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Many of us are seeking out independent advice on how we can improve our lives or our businesses. If you can provide practical advice and guidance to help people change their perspective or their business practices, you could have the makings of a great coach. Whether you decide to go into life coaching or executive and business coaching, there are plenty of excellent opportunities in this growing industry.
The value of life and business coaches is supported by the statistics. If you know what makes people or organizations tick, you could turn that into pragmatic steps and help people reach their potential. It’s important to set up your life or business coaching company in the right way.
Life coaching is about helping people deal with what’s going on in their lives and assisting them in creating a better present and future. It involves a mix of psychology, counseling, interpersonal skills and understanding how you can help a client realize their potential.
Here are some statistics on the power of life coaching businesses:
Generated annual revenue in the U.S., Self-improvement as a whole is a very successful sector.
Generated revenue of life coaching in the U.S. each year, and this is expected to grow to around $1.3 billion in 2022.
Average yearly income for life coaches a year, and some coaches can earn over $100,000 a year.
Business and executive coaching is very different from life coaching. When you’re working with senior management, you need to have an excellent understanding of business, strategy, financials, organization, culture and the unique pressures that face executives when making major decisions.
Generated revenue of Business Coaching in the U.S. a year.
Number of business coaching organizations in the U.S. employing over 100,000 people
This is why life or business coaching ventures are so exciting — how can you be part of that success? We're here to help you figure that out.
Although it can be exciting to become a life or business coach, there will be significant demands on you. Here are some of the things you can expect.
Here are some of the typical tasks you’ll be performing on a daily basis:
The following skills will be very useful in your role as a life or business coach:
Ultimately, people come to a coach because they want to improve their life or business.
Remember, the ideas above are just a starting point. You can define and tweak exactly what type of life or business coach you want to be through conducting your own research.
Not every idea you have will make it through to becoming a coaching business. There are all sorts of reasons to say “yes” or “no” to specific businesses, so think about what your strengths and weaknesses are so you can choose a business you’d be great at.
You need to define how you’re going to run your coaching business, market yourself, get sales, make a profit and grow. This can only come about through creating a watertight business plan. It will help you get your thinking in order and show your commitment to your life or business coaching company.
You will need to look at financial projections for your coaching business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others?
Business plans do vary slightly, but they should all cover the following areas:
We’ve got the perfect guide to writing your business plan.
There are five main business structures you can have in the U.S., and it’s important to choose the right one. We’ve shared your options below. They are:
This is the "default" business structure and is what your life or business coaching venture will be if you decide not to create a more formal structure. We don\'t recommend this type of business as it doesn't give you the legal protections you need.
This is a type of business that is formed when two or more people work together without creating a more formal business entity. Like a sole proprietorship, it may not give you all the protections your life or business coaching organization may need.
The Limited Liability Company (LLC) is ideal for most life or business coaching startups. An LLC is easy and inexpensive to set up, and has the least administrative requirements of any formal business entity.
This is a more complex type of business and isn't generally recommended for smaller organizations.
These are the largest and most complex types of businesses and are typically far more than the average entrepreneur will need.
For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your coaching business.
In most cases, our recommendation for a boutique business would be to create an LLC. We’ve got a complete guide to everything you need to do. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.
Once you've legally created your coaching business, you’ll need to get some other things in place.
Almost all coaching entrepreneurs can work from home, although you may need a dedicated space to meet with clients (or you may want to travel to their home or business location). This is great as it reduces your office costs considerably. Don't forget that if you work from home, you can write off part of your utility and housing costs against your taxes.
It’s likely that the only equipment you will need to run your life or business coaching venture is a computer, laptop, tablet or smartphone. You will also want to invest in a wardrobe that keeps you presentable for client meetings.
Marketing will be a huge part of your coaching business. Naturally, you will need an awesome website, but you'll also need to get branding, newsletters, digital ads, social media accounts and other channels in place.
Life or business coaching entrepreneurs make extensive use of software; see our great list of the top apps at the end of this guide.
To begin with, you probably won’t need to hire anyone else for your life or business coaching business, especially if you’re a good administrator.
It will likely help you to prove your expertise as a life or business coach with the right qualifications. Types of qualifications and certifications will vary depending on your chosen field.
You will need a separate business bank account for your coaching business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records to file business and personal taxes. Here at Incfile, we can even help you file your taxes.
Our Start a Business Checklist will get your boutique business going in the best possible way.
You will need to explore local, state and federal licenses and permits, and we can also help out with researching your business licensing needs.
Taxes are a fact of life if you’re in business, and there are various ways you will need to file and pay them. This can include self-employment tax, state income tax and federal income tax. Depending on where and how you’re selling products and services, you may also be liable for sales and use tax.
As a rule of thumb, we recommend holding back around a third of your earnings to pay your taxes. We can also prepare and file your tax returns for you.
There are certain forms and legalities you need to follow to keep your life or business coaching business in good standing.
Depending on the state you’re located in, you will probably have to file a report every year. This report tells the state about any major changes to your business, and we can file your Annual Report on your behalf.
You will be expected to pay estimated taxes on what you plan to earn in the current business year. Typically, you will need to pay estimated taxes in April, June, September and January (of the following year).
Your federal, state, regional and city licenses and permits may need to be renewed on a regular basis, typically once a year.
You will need to file your taxes once a year.
If applicable, you will need to make payroll and sales tax payments on a regular basis.
You will need to work with your accountant to prepare all the taxes you need to pay.
Most life or business coaching organizations should have comprehensive business insurance. There are various types.
Workers’ compensation insurance provides coverage for job-related illnesses, disabilities or injuries that affect employees. Regulations for this insurance vary from state to state. It typically covers areas like medical costs, loss of earnings, compensation and retraining.
This insurance protects your coaching business from claims due to being sued. This may include injury to members of the public, property damage, personal liabilities, legal defense and more. It can help protect your business from financial penalties and bankruptcy.
If you are working from home on the administration of your coaching business or driving a vehicle for work, check whether your existing home and auto policies cover you for work use of your home or car. If not, you should either expand your policy so you’re covered or get dedicated business insurance.
Here are some really great online tools for managing your life or business coaching business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.
Helping other people make positive changes in their life or business is an amazing service. If you can find a great niche, understand your competitors and put together a solid business plan, you will have every chance for success.Start your life or business coaching organization with us, today!