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.
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
Subscription service + Options the consumer wants + Delivered on
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:
- Choose a viable audience
- Find out their BIG PROBLEM – the one that will prompt them
to seek your services
- Develop a high
ticket private program designed
to solve that problem. That’s one twist!
- Create ways to continuously build
awareness about you.
- Drive traffic to a website
with an authentic non-salesy conversion process or two. That’s the 2nd twist!
- Invite ideal prospects to an
enrollment conversation and enroll them.
What’s so great about this simple business
- It’s the easiest model to start
- You quickly learn how to coach
your ideal audience
- You can earn a 6-figure profit
with relatively low labor and costs
- It’s a satisfying way to make a
And here are a couple of bonus things that I
love about this model:
- You’ll only spend your private
time with highly motivated prospects and clients
- 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
- 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
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
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
- $4500 on ads
- $3000 on virtual assistants and
- 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.
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
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
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
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