Be the Change Careers

How to Know When You’re Financially and Strategically Ready to Start Your Own Practice

How to Know When You're Financially and Strategically Ready to Start Your Own Practice

How do you know when you’re financially and strategically ready to start a private career coaching practice? Many experts say it takes three years to move yourself from start-up to fully supporting yourself. Follow this line of logic and you will come to the conclusion that if you were starting a full-time practice, you may need to save three years’ worth of living expenses. And, if you want to dive into full-time consulting, with little debt, that may be the route you choose. However, you will find that career coaching offers more flexibility when it comes to financing a practice.

Career Coaching is Different than other Businesses

The beauty of the career coaching business is it’s very easy to start as a side-gig with very little overhead, especially if you start your business working out of your home. If you have a partner, or a spouse, you can negotiate the process of covering your household expenses with them. You can talk about your personal financial goals and projections and how they intersect with your collective goals.

If you decide to begin your business as a side-gig, then expect it will take longer to take it full-time. If you’re working full-time or part-time it can be challenging to have a side business but not impossible if you want to put in the work.

Proprietorship vs LLC

Another thing to think about is what type of legal entity you will form. The most common for career coaches starting out is either a sole proprietorship or an LLC. There are different advantages and drawbacks to each one. You can read about the differences in-depth in our Proprietorship vs LLC blog.

Develop a Financial Plan

It’s important, whether you start your practice as a side-gig or full-time, that you have a financial plan. Figure out your expenses. For instance, calculate your overhead and your marketing costs. Consider the cost of your website, social media, e-mail marketing and any of other forms of marketing. You may want to create a spreadsheet with all expenses you will incur operating your practice. This can give you an idea of how much revenue you will need to at least break-even or earn a profit.

You may find it makes more sense to outsource certain things like building your website while there are other items that you will want to tackle and learn on your own. That process can be one of the most exciting aspects of starting your own practice because when you are your own boss, you don’t have to do things that you hate and you can learn new skills that are fun and exciting for you. This is one of the ways you will grow and develop as you go.

Create Your Client Onboarding Systems

It’s also important to get your client onboarding systems in place. “Client onboarding” is the process of welcoming new clients into your business, addressing their questions and concerns, and ensuring they understand the services available to them.  This includes the entire journey from where people first learn about your practice, through the signup process, to their first use of your services. Client onboarding is one of the most important functions for any coaching business because it directly affects the client’s experience with your practice, which will affect profits.

The Importance of the Discovery Call

Offer a free discovery call to potential clients where you learn about their needs, desires and wants. This is also a good time to give them a taste of what working with you would be like. Perhaps you could do this by asking what their favorite parts of past jobs have been. Whatever your style is, tease your services a little without going into your full consulting role.

Be clear with your clients about what your services provide and what they can expect to get out of your time together. This includes goals and expectations. Share what your pricing is and about your cancellation policy and expectations around homework they will do to achieve their goals.

Start to Build a Professional Community

When it comes to career coaching, an effective way to begin is to recruit new clients through colleagues, friends and family. When you do this, you need to be clear about what services you are offering. For instance, you might specialize in professionals who are experiencing burn out in their current jobs vs a potential client who is looking for the first job they can land.

If you are reaching out to other career professionals you don’t know, introduce yourself and your specialty.  Ask them questions about their areas of expertise and look for ways that your services overlap or may have synergy or compatibility.  Ask for them to send you referrals of clients that fall in your purview and make sure you reciprocate. Once your practice builds successfully you will likely find many referrals from your existing clients. Career professionals have thrown out numbers like 30-40% of their new business is from previously satisfied customers.

You May Skip the Standard Business Plan

Some advantages you will find with starting a coaching practice is that it’s not necessary to do a traditional business plan with traditional market research. Some disadvantages may be that it can be difficult to get an SBA loan, investors, or standard financing. There are, however, tools like 0% credit cards or other creative ways to get financial resources when you are starting out.

If you are considering starting your own practice and want to learn about the unique tools and practices that can get you up and running quickly, consider signing up for our Kickstart Your Private Practice (KYPP) eight-week online course. These topics along with how to avoid common private practice pitfalls and how to market your practice effectively are taught by successful private practice career coaches.  If you want to learn more first, click here, or schedule a free fifteen-minute call with one of our team members.

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