Ep 67 – What Is Your Coaching Business Model?

This episode, called What Is Your Coaching Business Model? is the 6th in my Coaching Business Checkup series, which is all about how to strategize the most important parts of your business. If something isn’t working well in your coaching business, it might be a lack of strategy holding you back.

At the end of this whole series I’ll have a downloadable Coaching Business Checkup Assessment you can use to diagnose and treat what’s ailing in your business so you can fix it and thrive.

The show notes for today’s episode can be found at prosperouscoach.com/67

Just in case this business model idea is totally new to you, let’s define what a business model is and why you want one.

Why Have a Business Model for Your Coaching?

A business model is literally a design for the success of your business. It’s a structure you create that makes your business viable. In other words, it’s your plan for earning good money as a coach.

Essential, right?

Like many aspects of your coaching business, your business model can’t really take shape until you have targeted a viable audience and developed a smart coaching niche. Those decisions are the cornerstone … everything else you build for your coaching business comes from that.

Notice I said a moment reliably attract people to your offers. That takes strategy. It’s a far cry from what I did for so many years at the beginning, which was what I call the “I hope it works” approach to business.

Without a business model, you are leaving your success up to dumb luck.

No doubt, you experienced a lot of business models just living in the modern world but you might not have thought much about it. I’ll just name a couple to help you understand the concept

Let’s take Netflix. You get an account. Pay monthly. And for that low fee, you get access to their impressive catalog of TV series and movies to stream on demand.

That’s called the Subscription Model. It has 3 main parts:

Subscription service + Options the consumer wants + Delivered on demand

It is something you could create someday. More about that in a minute.

How about Uber? Their model is called Create the Marketplace, which operates on supply and demand

SUPPLY = people with cars who want to earn

+ DEMAND = people who want to get someplace now without driving

It’s very specific and innovative. And this is close to what a coach needs to do. You identify a BIG PROBLEM that a specific audience faces and create a hunger for your program which helps to solve that problem through coaching.

The Simplest Coaching Business Model

A while ago I aired an episode called The Simplest Coaching Business Model and it’s been a favorite with record downloads. This episode goes deeper into what’s involved.

By the way, thank you so much for going back to my earlier episodes! I can’t tell you how often I hear that people are binge listening to every episode. That’s a great way to learn a lot fast.

It’s a great sign that episode is popular. It means that coaches now are much more business savvy than I was when I started. So well done you. Keep that up!

For a coach, the simplest business model is to offer 1:1 coaching.

Here’s how I help my clients develop this business model with 2 important twists:

  1. Choose a viable audience
  2. Find out their BIG PROBLEM – the one that will prompt them to seek your services
  3. Develop a high ticket private program designed to solve that problem. That’s one twist!
  4. Create ways to continuously build awareness about you.
  5. Drive traffic to a website with an authentic non-salesy conversion process or two. That’s the 2nd twist!
  6. Invite ideal prospects to an enrollment conversation and enroll them.

What’s so great about this simple business model?

  1. It’s the easiest model to start with
  2. You quickly learn how to coach your ideal audience
  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

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

I’ll be talking more about how critical these two things are for your sanity in an episode soon.

There are other business model options that might help you scale up and reach more people in less time. However, consider that you could also keep your life and business simple. If you create a meaningful program with milestones that are important to your audience you can charge quite a bit for it. I covered this is Episode 66.

The Challenge of Scaling Coaching

Scalability is one of the biggest challenges in coaching businesses. To scale, people start thinking about “passive revenue”, a concept often attached to revenue streams such as:

  • online courses
  • selling books, ebooks and other products
  • membership programs

It sounds so good, doesn’t it? I’ll just create a few online courses and put it online and boom! Passive income! I’ll make money while I sleep.

Here’s the thing that I learned the hard way, 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.

A good rule of thumb to remember is the higher number of people you want to buy what you’re selling the more marketing it takes. And it’s a style of marketing that’s highly promotional. It takes a team of people to pull it off. So not passive at all.

The Affiliate Marketing Model

Where people really excel at these scalable business models is when they are already well known in their industry. Think Tony Robbins, Brendan Burchard and Marie Forleo. They not only have a huge leads list of their own, but they also have other experts with huge leads list willing to help market the program or product for a kickback (also called an affiliate fee).

The affiliate fee is often 50% of the sale. And tracking all of that requires special programs and website.

The business model is called Affiliate Marketing and is composed of:

Email marketing with affiliates + a live or canned event + sales page + online or live course

There’s one business model being highly marketed to coaches right now, which I call the Evergreen Webinar Model. It involves:

Ads on social channels + webinars + online courses

This model is touted to be highly lucrative and I can see how it absolutely could be over the long run.

Experts selling the training to learn this business model often have testimonials like this …

“I just had my first $15,000 month!”

And that alone has us frothing at the mouth to sign up for the training.

But it’s important to realize that to earn that $15,000 in revenue in one month this individual may have invested up to or beyond:

  • $4500 on ads
  • $3000 on virtual assistants and web design
  • months of content creation
  • the cost of the training to learn this model $8 – $10,000

The way that business model becomes profitable is over time when costs per sale start to decrease. Just the continuous investment can literally kill a coaching business.

Yes, it could be an amazing business model later on. But, for a new coach who isn’t already well known and who doesn’t have a significant network of potential clients and marketing partners, it can be very difficult to pull off.

Membership Programs

Another costly option is membership programs. Back in 2006 when membership programs were trendy, I took nearly a year to create a comprehensive online course called The Coach’s Power Path. It was a vision I woke up with one day and truly thought I’d earn loads while helping hundreds of coaches.

In short, it was a colossal failure. I invested 10’s of thousands in that venture and never got close to earning it back, much less profiting.

I just didn’t realize how complicated it was — not only to create the curriculum and the entire back end of the membership site — but also to constantly market in ways that I really disliked. It was exhausting.

Later a marketing expert told me that most membership programs are loss leaders, which means it’s only a low cost offer to raise awareness and trust so you can offer people something higher priced and higher touch.

What About Group Coaching?

Group coaching is a much simpler business model than selling courses, membership programs and products. And, for many target audiences, gathering people with the same big problem or goal will greatly add to their transformation.

What you need going for you for this model to work is the 6 strategic steps I mentioned before for 1:1 coaching PLUS a developed network in your target audience. It could be your own leads list, a connection with a center of influence or a good sized following on social media.

That’s something you can build on your own without a lot of costs or any assistance!

I recommend groups for coaches who have a year’s experience or more in 1:1 coaching and that amount of time building visibility online.

So now, do you know what your intended coaching business model is? Have you strategized who you work with, what they want that they’ll invest in and how you’ll enroll enough of them to earn well? You’re on your way!

In the Next Episode: Calling All Coaches to Innovate and Lead

Ep 5 – The Simplest Coaching Business Model

This episode is part of my Start Smart Series. A listener asked me to talk about the simplest and least expensive way to get a coaching business off the ground. Great question!

I love it when listeners tell me what they want to hear on the show. If you have a specific request, go to my contact page on —ProsperousCoachBlog.com — and get in touch.

High Profit, Low Tech and High Touch

The answer to the easiest coaching business model is ultra simple! It’s 1:1.

If you’re charging enough and enroll your clients into a longer term package, you won’t need many clients each year to make a good income. I only work with 20 – 30 clients each year.

Your marketing could be minimal if you have ready access to your chosen target audience. And because expenses are incredibly low for this business model, 1:1 is the most profitable option.

Think about it … You don’t have to have a website (although you may want to.) You won’t need a team or even a Virtual Assistant to help you with all the tasks because admin is minimal. You don’t need big coordinated marketing campaigns, a strong presence on social media or a bunch of apps with monthly fees.

Literally all you need is a phone and a private place in your home to take client calls. And maybe an inexpensive business card for networking.

You know what I’m describing, don’t you?

It’s the way every service entrepreneur did business before the internet. Don’t roll your eyes. It’s still the way a lot of service entrepreneurs operate.

Sometimes I wonder if it isn’t easier than all the online stuff everyone, including me, does now. But an online business model does allow you to have an international audience, and I love that.

For that analog way of business, you have to be an active networker, go where your clients are, be a good conversationalist and a non-salesy enroller.

When I started, I only offered private coaching. I found all of my clients through networking and speaking.

It was only in my second year that I added in face to face group coaching. Then started doing VIP days – that’s 3 to 8 hours of working with one person in one day.

It was only in year 6 that I shifted to online. I created a Membership Program. Honestly, a huge amount of work for poor returns. Then, I added a high ticket online Mastermind with two yearly retreats. And I sold two self-study online training programs. For one of them, I took a group of 20 – 50 through it quarterly as well with a closed Facebook group.

It was fun doing all of that stuff and I made good money. But it was soooo much work keeping it all rolling. And so much of my income was going to expenses!

That’s often overlooked when coaches choose a business model. The more complicated or technical you go, the harder you work, and sometimes the less money you keep.

There really is no passive revenue except royalties. I was lucky to have the opportunity to co-write Coach Training curriculum for a royalty and that curriculum is still being used.

Market Less, Serve Clients Longer

But you know what I like the most? Getting to know my clients well and doing deeper work. The 30 hour work week with a 4 day weekend isn’t bad either! That’s my lifestyle choice.

So in my 20th year in business, I’m back to working privately with client in a 5 month comprehensive coaching business building program. I also offer a 90-minute strategy session.

So how do you find and enroll 1:1 clients? That’s a question for another episode. But I remember hearing what I thought was an urban legend, when I was in coach training …

Sandy Vilas, the then CEO of Coach Inc, supposedly worked with 80 clients each week, all of whom he enrolled simply by calling colleagues and inviting them to become his client. (To me 80 clients each week is 8x too many.)

That takes confidence plus a large and eager network. And my guess is that Sandy was an extrovert. LOL!

Every Coach Gets to Build Their Own Marketplace

The reality in today’s distracted world is that all coaches will need to find and develop their own tribe or target market. That’s why the wisdom is to fish in the smallest, most specialized pond, that you can.

The more you narrow your audience and then offer specific solutions to that group’s biggest problems, the faster you’ll build a network of fans who don’t really need to be sold on working with you. That’s the best!

And there’s a lot of joy in building a community.

What It Takes to Succeed with Online Programs

When people hire me to help them choose their coaching niche and build a business foundation I always ask them what they want to offer. Many say they want to quickly move into online programs.

I understand the attraction. You help more people transform in less time, which is especially great if you don’t have much time to give to your business right now.

But to succeed with online programs you need several things set up first, which takes time.

You need a fairly robust list — 5,000 people minimum in your target audience and probably more like 10,000 people who already know, like and trust you.

Develop joint venture marketing relationships with other people targeting your audience but who have a significantly different offer. That will help push your enrollment numbers up. (Another reason to narrow your audience and niche.)

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. That’s why 1:1 is the best way to start out as a coach.

Nothing will teach you faster about yourself and your audience than working with clients privately. You’ll learn about your strengths and weaknesses. You’ll figure out your secret sauce — a talent you have that’s unique and leverageable.

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

Mentioned in this episode:

Contact me if you’d like to request a specific topic for the Prosperous Coach Podcast.

The next episode is: 4 Mistakes I Made in Coaching Business Startup (and I lived to tell the tale!)

Quick Fixes for 10 Group Coaching Mistakes Nearly Everyone Makes the First Time

Group coaching, masterminds, teleclasses and workshops are fantastic ways to leverage your time, earn significantly more and give your tribe a richer experience that has lasting impact. But if you are not used to working with groups, it can feel a bit intimidating.

group coaching Rhonda HessThe best advice I can give you is allow yourself to be vulnerable and let connection and collaboration take the lead. Sure be the authority, but also understand in your heart that the magic of groups is in the group

Everyone makes mistakes. They are never fatal to the program. At worst you might upset someone, but if you’re tracking the energy, you’ll know that and can easily make up for it by being real, owning your mistake and offering an offline private conversation. I’ve been amazed how in those circumstances the individuals always come back as more enthusiastic contributors who take leaps in the program.

Here some favorite facilitation mistakes and how to avoid or correct them.

  1. Too much information
    Limit yourself to 3 key points for every 90-minute period. Illustrate your point with powerful open-ended questions, exercises and stories that are relevant.

Business Friendships for Fun and Profit

Last weekend I flew to San Diego to go bowling with friends and build my business. OK, not necessarily in that order. I attended a networking summit with a bunch of conscious business owners in the Internet marketing space. Besides the bowling, we also shared marketing tips, tried out new business ideas, and set up promotional partnerships. But the point is, I was among friends.

Old alliances were refreshed and new connections sparked. And, I brought home the precious feeling that these guys have my back. If I’m looking for a particular resource, or I need perspective on something I’m working on, I know one or more of them will be there to help.

A peer network supports coaching business success

Don’t Build Your Coaching Business Alone

Even if you’re somewhat of a loner, you still need other people to hold space for your evolution while you grow. I know that for some it can be a stretch to hold your own in a group. I’ve been there, many times. But the rewards are rich – starting with the intrinsic reward of camaraderie, that priceless feeling of good fellowship on the journey.

And it doesn’t stop there. The truth is, every business owner needs a success team. You need team members you can trust with the tasks that are not the best use of your time. You also need mentors who help fill the holes in your knowledge, fans who cheer you on, and business friends who check your sanity, hold up an honest mirror for you, and help you spark new ideas.

I owe my business success to an ever-growing group of human angels. Their questions have sharpened and clarified my vision. They’ve believed in me when my belief in myself flagged. They’ve helped me accomplish more than I ever could have alone. And sometimes they’ve led the way to a clear and easy path forward.

Create a Mastermind Group for Your Coaching Market

If you are only offering one to one coaching right now, this is the year to diversify your revenue streams. Your own Mastermind group is the easiest new program to offer. It’s a lower cost option for prospects to engage with you, and it will help you get off the money for time treadmill. As well as being a great stand alone program, a Mastermind group can be a great upsell or follow on program to a freebie, workshop or ebook.

Coaching Groups – Ten Favorite Mistakes and How to Fix Them

Group coaching, mastermind programs, teleclasses and workshops are natural additions to a well-leveraged marketing funnel for your coaching business. And they help you reduce your time on the “money for time treadmill”. But if you are not used to working with groups, it can be a bit intimidating.

Every group facilitator starts as a beginner and develops mastery by facilitating.  Everyone makes mistakes. While they are rarely fatal to the program, it’s good to know about the pitfalls in advance.

Here are ten favorite facilitation mistakes and how to avoid or correct them.