Do you have great people skills and love the satisfaction of helping others succeed? A life coach builds a business out of helping others overcome challenges and achieve goals in their professional and personal lives. If you’re interested in learning how to start a life coaching business, this guide can help you make your way toward a satisfying, successful career.
Benefits of Opening a Life Coaching Business
With little more than a home office, a computer, and a smartphone, you can set up your own schedule and achieve the right work-life balance as a new coach. Along with a solid business plan and some marketing know-how, you can launch your business on a shoestring.
The earning potential is there, too. With a typical annual salary range of $27,019 – $210,933, life coaches earn an average of $61,900.
Being a life coach comes with another perk. As you coach clients toward their goals, you get the satisfaction of helping people achieve their potential.
How to Start a Life Coaching Business Checklist
Follow these steps to start your life coaching career.
Checklist for How to Start Your Life Coaching Business:
- Create a Business Plan
- Choose a Business Structure
- Determine Your Business Costs
- Name Your Business
- Register Your Business and Open Financial Accounts
- Purchase Equipment For Your Life Coaching Business
- Market Your Life Coaching Business
1. Create a Business Plan
With over 53,000 life coaches worldwide, coaching is a growing, competitive industry that’s expected to top $1.34 billion by 2022. How will you make your mark?
Writing a business plan is like drawing a roadmap that helps you understand:
- The products and services you’ll offer
- How you’ll find customers and determine your target market
- The goals you’re aiming for
- The niche you’ll specialize in, such as personal issues, career goals, or health and wellness changes.
Plus, if you seek outside investment to start or grow your business, your plan can help you convince investors because it clearly outlines your intentions and goals.
Your life coaching business plan can also include SMART goals, competitor profiles, and market analysis. Think through pricing too, such as setting monthly fees (usually $200 – $1000) to meet 30-60 minutes, three times a week.
You can also brainstorm your ideal life coach customers, and draft a marketing plan to help you find them. Making this plan now will help you plan for the unforeseen and avoid common, costly mistakes other first-time business owners make when rushing to get started.
2. Choose a Business Structure
A sole proprietorship is good for low-risk businesses like a coaching business, especially if the company is mostly virtual. Depending on your state, there may be no setup cost, and only a small amount of paperwork to file.
However, an LLC can provide personal asset protection to business owners. If the company goes bankrupt or gets sued, your personal assets won’t be at risk. Your cost for applying for an LLC varies by state, and there are typically annual filing requirements, but the benefits can easily outweigh the expense.
Whatever entity you choose, you can set it up yourself or you can work with a business formation company to streamline the process.
3. Determine Your Business Costs
You can start a life coaching business on a budget, especially if you run the business from home and already own a computer with internet access.
Average startup costs range from $5,000–$15,000, which may include one-time costs such as:
- Initial training and certifications
- Desktop or laptop computer
- Website design
- Domain name registration
Recurring costs may include annual dues to a coaching trade association, monthly internet access, insurance, website hosting, and payroll or invoices for employees or contractors such as graphic designers and assistants.
An accountant or bookkeeper can advise you on tax deductions, quarterly and/or annual taxation, and how different business structures may impact those business taxes.
How do you fund your startup costs?
If you need capital to help you start your coaching business, here are some options to consider.
Grants can provide funding that doesn’t have to be paid back. Grants.gov lists federal grants that may be available to small businesses. Make sure you fully understand the requirements and application, and prepare yourself for a process that can take some time.
Other options include bank loans or private loans from friends and family. However, with just 17,500 coaches, the American coaching industry is still relatively small and potentially not well understood. Investors may want you to explain what a life coach is and how your business will turn a profit.
For equipment or routine purchases, such as a laptop and office supplies, a business credit card can help you build your company’s credit and spread out payments. Be wary of high interest rates, and be strategic about paying down any debt.
4. Name Your Business
A business name that’s easy to understand and reflects your brand can help make a good first impression with potential coaching clients. Consider referencing coaching in the title. Names like “Gracious Guidance” or “Bright Beginnings Coaching,” for example, offer instant recognition.
Before picking a name, check its availability. States may not allow multiple businesses to have the same name, so visit the secretary of state’s website and conduct a name search. If your chosen handle is up for grabs, also look into domain availability and social media accounts for it. At the same time you file your LLC formation paperwork, you could also register your domain and reserve social media handles.
5. Register Your Business and Open Financial Accounts
Before you can coach your first client, shore up any required business registration and licensing. After registering your coaching business, visit the IRS website to obtain an employer identification number (EIN). The main purpose of an EIN is to pay taxes, but you’ll also need it to open bank accounts for your life coaching company as well as any bank loans.
For additional credibility, consider getting certified by a life coaching trade association. Different coaching certification programs are available through groups such as CoachU and the Institute for Professional Excellence in Coaching.
While a life coaching business can be low-risk, insurance provides a safety net for unforseen circumstances. Consider talking with a local insurance agent about the right coverage for your coaching business, equipment, and home office.
Your life coaching business will also need business bank accounts that are separate from your personal accounts. Keeping business and personal finances separate makes it easier to file taxes and track the overall financial health of your coaching company.
6. Purchase Equipment For Your Life Coaching Business
Setting up a life coaching business doesn’t require a lot of equipment. You’ll need a home office, such as a dedicated space where you can focus on your work and have privacy during coaching program meetings with new and potential clients.
A lot of life coaches offer video or phone sessions, so a strong internet connection, cellular access, and/or a business landline can be essential. A headset will keep your hands free so you can make notes.
Also consider using a teleconference service such as Skype, Zoom, or Google Hangouts, for a more reliable and clear online connection. What other gear will you need? Here’s a list of additional equipment that some life coaches use to start and run their life coaching businesses.
7. Market Your Life Coaching Business
Marketing a life coaching business can be a challenge because instead of selling a tangible product, you’re selling an outcome.
As you create a marketing plan, focus your messaging on the training programs that you offer. For instance, rather than buying generic ads for life coaching services, sell people on climbing the corporate ladder, losing that last 30 pounds, or achieving financial independence.
Social media engagement, online webinars, or hosting a podcast can market your business and introduce people to the benefits of working with you as their life coach. Consider social media giveaways too, such as a free 30-minute coaching session awarded through a Facebook or Instagram campaign.
For other ideas, follow industry-leading coaches like Lucinda Bassett or Jay Abraham on LinkedIn. There are also resources that explore social media specifically for life coaching in the COVID-19 world.
Word of mouth is a common way for people to connect with life coaches. Consider setting up a rewards program to keep referrals rolling in, and ask your customers to write testimonials of your work that you can display on your website.
As your client base grows, specialized software such as Coaches Console and Life Coach Office can help you streamline scheduling appointments, hosting webinars, emailing leads, and tracking a client’s progress.
Examples of Life Coaching Businesses to Start
Wherever someone wants to improve their life, that’s an opportunity to find a coaching niche to specialize in, such as:
- Mindset and accountability coach
- Health and fitness coach
- Small business coach
- Relationship coach
- Career coach
- Parenting and family coach
- Executive coach
Achieve Your Goal of Running a Successful Life Coaching Business
A life coaching business can be a low-risk, high-reward path to profitability in a growing industry. The startup costs are low, and you can even start your company from your home. With a comprehensive business plan, a specified niche, and methods to attract and retain customers, you could be on your way to achieving your goal of running a successful coaching business.
Life Coaching Business FAQs
- Where should I incorporate my life coaching business?
To incorporate your life coaching business, you can research the proper paperwork and file it yourself, or you can work with a business formation company to simplify the process.
- What are the biggest challenges to starting a life coaching business?
While finding clients can certainly be difficult, some life coaches say the biggest challenge is staying emotionally unattached. Your job is to provide guidance and let your client choose their own path, not make decisions for them.
- Where can I get money for my life coaching business?
- Is a life coaching business profitable?
Like all businesses, it may take time to build a list of clients, but the company can bring in profits. The average income for a life coach is $61,000, but it can go as high as $210,000 per year.