Understanding the Coaching Business Model

I would recommend a “coaching” type business model as a profitable methodology to grow your business. (This business model is a recurring revenue open ended engagement as opposed to taking a “one-off” fee)

The “coaching” business model is a slightly different concept to a “consulting” business model…it is more profitable because it is based on recurring revenue…and that is what I like about it…
Previously we discussed that consulting implies that you identify a problem that a client has and you propose a solution. Coaching is more about the introduction of a process so that clients can self-help. You act as a facilitator.

 

In reality, (please note here that the coaching institutes around the world will call me a heretic!) the more business and consulting experience you have then the more that you will interplay both disciplines in the one assignment. You will both coach and at the same time steer your client toward a solution that from your experience you know is probably the best option.
The more inexperienced and naïve your client the more you will be willing to provide a solution.

The more sophisticated your client and the more involved or complex the issues the more your will lead them through the processes.

In addition there will be times where you engage your client on an initial problem solving exercise and then turn this into a monthly ongoing coaching assignment.

 

…it is the model of coaching that is profitable

 

 

The important part about the model of coaching is that it can increase dramatically the profitability of your business. Let me explain. As a consultancy, you would normally need to build your practice by finding people with a problem that you could solve.

 

For example:
1. Do you need a business plan? We can solve your problem by charging you $5k-$20k.

2. Do you have people issues or compliance issues? We can develop a plan for $5-$20k.

 

In the above typical CONSULTING SCENARIO you need to:
a. Find a client with the problem.
b. Find a client that can be convinced to part with $5-$20k.

3. Find a client that is convinced you are the right person to solve the problem.

 

…Coaching broadens your market and has the perceived lower price

 

Coaching on the other hand broadens your entire market and offers you a different framework to market your services.
In coaching your marketing communication is all about..."Have you achieved what you wanted to achieve? In most cases the answer to this will be NO. That leaves you with the response (after identifying why)…”perhaps I can help by acting as a business coach.”

Your methodology then revolves around conducting business diagnostics, reporting on weaknesses and then developing goals and actions. From a billing perspective you bill on a regular monthly basis.

You provide regular management guidance that covers broader issues and problem solving along the way.
Business coaching charge rates

The typical charge rates vary from $500 per month to $3,000 per month.

 

 

How Do You Build a Relationship?

Let’s assume you have selected the right prospect group, one that is more likely to lead to profitable future consulting work.

STEP 1: Sit down and think about what your clients are asking themselves every day about their particular problems and possible solutions. If you are stuck, find a few people that you know that are in this “niche group” and survey them on their interests, problems and frustrations.

STEP 2: If you hear something from a couple of people you can rest assured that there are hundreds more out there that are asking the same question. This therefore gives you an opportunity to produce some literature to answer those questions.

 

STEP3: Write about 400-600 words. Bundle the literature in attractive packaging….article heading along the lines of 7 secrets to financing. NO SALES PITCHES

STEP 4: Disseminate the information. A) Put it on your website, b) Send it to your prospects, C) Send it to magazines.

STEP 5: Call the magazines. Speak to the editor of your niche area. Offer to be an authority reference point and provide more details. Offer more information to their readers and provide a tool or further information that they can download in exchange for their email address.

STEP 6: Start your contact relationship treating these people as warm leads.