Starting a Coaching Business (2023) - Stewart Swayze (2024)

• Define Your Skills, Not Experience
• Start Coaching Today
• Develop a Coaching Niche
• Choose a Coaching Business Name
• Incorporate Your Coaching Business
• Understand Your Finances & Expenses
• Gain Coaching Certifications
• Purchase Business Insurance
• Establish Retirement & Healthcare Benefits
• Build Your Team
• Develop a Coaching Business Plan
• Purchase Recommended Software & Technology

I know you. You’re just like me. You have so much to give to this world.

There are so many people out there that need your passion, kindness, and coaching experience.

Starting a coaching business is not easy. Most days, you’ll feel like you’re “Drinking from a fire hose.” There’s a huge learning curve to running a business.

You have so much to learn with so little time. Not to mention, the pressure of making enough money to pay your bills. And, somehow find time to spend with your family and friends.

Get out there. Start your coaching now! Whether you coach for free or charge money doesn’t matter: coach, coach, coach. The faster you get going, the more you’ll learn and grow.

Sharpen your coaching skills and begin living the life of your dreams. Give yourself permission to succeed and fail. Then, learn from your success and failure.

Reframe how you look at other coaches. They aren’t competitors! They are your best teachers.

Learn what they’re doing well and not so well. Then, do it better.

• Market Demand – The demand for quality coaches is high. But, the “riches are in the niches.”
• Low Technology Costs – You can start a coaching business with a computer and basic software. As you get coaching clients, upgrade to better tools, software, and technology.
• Low Barriers to Entry – Although I recommended a coaching website, you really don’t need one. Some coaches only have social media profiles and start finding coaching clients by reaching out to their network for potential clients.
• Speed to Market – If you can coach someone through solving a specific challenge, then finding your first coaching client is the only thing holding you back.
• Freedom of Choice – You are the captain of your ship. You choose your coaching clients. Plus, when, where, and how you coach them. You can say no! You have the freedom to fire a nasty coaching client. It’s your choice, do what’s best for you and your client.
• Love Your Work – No more sitting in a sh*tty cubical, listening to the buzz of the lights above. No more hating your work. When you start a coaching business, you can do what you love every single day!

• Unpredictable Revenue – Sometimes you’re slammed with coaching clients … then all of a sudden, nothing. Your internal alarm goes off, and you think, “Did I make the right choice?” YES! Take a deep breath. You’ve planned for dips in revenue, right? You knew it would happen. Keep on pushing. Go get those coaching clients again.
• Isolation – If you’re not careful, you can start to feel isolated. Many of you left a busy office environment, and now you’re in a small home office … all alone. Get outside. Go to a coffee shop. Join a co-working space. Find social or networking activities. Getting out of your office is a win-win. You’ll cure the feeling of isolation and might also find coaching clients.
• Operating Your Business – When you have many coaching clients, keeping up with business operations and marketing is harder. You’ll start feeling stressed while figuring out how to keep up with everything. Stay Organized. Create systems, processes, templates, and automation right from the beginning. Mark my words, this will make your life much more comfortable. Pro Tip: Read E-Myth Revisited
• Marketing & Selling – I’ve met many coaches who don’t want to “sell.” It feels “sleazy.” I’m sorry, but you’re now a business owner. You have to make money to stay in business. You’ll need to learn to love the process of selling and marketing your services. You can’t coach … you can’t change people’s lives if you don’t sell your services.

Create a reliable but simple customer acquisition strategy. If you don’t, you will fail. Remember, you’re in charge. Find your style and learn how to market and sell without feeling sleazy.

Now, let’s take the practical steps to start a coaching business.

One of the first things you need to do is understand your skills. And I’m not talking about your “work experience,” as written on your resume.

A skill is “the ability to do something well; expertise.” You need to identify four sets of skills:

1. Skills you have to run your coaching business

2. Skills you don’t have to run your coaching business

3. Skills you have that will benefit you as a coach or in the coaching process

4. Skills you don’t have as a coach

5. Take some time. List ALL of your skills.

Once you develop a good list of skills and identify any immediate gaps, develop a plan to fill those gaps. For example, bookkeeping and accounting are skill gaps for me. Not because I don’t know how to do it or couldn’t learn. I hate it! So, I immediately filled that gap using the accounting software – Xero.

Finding profitable coaching niches can be difficult. When you start, you’ll want to remain broad. You’ll want to coach everyone.

Don’t do this. Niche your ass down.

If you want to get coaching clients fast, learn to find a profitable niche as soon as possible. You need to understand everything you can about your ideal clients deeply.

Remember, the “riches are in the niches.”

Knowing every need and desire of your niche will simplify your business processes and marketing.

Not to mention, a detailed coaching niche will help you:

• Increase your satisfaction, expertise, and your rates
• Identify Ideal Clients
• Create Buyer Personas
• Tailor Content Marketing & Sales Messaging
• Target Ads to Prospects
• Develop Coaching Packages & Programs

My niche as a Business Startup Coach came very naturally. I was a business consultant for years and had to market my services to attract clients.

So, consider the type of coaching you’d like to offer your target audience. There are numerous types of coaching niches. And there are sub-niches and specialties within those niches. But here are a few for you to consider:

• Life Coach
• Health Coach
• Fitness Coach
• Wellness Coach
• Business Coach
• Marketing Coach
• Career Coach
• Relationship Coach
• …and more

• What are your strengths and weaknesses from your niche/client’s perspective?
• How can you help your established network? Are you always asked for the same advice or to use the same skills to solve a problem?
• Who is your ideal customer? Whom do you want to coach?
• What makes your heart sing?
• What are 5-10 of your personal and professional values? (Personal Development, Authenticity, Fame, Contribution, Happiness, etc.)
• What is your definition of success personally and professionally. Do you want to be a millionaire? Do you want to start as a solopreneur and then grow your coaching business by hiring employees? Do you want to live by the ocean?
• How do your values align or conflict with your definition of success? If they conflict, do you need to change your Definition of Success?
• What kind of coaching practice do you want to have? Do you want online business only, one-on-one, group, virtual, or in-person coaching?

• Try to make your coaching business name unique but somewhat related to your market, niche, or coaching program
• Your business and domain name (www.yourbusinessname.com) should be an exact match or very close, with one exception: You could use your name for the domain.
• Example: My LLC is ShapeShift Lab LLC, but my domain name is www.stewartswayze.com. My brand is Swayze, my logo is Swayze, and all my marketing uses Swayze. Swayze is a recognizable name – a brand
• But all of my contracts are signed using ShapeShift Lab LLC
• For personal reasons, I didn’t want my LLC to bare my name, plus if / when I expand my company, I can switch to using ShapeShift Lab. I’ve already purchased that domain name as well.
• If your business name is unique, it will reduce the chances of another company slapping a trademark lawsuit on you
• Keep your business name relatively short. Again, consider your future website URL. You don’t want 30 characters before the “.com.” Nobody will remember that!
• You can check domain name availability at Namecheap

Once you’ve determined a business name, consider incorporating your coaching business.

Many coaches spend too much time researching to find the right legal structure. I am not an accountant or a lawyer. I cannot provide accounting or legal advice.

However, I’ll tell you to find a local lawyer or accountant to help you.

It’s critical to understand the differences between business structures. Your business structure will determine which applications to submit to your territory, state, and federal government.

And! … And this is a big one; your business structure will also determine the amount of personal liability you’ll accept for conducting business and your tax liabilities.

That’s why I recommend seeking expert advice. Below are the most common business structures as defined by the Small Business Administration (US):

• S-Corporation: “An S-Corporation (also called an S-Corp) is a special type of corporation created through an IRS tax election. An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation.”
• Partnership: “A partnership is a single business where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor, or skill. In return, each partner shares in the profits and losses of the business.”
• Limited Liability Company: “A limited liability company (LLC) is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. The ‘owners’ of an LLC are referred to as “members.” Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs.”
• C-Corporation: “A C-corporation is an independent legal entity owned by shareholders. This means that the corporation, not the shareholders that own it, is held legally liable for the actions and debts the business incurs. Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements. Because of these issues, corporations are generally suggested for established, larger companies with multiple employees.”
• Sole Proprietorship: “A sole proprietorship is the simplest and most common structure to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses, and liabilities.”

Once you’ve incorporated your coaching business, set up a business banking account. I hope you selected a business structure other than a Sole Proprietorship.

Opening a business banking account is essential in starting a coaching business. By having a separate business banking account, you’re separating your business funds from personal funds. Separation of funds helps protect you from liability if someone sues your company.

Co-mingled funds are also a huge red flag for the IRS. Here is why you should have two different accounts:

• Deducting Startup Expenses: You can deduct startup costs from your business during your first year.
• Claiming Business Expenses as Deductions: If you use a business account, you capture all business income and expenses in that account. Much easier during tax time. 

• IRS Audits: If you co-mingle your funds, the IRS might deny deductions and business losses if your accounts aren’t separated. 


The fees to open a business banking account can vary. Shop around for a business banking account.

Below are several types of financial institutions that offer business accounts:

• Credit Unions: This could be an excellent option to start. Sometimes, Credit Unions are inexpensive, with lower fees and competitive rates. But you should still shop around. Some have pricing models as high as larger institutions
• Smaller Community Banks: A similar scenario to Credit Unions. Depending on your business, developing a “local” banking relationship could be essential. Expanding your network is never a bad option. Several local banks in my city put on networking events for businesses and entrepreneurs
• Online Banks: If you’re happy going online, you may find lower prices and attractive lending rates. However, you give up the personal relationship and potential networking opportunities
• Institutional Banks: They’ll have every service you need and then some. Don’t shy away because you think they might have higher fees. Sometimes, the more volume, the lower the fees.

• Square
• Paypal
• Google Pay
• Apple Pay
• And others

Let me give you a few other considerations on your finances. I’ve read many books, blogs, and resources. I’ve sat down with my financial adviser and accountant. I didn’t start this way but have transitioned into a systematic approach to my finances.

The MOMENT revenue comes into your business account, do this:

• Automate a 10% immediate transfer into a personal savings account
• Automate a percent transfer into an account for taxes (know your state and federal tax rates)
• Allocate or pay your fixed operating expenses
• Allocate an amount to build up your business cash reserves
• Allocate a percentage to contribute to your pre-tax retirement benefits
• Anything left goes to salary, personal development, or re-investment in your business

General statement on expenses:

I don’t know your situation or business. I don’t know what you’ll need. However, I’ll provide a list of expenses you may encounter. Differentiate between needs versus wants. What do you NEED to start up? What can you purchase later when you have more cash flow (wants)?

A note on startup expenses:

In the US, you can write off (deduct) some startup expenses or expenses incurred before formally starting your coaching business. Speak with your accountant to ensure you deduct the correct expenses and don’t miss anything.

Keep good records and your receipts right from the start.

I’ll do my best to provide the expenses most coaches will encounter, but your startup costs will depend on you.

• Equipment: Equipment lasts longer than a year. Typically, this includes your computer, extra monitors, an all-in-one printer, and a work vehicle (if required).
• Supplies: Business Supplies you typically consume within one year. These include furniture such as your desk and chair, paper, pens, printer ink, paper clips, etc. Supplies are low-cost items but can add up over time.
• Real Estate: Your real estate expense will depend on your business and needs. Keep these expenses as low as possible. You have several options. Work from home, a coffee shop, or a bookstore if possible. Consider using a “day office” or co-working space when you need an office. Companies like Regis offer offices you can rent by the day.
• Insurance: Speak with an insurance broker for your specific needs. In general, most businesses will require General Liability Insurance. You might consider an Umbrella Insurance policy as well. I’d speak with your broker to determine if you need Errors and Omissions insurance (E&O). This type of insurance covers claims made by clients for inadequate work or negligent actions.
• License and Permit Fees (Regulatory, Country, Federal, State): As previously discussed, you need to research any licensing or permitting requirements. Based on your needs, there will be startup and ongoing expenses.
• Incorporation and Filings (Regulatory, Country, Federal, State): Please incorporate. Don’t go into business as a Sole Proprietor.
• Contractor Expenses: Do as much as you can on your own. You may need to hire a freelancer to perform services. Contractor Expenses could include a Virtual Assistant, a Web Site Developer, Marketing Services, Logo Designers, etc.
• Website & Domain: Do NOT go into business without a website. Social Media sites alone (no website) won’t help you in the long run. No matter what, you’ll have a startup and ongoing expenses to keep your website up and running, plus secure a domain name. If you don’t have a domain yet, you can join 2 Million+ people that use Namecheap as their domain provider. You can use a DIY website service as Weebly. Or, you can create a WordPress website which is easier than you think if you use a provider like BlueHost.
• Professional Services (Legal, Consulting, Accounting): If you haven’t figured it out by now, I highly recommend using local legal and accounting services. Using a company like Freshbooks can help reduce your bookkeeping expenses and LegalZoom for your legal needs.

• Certified Coaching Training Program (learn more)
• Self-Study Executive Coaching Program (learn more)

Also, the International Coaching Federation developed a Training Program Search Service (TPSS) to help you find approved and some of the best life coach certification programs.

Are you required to have a coaching certification?

No.

Could you still be a successful coach without one?

Yes.

However, will a certification add to your creditability?

Sure.

Many cities or states require at least a general “business” license for business licenses. Even if you’re a Sole Proprietor, don’t make the mistake of operating a business without checking local and state laws.

If you plan to work from home, research zoning laws. Some cities restrict the type of work you can do from a home office.

You can find resources through online research, a local lawyer, and industry associations. Don’t let a simple regulatory or compliance mistake stop your coaching business.

Business insurance for most coaches won’t be different from any other business. Whatever you do, don’t skip purchasing insurance. Without insurance, you could find yourself in financial trouble.

We live in a litigious society. People sue for anything. I’m not saying this to scare you. I’m stating the importance of carrying insurance.

At a minimum, you’ll need to have liability insurance. But, if you run your coaching business out of your house or use your car, you’ll need to consider separate coverage options.

From there, your insurance coverage will be a personal decision. Just like your business account, shop around.

Each insurance agent you speak with is an opportunity to learn more about what you really “need” versus what they are trying to up-sell. If you know anyone that’s a coach, ask him or her for recommendations.

Purchasing health insurance is a lot easier than most coaches think. You already know the names of major health insurance companies. Most of those companies have individual policies. If you have a spouse and children, they’ll also have plans to cover them. Go to their websites and do a little research.

In the US, you can also explore healthcare.gov. However, I have no idea how long that will continue. Plus, I found my health insurance was less expensive working directly with my insurance provider and not using healthcare.gov.

Trade and Industry Associations sometimes have healthcare information as well. Freelancers Union offers healthcare insurance. You can also find specialized agents through the National Association of Health Underwriters.

According to a US poll conducted by Greenberg Quinlan Rosner Research in 2016, 40% of solopreneurs (some were coaches) don’t have a retirement plan.

Don’t be in this group. Speak with your financial adviser and accountant. Set up a retirement account, even if you can only contribute a small amount for the first few years.

If you’re in the US, I’ll list two options for you to research, but speak with your financial advisor and accountant.

• Solo 401Ks – Also called One-Participant 401(k) Plans by the IRS. According to the IRS: “The one-participant 401(k) plan isn’t a new type of 401(k) plan. It’s a traditional 401(k) plan covering a business owner with no employees or that person and his or her spouse. These plans have the same rules and requirements as any other 401(k) plan.” Find detailed information on Solo 401Ks on the IRS Website
• SEP IRAs – Again, the IRS definition is: “A Simplified Employee Pension (SEP) plan provides business owners with a simplified method to contribute toward their employees’ retirement and their retirement savings. Contributions are made to an Individual Retirement Account or Annuity (IRA) set up for each plan participant (a SEP-IRA).” Find detailed information on the IRS Website.

What’s the biggest mistake coaching make when running their business?

Let me be frank and excuse my language a bit. You WILL get kicked in the ass if you don’t set aside money for taxes.

You’ll be rolling along, having a great year, thinking, “Damn, I made $120K this year! I have a 6-figure coaching business. Freaking amazing!”

Then, boom! It’s tax season. But wait, you forgot to set aside money for taxes.

“I owe what in taxes? Oh sh*t! I’m short.” Your cash flow is crushed. Your bank account is empty. “Mom, dad, friend, brother, sister … can I borrow some money?”

Your mistake … you generated a “pre-tax” revenue of $120K. THIS IS NOT NET INCOME! If you don’t plan, set up your accounts, and automatically set aside part of your revenue for taxes, this can literally put you out of business. Done and dusted.

This mistake happens all the time when someone transitions from employee to entrepreneur. Don’t make this mistake.

Again, talk with your financial advisor and accountant. Set up a bank account that, if possible, automatically transfers a certain % for taxes into a separate account.

The moment revenue drops into your business account, transfer funds into separate accounts for taxes, savings, retirement, etc.

Cash flow, or the lack thereof, can destroy your dreams in a flash. Know your cash flow inside and out. Keep your cash outflows as low as possible. You need to develop a system to track your cash flow from day one. Score has a 12-month Cash Flow Template that you can use.

Here’s a dilemma you might run into. Let’s say you accepted monthly payment plans to close a few clients. Those payments come into your account on different dates throughout the month. But, you have several significant business expenses that land around the same date of the month.

All of a sudden, the “timing” of the money coming into your bank account versus the timing of the money going out of your bank account is off.

You have more cash flowing out of your account than going into your account.

If you can’t come up with the money to cover the expenses, your business could collapse right before your eyes.

Tracking payments and cashflows and understanding your business expenses are key to your success. Again, I’d highly recommend considering software such as Freshbooks to help automate this process.

You’ll need support, but not necessarily employees.

When you start a coaching business, you’ll wear different hats: CEO, CFO, CMO, COO, Head of Sales, etc. However, just because you’re a solo entrepreneur doesn’t mean you can do everything.

It’s not advisable.

Track your daily tasks. Assign dollar-per-hour increments to every task you perform. Once you build up some cash reserves, find freelancers, software, or automation to support your business.

Here’s an example to illustrate my point. You can choose your own $/hour increments but think about it this way.

• Highest Priority – A task that costs or generates $1000/hour - Do it yourself
• Medium Priority – A task that costs or generates $100/hour - If possible, do it yourself at first
• Low Priority – A task that costs or generates $10/hour - Immediately delegate to a freelancer or find a way to automate

• Manually posting my content on each social media channel, $10/hour task –> Automation through Buffer
• Logo Design, $100/hour task –> Hired a Freelancer
• Strategy Sessions & Sales Calls with Prospects, $1000/hour task –> My highest priority

From writing to graphic design and even bookkeeping, you can find freelancers on Fiverr or upwork that can perform almost any task you need.

Conduct “video” interviews and consider a tryout period when hiring freelancers. Most importantly, provide exact instructions and detailed information on the final product you expect.

Ask around in your network and social media if you want to delegate a high-quality task. Sign a contract that clearly states the scope, terms, and expectations.

Last, in the US, there are IRS and contractor compliance requirements. These requirements are designed to protect the contractor and you. Ensure you read over the compliance requirements from the IRS website.

Seek legal advice if you have any questions.

You need to be able to explain your coaching business to yourself before you try to explain it to anyone else. It’s your business. It’s your coaching business plan. Write it yourself.

Start with the simplified business plan discussed below, then add more details as you progress.

Alex Genadinik has written 20 books and produced over 100 business courses, including a few best-sellers on business plans. Alex has a simplified “3-Sentence Business Plan.”

Write detailed answers to these questions:

• What is my product or service?
• What steps do I need to take to grow my business?
• How will I finance my business during the startup phase?

How much should I charge for coaching? This is a question I hear all the time. You get all sorts of answers but no real explanation for pricing coaching services.

Life coach pricing or any other type of pricing for coaching can be difficult. But, hopefully, I can clear that up a little below.

You are well on your way to starting your coaching business. It’s time for you to “Become the Cause” of your success.

I really appreciate all of those people that have shared this article! That’s a huge sign they found this article useful! Thank you so much!