How to Invest Wisely in Your Coaching Business

Let’s get real about money. As the saying goes, “It takes money to make money,” which is absolutely true, and resisting investing the money needed to build a successful business results in frustration and failure.

How much do you want to earn this year?
How much do you want to earn next year?

In the startup phase of your new coaching business (first two years) expect to invest up to 30% of your desired income goal in your business. Once established, 10-20% should keep it humming.

So let’s do the math, if you’re in the startup phase of your business and want to earn $50,000.00 this year, you will need to invest at least $15,000.00 PER YEAR in your business. Not doing so will handicap your efforts and sabotage your goals.

Joining RCI might be a significant chunk of that first year investment, and the rest is needed for the tools and support needed to get effective results for your marketing, enrollment, and service delivery to build a thriving coaching business.

Investment vs. Expense

An “expense” is money you have to spend and will never see again, such as paying your rent, phone bill, etc. An “investment” is money you choose to spend to generate a return of some kind, in this case, to build a business that will provide you financial security and freedom.

You MUST invest in your business, otherwise you will starve it and won’t achieve your business goals and dreams.

However, you need to invest wisely. New businesses fail when they spend too much or too little. Money is wasted when spent on the wrong things at the wrong time. For example, you may be excited about your first speaking gig and want to set yourself up for success, but buying a $5,000.00 suit to look successful wouldn’t be as good an investment as hiring a speaking coach to help you succeed as a speaker.

So you need to invest in your business, but on what? How much to spend? How do you know if your investment will generate effective results for you?

How to Get Effective Results

It’s imperative that you be able to get paying clients, otherwise your business dreams will fail. If you expect people to pay you significant real money, you must have a well-designed business plan and implement your business plan to get effective results.

Can you get effective results all by yourself, without expert help? No.

Can you get effective results by doing everything free and cheap? No.

Can you get effective results by implementing what looks good to you? Sorry, but No.

Getting effective results requires:

  1. Designing your business and marketing to strongly resonate with your target audience.

You must remember that YOU are not your target audience, so it doesn’t matter if YOU like something. Market research and getting direct input and feedback from your target audience is critical to your success.

And if you’re not clear enough about your target audience, or too vague and broad about your niche (same as “target audience), your marketing will fail.

  1. Effective implementation

Simply completing a task is NOT as important as the effectiveness of that task.

Anyone can fill in the blanks and post their professional profile on the internet in 10 minutes, but for that profile to effectively generate prospects and clients, it needs to strongly resonate with your target audience (see #1 above).

As you build your coaching business be sure you’re focused on completing tasks that will be effectively implemented to get the results you need to be successful. Since we all procrastinate and get excited by shiny objects, this is easier said than done.

  1. Requesting, listening, and responding to feedback

As mentioned in #1 above, designing your business effectively for your target audience is key, and requesting their feedback, listening to their feedback, and responding to their feedback in your business activities will guarantee your success.

On the other hand, not requesting their feedback, not listening to it, and being more enamored with what looks good to you rather than what gets results with them, will guarantee your failure.

Requesting feedback from your colleagues and mentors can be helpful, but not a substitute for market research with your target audience.

The Law of Attraction Rewards How You Show Up

How do you “show up” in life?

Do you allow fear to hold you back or do you “feel the fear and do it anyway?”

Do you expect everything to conform to your “shoulds” or do you accept and adapt?

Do you stay within your comfort level or do you take risks?

Are you convinced you know what’s right or are you open to what really works?

Do you walk your talk as a coach, or just expect others to pay you for your talk?

Here’s a few alarming (and all too common) things we’ve observed about how some new coaches “show up:”

  • They want to be paid for their coaching but resist hiring their own coach.
  • They expect to build a successful business without investing the time, money, and effort needed.
  • They firmly believe they know how best to “coach” clients and resist our training and feedback about their coaching skills.
  • They firmly believe they should be handsomely paid for their services because they’re smart and passionate, regardless of the quality of their skills or response from their target audience.

Do you watch TV shows like “American Idol?” Everyone laughs at the horrible singers who strongly believe they have deserve to win over all the other truly talented singers, and everyone cringes when a singer responds defensively, even angrily, when they are given feedback that doesn’t fit their inflated view of themselves.

So how do YOU show up? The Law of Attraction is real, powerful, and rewards how you show up, not to what you want, need, expect, or think “should” happen.

How Fast or Slow?

We all want fast results and it’s certainly possible in our experience, but the hard part is that it seems to never happen if fast is the goal. Fast results seem to be a fortuitous combination of timing- the right person, executing the right strategy, to the right audience, at the right time.

Going slow doesn’t work either. You can spend a lot of time and effort getting everything perfect, and still not get the result you seek.

Since we can’t guarantee ourselves or anyone else “fast” or “slow” results, what to do?

Here’s one of our favorite sayings- “Sometimes in life, the short way is the long way and the long way is the short way.”

So don’t take shortcuts and don’t make “fast” your goal.

We suggest taking the time and effort to create an effective business plan, do your best to make effective business decisions, leverage your time by getting help, and hedge your bets by getting input and feedback from your colleagues, mentors, and target audience. This might seem like the long way, but in the end it’s the shortest possible route to success and you might be surprised how fast things happen.

Investing Wisely

So if you agree with the need to invest in your business, how do you invest wisely?

Money, by itself, will not solve problems and get results. A higher price tag does not result in higher effectiveness.

Here’s some guidelines we’ve learned the hard way:

  1. Use the 90/10 Rule and focus on where you are right now: We’ve organized RCI’s Coaching Business Success System™ to follow the steps needed to progress through four stages of business development- Student, Apprentice, Practitioner, and Master Practitioner. We strongly recommend spending 90% of your time, efforts and money focused on progressing through the steps where you are right now in your business development, and 10% on those fun, cool projects that excite you but are future-oriented. For example, publishing a book is pre-mature if you haven’t completed your training, don’t have any paying clients, and you don’t have the experience and income of a real coaching business (David’s first book Conscious Dating was published 8 years after he completed coach training and built a successful business helping singles).
  2. Mentoring: There are many people happy to take your money to help you even if they know nothing about your business, but after decades of experience we can tell you to ignore the promises and flash, your best mentor is someone who has accomplished what you want to accomplish and has successfully helped others to do so. Ordinarily this can be hard to find, but here at RCI, for a relationship coach, it’s easy.
  3. Business Tools: We need many tools to run our business, such as accounting software, contact management system, website, auto responder, scheduling system, payment system, etc. There are typically many options and opinions for each tool, so which do you choose? It is a mistake to choose the cheapest option unless it is also proven to be the most effective option for your needs. We advise seeking recommendations from those who are in the same industry and are successfully implementing the tool you’re considering. If it works for them it should work for you, and you can always model them. Again, this is easy here at RCI.
  4. Business Development Programs: We know many high-priced programs with big promises that look and sound really tempting, and we’ve seen many RCI members ignore the support and resources here at RCI to pay for those high-priced programs, only to be disappointed and waste their money. We are not at all opposed to RCI members participating in other business development programs, but to prevent wasting your money, we strongly recommend leveraging your RCI membership resources and programs first. After all, as with “Mentoring” above, the best business development program (or mentor) has a successful track record in your industry, in this case, relationship coaching.
  5. Business Strategies: You can waste a lot of money with online advertising, book publishing, podcasting, designing, marketing and conducting webinars/workshops, etc. How can you invest your time and money effectively? How can you know which business strategy would be most effective for you? We’ve seen too many RCI members decide to try something and fail, and THEN ask us for help. We strongly recommend requesting our input on your business plans BEFORE you decide to implement them and we can save you a lot of time, money, and frustration. Any decision about business strategy needs to consider your unique situation, so any good recommendation will be informed by knowledge of your talents and skills, your niche/target audience, your business plan, business goals, marketing funnel, service delivery system, etc.

Conclusion

Are you willing to do (and invest) what it takes to build a highly successful coaching business?

Here’s what it takes (in our experience):

Willingness to be persistent, patient and follow the 90/10 rule

Willingness to invest effectively (see above guidelines)

Willingness to ask for help and support

Willingness to let go of ego and pre-conceived beliefs to learn embrace what really works

Willingness to show up, play large, and take risks

Willingness to learn the skills needed to be successful, both as a coach and business owner

Absolute commitment to get through the periods of frustration and self-doubt

So we ask again, are you willing to do (and invest) what it takes to build a highly successful coaching business?

If not, give up now. If so, we applaud you and are here for you.