How to define your Business Model as a Coach
In simplest terms, a business model is an assumption about how your business makes money and operates – an important place to start in any business. For service based entrepreneurs, business models are not complex. Here is how you can define your business model as a coach, one of your first steps towards making money in your business.
A business model can be simple or complex. A restaurant’s business model is to prepare and sell food to customers. A website could be providing a free service and driving traffic to it, then selling advertising to other companies. Or it could be selling a product or service direct through a shopping cart.
There is no need to overcomplicate your business model starting out as a service based entrepreneur or solopreneur. Essentially you provide a service to a customer, and the variable is how you charge for it and whether you expand from your basic service into alternative models such as info products, affiliate programs and e-courses.
Here are some of the common business models for coaches and their pros and cons to get you started. If you want to become a consultant, I will be covering some of the key business models for consultants in Part 2, coming soon.
Business Models for Coaches, Mentors & Facilitators
You charge for individual sessions and the client chooses when to do a session. The downside is that there is no incentive to have regular sessions to achieve a specific results and many services take several sessions to get traction and momentum can get lost. It also puts more pressure on sales and marketing activity as you are constantly needing to seek clients, and it creates unstable income.
You design a program, either unstructured or more structured, to achieve a particular result with a client. You recommend the time period to achieve the desired result e.g. 6 sessions, 3 months, 6 months etc.
The benefit is that it creates commitment from the client and makes it easier to build your income and replace your salary. For example, you know that if you want to make $10K per month and your program costs $2K that you need to sell 5 programs per month.
Private programs are great starting out to get cash coming into your business, develop your IP and get testimonials.
There are quite a few different options for group programs with different strategies and approaches:
Design a 1 or 2 day workshop and facilitate a session to achieve a specific objective. Often there is a free or low price point ‘intro session with the opportunity to sign up for the full program at the end.
Workshops requirek some coordination of logistics so it is helpful if you can get support with this. You also need to factor in for the cost of the venue.
As with single private sessions, this is a one off event and the challenge is in monitoring implementation. You can onsell one on one programs to support individuals to keep the momentum going.
Invite a key note speaker or design your own presentation and allow time for networking. This is a great way of building trust and credibility in a relaxed atmosphere.
Meet ups can be a great way to build community and trust as a lead in to other group or individual programs, however the price point is low so it’s more about building community and/or onsell than profitability of the event itself.
Events also require logistics to run smoothly, so if this is not your forte get some help with this.
While events can be a great marketing opportunity, you will need to factor in for the cost of the venue or drinks/food, or ensure that you have a certain amount of guests to ensure a minimum spend – so this will decrease your profits.
For this reason, if you plan to make this part of your business model, it’s best to combine with a membership or other model as most networking groups do.
Note: often venues will require a deposit weeks before the event so make sure you focus your marketing early in the process so you don’t get caught out financially.
Online or e-courses / teleclasses
Usually over a period of 6 weeks to 4 months, program content is delivered via video, Q&A calls, module worksheets and online forums support implementation. The benefit is that it is low touch for the facilitator once the content is finalized.
For this business model will need to become tech savvy, upskill in online marketing and build a list to fill your programs (this is helpful for other models like private coaching and live workshops as well, but even more so since the delivery method is virtual and you can attract clients from all over the world).
Teleclasses are usually for shorter time periods and program content is delivered via teleconference, with Q&A calls for interaction with participants. Once recorded, these programs can be easily marketed at regular intervals without any input from the facilitator.
Blended group programs
Create a program over a period of time (e.g. 6 months, 12 months) with a blended approach e.g. a combination of online content, online forums, live events and one on one.
A fixed fee is charged for a period of time ‘onsite’ at a retreat centre with a schedule for day and evening.
The downside is that the cost of accommodation and food can limit profitability of the program (unless there are additional products or services where there are other opportunities to make higher margins).
Logistics are also that much more complicated, with an increased responsibility in coordinating people’s accommodation and dietary needs and manage the group’s safety outside of workshop hours etc.
For example, you publish an ebook or book or an audio program. While self publishing gives the opportunity for higher margins than through a publishing company, generally books are not a high revenue generator (unless you are a best seller) and are most helpful for building your brand and establishing yourself as an expert.
Affiliate or referral programs
Earn a 10-50% commission for referring someone to another provider. It helps to find affiliate partners who are connected to the work you do that those on your list will benefit from (but is not in competition with you). You can set this up so that it is 2-way.
It is best if you have done the program yourself or you have a solid recommendation or experience of working with someone so you can stand by your recommendation and maintain your brand reputation.
Memberships and subscriptions
You offer resources or content online for free with limited access, and then subscribers or members pay a premium to access premium content or special benefits.
Now that you have an overview of the different business models, ask yourself:
- Which business models appeal to your the most and why?
- What do you see yourself enjoying the most?
- What fits best with your existing skills and talents?
- Which business model is easiest for you to implement right away?
- Which business models could you adopt in the medium term/long term?
- If you could split between the various business models, what would be your ideal split to work towards and why? E.g. 50% one on one/50% group / ecourses etc.
If you don’t have experience in the business model you have chosen, find a mentor or peer with experience and find out how you can maximise your success in that area.
If you are still in a job or in the early stages of shaping your business idea, my ebook can help you explore how you can make money out of your existing skills and talents and plan your exit strategy. Download your copy at www.louisetaylorcoaching.com/ebook.
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