted
The beauty of a coaching business is that there’s no real barrier to entry except having the grit and focus to take the risk. The truth is you don’t even have to have training or certification, although I think it’s a good idea to be a trained coach.
There’s a common misconception that I run across and it’s what inspired me to do an episode on this topic.
Recently, I was having a conversation with a smart, confident man who has been coaching on and off (more off), while raising a family and engaged in a successful mid-management career.
Odell was encouraged to become a coach by his pastor and friends. He took training and then found it hard to nail down his coaching niche. That’s what motivated him to start Googling for help and he found me through Prosperous Coach Podcast.
Odell said that he expected to replace his current income by coaching as a side gig for two years.
I wince when I hear people say that they’ll transition from their full-time job to full-time coaching when they replace their income from their current job.
Why? Because I’ve never seen anyone successfully do that.
When coaches hire me to help them build their coaching business from the niche up, one of the first things I do is to assess how well positioned they are to become an entrepreneur. I ask:
How much time can you dedicate weekly to building your business?
If I hear less than 20 hours a week, we’re having a different kind of conversation.
But I also check for their expectations.
How much money do you expect to make in the first couple of years?
Do you have savings set aside to invest in your business and to aid the transition?
That phrase “replace my income” as a condition for transitioning always stops me in my tracks.
Time is the ultimate limiter. So I asked Odell:
With your full-time job and kids to raise, how much time do you have weekly to dedicate to growing your business?
Uh oh. That’s a yellow flag. And possible a red one.
I felt for Odell because how could he or any new coach know what it takes to launch and run a business? Unless you’ve been an entrepreneur before, there’s no reason why you should know what it takes.
Sometimes, I don’t love being the truth teller, although it’s part of my integrity. I don’t like to see that “making a bundle is going to be fast and easy” lightness be weighted down by a reality check.
And that’s why there are so many people streaming into coaching because they don’t know the realities. And, it doesn’t have to be the dream killer. In fact, I believe that seeing a path clearly can raise your courage and make you more successful more quickly.
The average amount of marketing time you’ll put into your business to enroll clients is 15 hours a week. That’s true even for a veteran like myself. Although I do market a lot less than I did in my first 10 years because I’ve built up a leads list, collegial support, and expertise in marketing.
Here’s an eye-opener for you … producing my podcast with strategizing, recording, editing, writing, creating graphics, and promoting through social media takes an average of 12 hours each week. Sometimes it’s half that, sometimes it’s double that depending on what type of format I do.
I’m lucky because it’s the only way that I need to market to attract a steady stream of pre-sold clients to my website.
Odell was shocked by this news. Bless him.
He thought that because the barriers to entry are low and the word on the street was overhead is low for running a coaching business, that meant that earning a bundle quickly was also fairly easy.
It’s an understandable deduction. And yet, it’s not at all the average experience of a new coach.
That said, I’m not saying it’s not possible to become an overnight phenom and rocket to high six or seven figures as a coach. It’s rare though.
After 20 years, I don’t know anyone who has done that or replaced their income from their job before they step away from their job.
We often see a phenom and think their success was overnight, but it really was not.
Coach, Do the Math
Few coaches I met have done the math. I didn’t when I first started.
It’s smart to do the math, not just to plan for your startup, but throughout your business planning.
How will you achieve those stretch income goals?
What will you do, how many coaching clients will you get to ‘yes’, and at what price to make your vision a reality?
Back to Odell … I asked him:
How many clients could you handle while still working in a full-time corporate job?
10 clients was the number he always had in his mind.
His income is about $90,000 annually. So with 10 clients, one model would be to charge $9,000 per client per year to replace his income.
Now, those kinds of high-ticket fees are not unheard of if you have:
- Enrolling savvy
- A ready network of well-heeled people who already know, like, and trust you.
There are new coaches that have all those things. It’s a kind of privilege, whether earned or born into it.
But, even before Odell gets to that challenge of enrolling at high-ticket prices, there is the barrier of his time. 15 hours of leg work per week to find, attract, and enroll his target audience plus 10 hours minimum serving clients adds up to 25 hours each week.
He doesn’t have 25 hours, he has 15.
And, think about it … even if he had 25 hours to give on top of his 40-45 hour a week corporate job, he’d be exhausted and alienated from his family in mere months.
Not a winning plan, especially for a family person.
Odell and I discussed a more reasonable new coach plan which was to work with 20 clients yearly at $4500 each for a 6-month program. That earns his $90,000 annual income.
It’s still going to take 25 hours a week to build and maintain that business model.
Group Coaching Programs Take a Marketing Machine
Eventually, he could increase fees or perhaps do group work.
But it’s important to know that group programs, while they do extend your time and reach, actually take more of your time, money, and infrastructure to successfully enroll people. You need:
- A significant leads list or someone to promote you
- Smart marketing campaigns and conversion processes
- Technical support to pull it all off
Doable, but it’s a down-the-road plan not a startup plan, unless you already have all of these things in place.
What are all the ways a coach could earn, let’s say $100,000 yearly —that nice round 6-figure income everyone wants at a minimum? You could enroll:
10 clients into a $10,000 program
20 clients into a $5,000 program
40 clients into a $2,500 program
200 clients into a $500 program
Interestingly, the simplest coaching business model is to serve fewer people for a higher price. After trying all the other business models, that’s what I do now. And I love the simplicity!
- It takes less time to market and enroll.
- It costs less in infrastructure and is lower tech.
Discovery Sessions are the most effective way to enroll people into high-ticket programs.
5 Step Transition Plan to Full-Time Coaching
Now … do NOT let these realities of coaching business startup and what it takes to manage business models stop you from your dream of making a great living as a coach!
Instead, let it fortify your resolve, so you can wisely plan and be in that 20% who make it and keep making it happen!
If I can do it, you can do it! What I believe is, that if you’re listening to this podcast, you’ve been called. Don’t let yourself chicken out now. Put on your entrepreneur hat, step in to your CEO shoes, and take these steps to transition.
1. Start saving money.
2. Let your family and friends in on your plan. Ask for their support. Help them understand you’ll be happier working for yourself and doing what you love.
3. Do the math and create a transition plan. Reduce your expenses. Put away 6 months – 1 year of your income into savings. Or, whatever you can.
4. Clear time for your side gig.
Consider negotiating incrementally reduced hours at your job. I was able to turn my full-time salaried position into a part-time consulting gig and choose my projects. I told my boss that I’d train my replacement and be gone in 6 months. Who knew that she’d say ‘yes!’
5. Get VIP help to launch the right way from the get-go.
I’m talking about me as your VIP support. If only I’d found a person like me
when I launched my coaching business, I would have saved 3 years of heartache
and wasted investment in so many group programs and masterminds that were
lovely and entertaining, but that didn’t help me build a solid foundation and
momentum earning well.
If you want to test me out and see what all the fuss is about, grab a Strategy Session, it’s a great way to take a leap and see if we’re a good fit.
Know that building a successful business takes time and determination. All the businesses you know about and patronize put a lot of time, money, and energy behind the scenes into making everything work and still do.
When people say it takes money to earn money … it’s more than a truism.
But it’s totally WORTH IT!
I love my business. I love my clients. I would not work for someone else!
The Next Episode is an ON AIR COACHING Session called: The Coaching Niche of Least Resistance.
Now, stay inspired and make things happen!