Refine your niche
Life coaching might seem like a small enough niche, but it’s still a very broad category. Focusing on a particular area of life, problem or type of client helps you specialize. This strategy might seem like you’re leaving out lots of potential clients, but choosing a niche is often the most profitable option. It establishes you as an expert in that niche, which helps you attract more people who fit the category. You can also be more effective when you become proficient in working with that target group.
Some life coaching specialties include:
- Manifestation and abundance
- Life purpose
You might choose to work with a certain type of people, such as moms or business owners. Then, you can niche down to the common solutions that life coaching can provide for that type of client. For example, you might help moms create plans for reentering the workforce or defining their career or business goals after having kids. Or, you might help small business owners master manifestation and an abundance mindset to help them grow their businesses. Knowing your target clients also helps you tailor your marketing.
Create a business plan
When figuring out how to start a life coaching business, your business plan is your guide. Your business needs one, as the document lays out your goals and the steps and strategies you’ll use to reach them. It gives you a framework for growth and helps you make business decisions.
Common parts of a business plan include:
- Executive summary
- Description of your company
- Market analysis
- Organization and management structure
- Description of products and services
- Marketing and sales goals
- Funding sources
- Financial projections
Using a business plan template is an easy way to develop your guide when starting a coaching business. You can customize the template with your details as you refine how you want your coaching business to operate.
Choose your business structure
The structure you choose affects many aspects of your business, including your personal liability and how you pay taxes. Choosing your business structure and registering your business name are part of officially establishing your business.
Common business structures include:
- Sole proprietorship: This option is for individuals and doesn’t separate you from the business. That means there’s no separation between business and personal assets and liabilities. You don’t have personal liability protection, and you pay personal taxes for your business.
- Partnership: If you plan on starting a life coach business with someone else, this is a simple structure option. This structure also has unlimited personal liability for the business unless you choose a limited partnership.
- Limited liability company (LLC): Forming an LLC offers personal liability protection and tax benefits, and it can be owned by one or more people.
- Corporation: Corporations are another option that keeps the business separate from the owner, which offers you protection from personal liability. There are different types of corporations. They typically cost more to establish than other structures and require more reporting and record keeping.
If you don’t know which structure to choose, consult with a business attorney. They can help you understand the differences and recommend the best structure based on your goals for your coaching business.
Handle legal issues
Another important part of determining how to start a life coaching business is ensuring you meet all legal requirements. Each state and even some cities have specific procedures for registering a business. The business structure you choose can affect the steps you need to take to establish and run your business.
Check with your state’s department that governs businesses and corporations. Determine how you can register your business and form the type of business structure you choose. If you plan to start your coaching business from your home, verify that your state allows home businesses.
You may need to get a business license or permit to run the coaching business. General liability insurance is also important for all businesses, including coaching businesses. Additionally, you’ll need an employer identification number (EIN), which identifies you as a business entity for tax purposes.
Separate your business from your personal life
Some business structures force you to keep everything separate from your personal life. But others offer more gray area. A sole proprietorship isn’t really separate from you personally, for example, so you could use your personal bank account for the business.
However, creating a separation even if it’s not required makes it easier to manage and track your business activities. Open a business bank account before you officially start your business. This allows you to keep the business money separate from your personal funds to ensure it’s used properly. You can also eaily track your expenses and income to make tax time easier.
Having a separate phone line, even if you work from home, establishes a more professional feel. This allows you to create a business voicemail message, and it’s easier to track the incoming calls for your business. Create a business email address as well to make communication with clients easier and to maintain a professional appearance during communications.
Determine the necessary tools
While you don’t need much to start a coaching business, having a few tools available makes it easier to run your business. Scheduling software simplifies the process of booking coaching sessions with your clients. You can easily see available openings and check your schedule at a glance to prepare for upcoming appointments.
If you plan to do virtual coaching, choosing a reliable video conferencing platform is also important. Test different platforms to find your favorite, and practice with it to ensure you can use it effectively during sessions.
You’ll need a way to invoice clients and accept payments. PayPal and Square are two simple options that you can use. You’ll also need accounting software or some type of system to track your business finances for tax purposes.
Having a contract provides some protection when working with clients. The contract might include things like the required commitment, disclaimers, rates, payment methods and other important factors. It can also include your refund policy or a statement that you don’t offer refunds. Have your attorney review the contract.
Establish your services and pricing
Get specific with the life coaching services you offer. You might create coaching packages with a certain number of sessions, for example. Decide if you want to hold the sessions in person or virtually. Other possible life coaching services and products include:
- Online courses
- Small-group programming or masterminds
- Membership sites with general life coaching advice
- Workbooks or e-books
Once you list your services, you can determine pricing for each service type. This can be a little more challenging than pricing physical products because you don’t have material costs to consider. Think about the hourly wage you want to earn as a life coach, and the overhead costs you need to cover. The average rate for life coaching is $120 per hour, with a typical range between $75 and $200 per hour, according to Choosing Therapy. This gives you a baseline for setting your prices.
Create a marketing plan
A solid marketing plan helps you promote yourself when starting a life coach business. Begin by establishing your branding, which guides your marketing efforts. Your branding incorporates everything that makes your business unique, including your overall style, color scheme, graphics and wording. This branding should show through every interaction you have with others.
Determine which marketing avenues you plan to use for your company. Options include:
- Traditional print advertising
- Radio ads
- Social media networking
- Paid social media ads
- Referral programs
- Local networking
- Email marketing
- Content marketing with SEO
- Speaking engagements
- Collaborations with other businesses
Most businesses use multiple marketing channels to maximize their reach. Start with a few options and experiment with them to make them more effective. Track the results to determine which methods bring in the most coaching clients, so you can focus your efforts there.
Grow your business online
Being active online helps you reach more potential clients, especially if you offer virtual services or things like online courses that clients from anywhere can use. Your coaching website is the hub of your online presence. It should be professional and easy to navigate with specific details about your services, including the options and pricing. Share your credentials and testimonials from current clients as well.
Starting a blog as part of your website can help you capture more traffic. Write informational blog posts about life coaching topics that your potential clients might search for online. Incorporate relevant keywords that someone who wants your services might enter. An example is “mindset coaching for small business owners.” Research keyword search volume to identify ideal keywords.
Social media platforms offer another way to grow your online presence. Social media accounts are free, and business accounts on most platforms come with insights that help you track your engagement and other statistics. Use your social media accounts to share life coaching information and interact with current and prospective clients. This gives you a chance to showcase your experience, establish yourself as an expert and build relationships with people who are interested in your services.
Starting a life coaching business FAQs
Is it expensive to start a life coaching business?
You can start a life coaching business on a relatively small budget since you’re not creating a physical product and you don’t need much equipment. A computer is your primary business tool, so you can manage your website and online presence and schedule appointments with clients. You might use the computer if you offer virtual coaching as well. If you do in-person coaching, you’ll need a dedicated space, which could be a room in your home. You might need a desk and seating for the space. If you choose a commercial space, you’ll also have the cost of a commercial lease, which can vary significantly based on your location and the size of the office.
Do you need a license to start a life coaching business?
Life coaching is an unregulated business, meaning there aren’t any degree or licensing requirements. Anyone can call themselves a life coach and start a business. However, having a background in counseling or psychology gives you credibility and can help you promote your business and attract clients. There are life coaching certificates you can earn that can add to your credibility. Research the organization offering the certification to ensure it offers a high-quality program. You can also join professional organizations, such as the International Coaching Federation.
What are the challenges of starting a life coaching business?
Finding a steady stream of clients when you’re just starting can be a challenge. It often takes time to establish a client base and earn word-of-mouth referrals to grow your business. Being consistent and providing exceptional service to every client helps with this. Even when you start attracting lots of clients, there can be fluctuations, including times when you have a lighter schedule and a lower income. Preparing for these ebbs and flows can help you survive financially. You also have to balance guiding your clients without making decisions for them. It can be tempting to tell clients which path is the best, but your job is to give them guidance without choosing for them.