Ep 111 – Smart and Not So Smart Coaching Business Expenses

This episode is inspired by a smart question from one of my VIP clients.

So I’m going to reveal where expenses go for my coaching business. And while I’m at it, I’ll share common expense pitfalls for coaches and finance savvy mindset tips.

I know this might seem boring but earning well is not boring. Losing profit after all you work feels like a tragedy. Don’t go there.

Reading the show notes for this episode will be especially helpful because I’ll list the sources of my expenses but I’m not going to bore you by listing them out verbally. Find those complete show notes at prosperouscoach.com/111.

Bright Shiny Apps & Services Steal Your Coaching Profits

First let’s talk about not-so-smart uses of your money for your coaching business.

There are multitudes of ads for bright shiny apps and services coming at you in your inbox and on social media. And in a moment of scarcity thinking you might be tempted to buy one, and another, and then another.

You know, you might think something like “maybe THIS will make the difference in my business”. That can be a dangerous thought.

Those seemingly little $10/month and $20/month expenses quickly add up to thousands of dollars annually that your earnings might not cover. So think smart and choose wisely.

It’s so tempting as a new coach to get services for online client portals, social media time saving apps, virtual assistants, bookkeepers and all sorts of extras that in the long run probably won’t add enough value to help you earn more.

Keep Your Business Low Labor and Low Overhead

Design your business to run lean. That doesn’t mean being cheap with your business. The old penny wise pound foolish adage applies.

Smart expenses are those that save you significant time so you can serve clients more efficiently and earn more. But it takes some trial and error to learn how to invest money only where it really counts.

Be strategic with this rule:

Only invest in what you need right now

not what you think you might need someday.

Regularly dump apps and services that aren’t helping you earn more. If you have a low-income month or year, it could partially be that you’re spending too freely.

Think twice about the fancy, expensive coaches portal or top of line email campaign service. You don’t need those.

Here’s a tip … if you’re 100% sure you like an app or service and it’s truly helping your bottom line then opt for annual payments for as many expenses as you can instead of monthly because you’ll save a lot.

Startup Expenses Are Higher

Investing in your business is not only necessary, but it’s a privilege. Think of expenses for useful services as a blessing that helps you thrive. Pay for them with gratitude.

For example, significant investment goes into coach training (the vocational skills side of your business) and for hiring a business mentor like me to help you get everything set up right the first time (which is the strategic side of your business).

Also I think it’s wise to invest in a good web designer who is also a coder to create a WordPress website for you. Doing your own site on Wix or Squarespace may come back to bite you now or later.

It is not unusual to spend $25,000 out of pocket before you earn much as a coach. So don’t let anyone make you feel bad about start up expenses. It’s normal for ALL businesses and entrepreneurs. But do choose wisely.

Don’t Waste Money on These Expenses

Finance experts say your expenses should be no more than 30% of total revenue. But imagine your profits if you could cut expenses down to only 10%? That’s doable. Check out Episode 5 about The Simplest Coaching Business Model. It’s one of my most listened to episodes.

By design, my business model is high on profit and low on labor and expenses. And that’s what I teach my VIP clients to create in my Coaching Business Breakthrough program.

I administrate nearly every aspect of my business myself. Once you learn how it’s fast and easy.

For a few years I’d had a bookkeeper. No more, I just use Quickbooks. A one time expense and an hour each month of my own time is far better than spending thousands monthly.

Virtual Assistants are also expensive and most don’t save you time unless you opt for a more complex business model with online products, training, webinars etc. Those things greatly reduce your profits unless you get into the business of expanded promotion, which frankly wore me out and brought me no joy.

I think it’s better to work a 30 hour week earning $200K and keep 90% of it than to work a 60 hour week earning $500K and keep only 50% of that. But that’s me.

I do most of my website updating and all of my podcast tasks. I have it all streamlined.

I also don’t advertise. Look … what I do and what you do can’t effectively be advertised.

So instead of blowing money on ads, have a strong content strategy. Put out an excellent weekly podcast episode or video. That’s how you attract ideal clients because if they like you and trust you they’ll want to work with you.

Ads do not build trust!

My annual business expenses for this past year were $6,000. That may sound high but it’s really not when you consider that as well as the monthly or annual costs for apps to run my business and podcast, it also includes:

  • cell phone and internet costs
  • CPA for tax prep
  • web design
  • computer consultant services

If I remove those things my total expenses this past year were only $3300 or an average of $275 per month.

I hope this inspires you to run a lean business and keep your business model simple. It’s a great life!

Here’s a list of my expenses for your interest:
Web Domain fees – GoDaddy is usually less than $10 per domain and you don’t need any bells & whistles they try to sell you like privacy, email and web hosting.

Web Hosting – I use A2 Hosting because they aren’t a huge company and don’t drive me crazy trying to sell me stuff no one needs.

Email Campaign Company – I swear by Aweber’s excellent customer service at $179 per year.

Podcast Hosting – I love Buzzsprout for their high customer service at $12 per month.

Internet fees – You can deduct ½ of your internet fees on taxes each year.

Mobile Phone – I use my cell phone for business and personal and can deduct ½ the charges

Credit card fees – After much research and trial I use PayPal to collect fees and pay 2.5%. I’ve found that no fee solutions or low fee solutions have huge hassle factors.

Scheduling system – TimeTrade is what I use and one of the best and least expensive out there. I’m grandfathered in at $40 per year.

Password System  – LastPass keeps my passwords easily accessible for $37 per year.

CPA – My expenses for tax prep run about $300 per year I stay with free services for Canva, Dropbox and a few others because I try to stay away from monthly fees which add up fast.

Ep 72 – Are You Stuck in the New Coach Swirl & Spin? (Reprise)

Do you know how sometimes it helps to be reminded of something?

Coaches are smart people. We have lots of wisdom brimming inside of us. And, during the pandemic, I especially need reminding about many helpful things.

And after recent conversations with past clients and current clients I thought it might be helpful to reprise an older episode.

This is all about why it’s so easy to get stuck as a new coach and how to snap out of it!

Let’s roll!

It’s got to be said because it’s breaking my heart to see so many coaches bogged down and unable to move forward with clarity.

You know how they say that multi-tasking isn’t good for your brain? The best case scenario is that you do a lot but nothing well. It actually lowers your IQ!

Well, the same is true for your brain when you overload it with unnecessary ideas and future tasks for your coaching business.

I’ve talked about overwhelm before in Ep #20 – How to Stop Saying ‘Yes” to Bright Shiny Objects

In that episode the focus was mostly about wasting money, time and brain power on programs that you’re not developmentally ready for yet as a business owner. Advanced strategies and tactics that won’t work well for you until you have the business foundation in place.

In this episode I’m going to dig in deeper to what’s actually happening in your mind and your emotional body when you heap more and more information on yourself.

When new coaches reach out to work with me, they fill out a questionnaire on my website. I ask them to give me a snapshot of what they’re doing day to day to build their business.

Nearly every person tells me their head is spinning with all the research they’re doing.

  • They are looking at other coach’s websites. Oh no! That really won’t be helpful because it’s hard to discern coaching website that work from those that are duds. It takes experience to know that.
  • They also read everything they can about coaching and coaching business tips. They’re on loads of lists. And every day are force feeding themselves with information.
  • They’re surfing for answers to BIG questions that really can’t be answered in a free blog or webinar … things like how do I choose my niche or where can I find paying clients or what do I need to do to earn well as a coach? There’s so much complexity in those questions.
  • And, they’re signing up for every free webinar and download they can get. And sometimes investing in programs they aren’t ready for.

Here’s the truth. You can’t possibly consume a firehose of information and stay sane. It leaves you breathless with overwhelm and unable to move forward.

This is what I call the new coach swirl and spin. And those are the words that I hear coaches use. They say:

“My mind is swirling! My head is spinning! And I’m so confused that I’m paralyzed.”

I so know that place!

Thousands of bits of disconnected information has literally shut down your executive function, your creativity and intuition.

And that’s when fear and doubt surges up within you.

  • Doubts about whether you can succeed in coaching.
  • Doubts that anyone would pay you.
  • Doubts about everything you’ve been working on.
  • Fears that you’ve made the wrong decision, that you’ve wasted time and money.

And then your brain starts pulling up all the “evidence” to support those doubts.

Pretty soon you’re in a depression. Anxiety has you in it’s grips.

Everything slows to a dead stop. But it does not feel restful.

You start thinking about giving up. Part of you wants to give up. You think it would be so much easier.

Then your ever helpful brain begins to justify that idea.

And shame surfaces.

That’s the new coach swirl and spin.

Of course, this doesn’t just happen to coaches. It happens to most new entrepreneurs. It happens to students and people who were unceremoniously dropped into a promotion without training.

But there’s one thing for sure and that is … you have to stop it before it gets to this point.

How to Stop New Coach Depression From Setting In

There are mindsets and habits to address this.

By the way, there are nearly always mindsets and habits that will address nearly any mental or emotional challenge that comes up repeatedly.

First, let’s talk about good habits around this. Because these are preventative.

Wouldn’t it be great if you never got to that shame stage? To that place where you negotiate with yourself about quitting your dream of coaching.

Habit #1 Open to Bite Size and Specific Information

Reach out for specific information that will help you move forward on one specific bite sized goal.

Habit #2          Take Action Immediately

Once you have the specific information you need, take action on the next immediate step. And pause.

Not too long ago I decided to start marketing in Instagram. And I’m not the most social media savvy person. But I found the app nearly useless in terms of how to actually use Instagram wisely. And I’m still learning. But I’m not loading myself up with all the how-tos. And, earlier in my life, I would have.

I held myself back from overwhelming myself on this goal to learn how to wisely use Instagram to get the word out about my podcast and my services. So, I learned how to set up a basic profile and then I learned how to post and started posting weekly.

Is that perfect? No. Have I learned it all. No. Will I? Eventually.

Sometimes the best training is observing and doing. Learning incrementally on a pace that your brain can support.

Habit #3  Schedule Learning Sessions

I’m a big fan of blocking time. Try blocking time for:

  • client sessions
  • client management
  • emailing
  • writing
  • marketing tasks

Also block time for learning. Put it in your calendar. Consider limiting it to one 1/2 hour at a time.

When I decided to start podcasting, I looked for a training program where I could go at my own pace but also be able to ask questions of an expert. I found the Podcast Host Academy. And I loved their lessons because they had them broken down into tiny steps. Brilliant!

And that way, if I had 1/2 hour, I could learn something new and test it out.

Habit #4  Set Up a Learning Community

Back in Episode #4 – How to Feel Less Isolated in Your Coaching Business I talked about the importance of community when you’re building a coaching business.

If you’re in learning mode around a particular task or strategy, see if there’s a Facebook group or an online forum or a meetup group you can join for knowledge sharing.

Okay, let’s talk about the mindset piece now.

Here’s one mindset to rule them all.

Slow Down and Think It Through

We live in a culture of speed. It’s not helping us. But it is the way of the collective. You control your speed.

Slow down when you feel the first inkling of overwhelm. Breathe. Go outside. Then, when you feel that you’ve averted the swirl and spin, go into first gear and ask yourself:

What is the next immediate, small step that I can take right now?

Then take it.

Set a timer for a reasonable amount of time and do that. Then ask again.

Develop a range of speeds. When you’re ready, shift up to 2nd gear, then 3rd and eventually 4th and 5th gear.

Remember, you can always downshift. In your coaching business, you control your speed. You control your intake of information. You control your pace of work.

In the Next Episode: Do You Fit One of These Coach Archetypes?