Most prospective business coaching franchise owners aren’t sure exactly how much they should expect to invest to launch a new business coaching franchise.
That’s because the full costs of starting a business coaching franchise are often hidden in the fine print or wrapped up in the day-to-day operations of the business.
So if you’re wondering how much you should realistically expect to burn through as you get your business coaching franchise off the ground, here are some straight-up facts and figures…
1. Be ready for large up-front fees when you buy your business coaching franchise.
These can range from $25,000 to $50,000 for the license alone. For the training, you’re going to need to throw in another $10,000 to $25,000 depending on how lavish the 7 to 10-day training is. So, count on $35,000 to $75,000 just to get out of the gate. To compare the up-front fees for many of the major business coaching franchise brands, derived from their Franchise Disclosure Documents, check out our Business Coaching Franchise Buyer’s Guide.
2. Expect to be charged monthly royalty fees by the business coaching franchise.
Royalty fees begin almost immediately, though in recent years some business coaching franchise systems have begun to delay the start of royalties as their entire business model has come under increasing scrutiny in the industry. Royalties can be either a fixed amount or a percentage of revenue. As a business coaching franchise owner, understand that royalty fees in the $1,000 to $1,800 per month range are typical. Try to find a franchisor who opts for percentage-based royalties as opposed to a fixed amount, as this will mean that the franchisor is confident in the business model and willing to shoulder some of the risk and work harder to help you succeed.
3. You may pay “brand-building” fees into the business coaching franchise system.
On top of these costs, find out if the business coaching franchise system includes a brand-building fee. This fee is usually 2 to 5% of your revenue. It is (allegedly) used to build the brand locally, or in your region — though in most of the business coaching franchise systems we’ve studied, very little large-scale branding actually takes place with these dollars. So be sure you know that you’ll be getting your money’s worth.
4. Don’t forget your material costs.
Franchisors may also require you to buy a website, software, and marketing and branding materials which include stationery, letterhead, and the like.
You’re likely to invest more than $200,000 to start your business coaching franchise.
From my years of selling business coaching franchises for several of the best-known business coaching franchise brands, I’ve observed that start-up costs for a business coach franchise average about $200,000, including working capital. It’s not uncommon for a first-year business coaching franchise owner to spend more than $100,000 to set up their business and then go through another $100,000-$150,000 in working capital while trying to get cash-flow positive by landing those first few clients.
Some business coaching franchise opportunities require less working capital, some much more. But understand that many business coaching franchisors charge huge up-front fees just to survive themselves… and that’s because their franchisees aren’t producing enough royalty income to keep them solvent. Buyer beware!
SO, that’s how much money it really takes to start a business coaching franchise. Obviously, you don’t want to end up tied to a business coaching franchisor who cares more about selling his brand than seeing YOUR businesses succeed. So, if you’re considering purchasing a business coaching franchise, make sure you conduct thorough due diligence and have all the facts first!
For more information on the business coaching franchise industry, as well as a comprehensive breakdown on all the ins and outs of buying a business coaching franchise, download our FREE ebook: The Business Coaching Franchise Buyer’s Guide.
What’s the best way to find hot business coaching leads?
You know, leads who are ready to buy right now?
Is it painstakingly detailed SEO, researched down to the slightest keyword variation?
Is it an impassioned closing pitch you’ve perfected for that webinar or speaking engagement?
Is it good, old-fashioned shoe leather—knocking on doors or cold calling potential customers until you find one ready to buy?
To tell you the truth, this is a bit of a trick question.
That’s because the best way to find hot, ready-to-buy business coaching leads…
…is to make them.
Are You Making This Mistake?
The truth is, one of the worst mistakes you can make as you market your practice is to fall prey to “hot lead syndrome”—the process of constantly looking for and chasing potential clients who need what you’re offering right now.
It sounds rather innocent. What could be wrong with trying to find people who are ready to buy right now? Cuts out all that tire-kicking and waiting until the time is right.
But that misunderstands the nature of business coaching.
Because when you sell a valuable professional service, you need to build up a high degree of trust and credibility with potential clients before they’ll be ready to hire you.
And that doesn’t happen overnight.
What to Do Instead?
Stop looking for a silver bullet or a magic combination of keywords. Recognize that this is a process—one that requires an investment of time and energy.
There’s no magic “hot business coaching” lead generator.
There’s only consistent, day-by-day execution of a marketing plan that will warm cold contacts over time.
(By the way, this is better anyway. It ensures you have a steady stream of warming leads at different stages, as opposed to the “feast or famine” cycle that many coaches are all too familiar with.)
So here’s what you do right now, today, to get the process rolling.
Identify who your ideal clients are. How big is their business? Where are they located geographically? What industry are they in?
Then, focus on adding value to your target market immediately.
You can do this in any number of ways.
Send a regular email newsletter of high-value, actionable content.
Host webinars or seminars.
Share relevant content on LinkedIn and Twitter.
Get invited as a guest on podcasts that serve your target market.
Start your own podcast or YouTube channel.
Write guest articles in industry magazines.
Create blog posts like this one.
Write a book or ebook.
Don’t worry if they’re not ready to buy now. Just be sure they’re the type of business you want to work with.
Even if you catch them when they’re first exploring their problems or establishing their goals and aspirations, you will build credibility.
And when they finally do become a hot lead, you’ll be the person they turn to.
Did you know that only 9% of business coaches will ever make it past three years in their business (and, that’s in a year when we’re not still dealing with the lingering impacts of coronavirus!)…?
In fact, only 3% of coaches will ever truly “win”—that is, impact thousands of clients, and make six to seven figures a year.
Why do so many set out at the base of the mountain, but so few make it to the top?
What’s the UNCOMMON path the 3% are taking that the 97% are passing right by?
Well, if you don’t have a proven marketing and coaching system behind you, it’s easy to get lost…
Especially when there are so many good “trails” you could take…
Recording a podcast
Writing a book
Building a sales funnel
Launching a website
Crafting a new lead magnet
Starting a Facebook group
Running a webinar
Paying for YouTube ads
Where do you even start?
From Common to Uncommon
It’s COMMON to think that if you want to be successful, you need more…
More ways to reach clients
More social content
More sales pages
More, more, MORE!
But rather than doing 50 different things, you actually just need to focus on a few things consistently.
It’s COMMON to try thing after thing hoping it will work…
It’s COMMON to try to figure it all out on your own…
But, unfortunately, it’s also COMMON to not succeed as a coach.
Don’t you think you should learn more about the UNCOMMON approach?
Here are four crucial strategies you need to succeed.
Strategy 1: Master Your Marketing
Here I don’t mean mindlessly chase after every shiny new marketing object. Instead, I mean choose two to three of the following eight tactics and get extremely good at them.
Strategy 2: Be Sure You Have a Successful System
Especially if you’re just starting out, don’t try reinventing the wheel. There are proven systems for both acquiring new clients and coaching them effectively, so that you can spend more of your time getting wins for your clients instead of spinning your wheels.
Of course, we’re partial to our own system (which we’ve diagrammed neatly below), but whether you go with Coaches’ Coach or someone else, find a system and work it thoroughly.
Strategy 3: Spend Time with Qualified Clients Only
So many coaches feel they have to chase every lead because they’re desperate to land business. The fact of the matter is, this is a recipe for disaster. If you let yourself work with underqualified prospects or problem clients, you’ll spend so much time spinning your wheels that your business will never reach the next level.
Let go of prospects who don’t fit your ideal client profile. Don’t take clients who can’t afford to pay you. If the client is a pain to work with, fire them. Free yourself from the stress, strain, and ultimate revenue loss that will come from pursuing and working with the wrong kinds of clients.
But beware! If you find this happening a lot, it’s an indicator that one of two things is happening.
One, your marketing isn’t drawing the right kinds of leads, and your messaging and targeting need to be overhauled.
Two, you aren’t being effective as a coach. Remember, selling is coaching and coaching is selling! They’re two sides of the same coin. So if you’re struggling to land clients, or you’re losing clients way too easily, it’s time to brush up on those sales skills.
Strategy 4: Motivate Clients to Sing Your Praises
It sounds straightforward enough, but you’d be surprised how many coaches get this wrong.
If you want your coaching practice to succeed, you’ve got to be a great coach. Period.
You’ve got to set your clients up for success with clear, consistent sessions that are organized around a strategic plan that has buy-in at all levels of the organization. You’ve got to use a proven framework that creates demonstrable value through proven business tactics. And you’ve got to build trust with your clients by being consistent and delivering results week after week.
Once you master these skills, your clients will sing your praises—not just in your coaching sessions, but with their friends, contacts, and colleagues…which will translate to more business for you now and in the future.
Remember: becoming an uncommon success isn’t luck and it’s not rocket science, but it does require knowing what to do and how to do it. If you want to be trained in a system that has helped hundreds of coaches crack the 3% of high achievement in this industry, take a FREE 30-day test drive of our comprehensive business coaching system. It will show you exactly how to master each of these four strategies on your way to being a top-performing coach.
Why is it that so many successful business coaches talk about building habits?
It’s because small habits make a huge impact.
In his book Atomic Habits, James Clear talks about the exponential impact of even tiny improvements. If you get just 1% better at something every day for a year, it creates a virtuous cycle that skyrockets growth.
The same isn’t true of deterioration, because even stagnation stagnates!
There is something uniquely powerful about small, incremental changes.
See the chart below for an incredible visualization of this powerful principle.
But what are the habits you should develop in order to become a successful business coach?
Here are six “atomic habits” for business coaches, divided into three basic categories, that will help you become who you want to be.
First, get your mindset right. This has to do with making sure you’re centered on what matters most. The chart below gives you two habits to master over the short-, medium-, and long-term.
The first has to do with setting your vision for yourself: what do you want to achieve? Why do you want to achieve it?
The second has to do with creating a relationship with your goals, starting by creating bite-sized, week-long goals that you actually achieve, and working from there with your forward momentum!
This second category has to do with making sure that you do enough of the right things. You can repeat all the affirmations in the world, but until you translate them into action, you won’t see much progress.
Your first habit is to master your calendar. The way you manage your time is the bedrock of all success!
The second habit is to learn how to set boundaries: that is, to determine which activities are non-negotiable, and to learn to stick with them, no matter what.
This third category has to do with the time and energy you spend investing in yourself to proactively get better. As a business coach, you are the product you’re selling! Your knowledge, your emotional intelligence, and your skills to help coach clients to the results they want. Thus, you need to create habits that will help you improve yourself.
The first habit in this category is that of reading regularly. The most successful people in the world, regardless of industry, have one thing in common: they read, they read, they read.
The second is to invest in yourself—your growth, your learning, your skills. You are worth the investment.
If you’re at the beginning of your business coaching journey, learn more about what else you need to know in order to succeed! Download our FREE ebook, How to Become a Business Coach.
Should you aim to be a local or global business coach?
If you’re considering a business coaching franchise, it might not even be a question you can ask. In most cases, business coaching franchisors restrict you to a local market.
They say it’s a benefit. But is it really?
The fact is, in 90% of cases it’s easier to go global than it is to go local because the number of people in your set target market is going to be infinitely bigger and you can leverage technology today in ways you just can’t with a local market.
In the past, I’ve seen coaches with franchised or licensed business coaching systems who slice up their territories into little boxes. The coaches feel like, “Great! I own this area and no one else can come in. It’s all mine!”
Who really benefits from a local restriction?
But think about this logically for a moment. Who really benefits from a local restriction?
Well, obviously the person who sold you the franchise for that little patch of ground benefits from that arrangement. It allows them to slice up an area and sell more franchises and licenses!
You, on the other hand, get no real benefit from limiting yourself geographically.
The person who sold you the franchise for that little patch of ground benefits from that arrangement. It allows them to slice up an area and sell more franchises and licenses! You, on the other hand, get no real benefit from limiting yourself geographically.
I even heard one coach say “I own this area, it keeps competitors out.”
Well, I’ve got bad news for you. It doesn’t keep any competitors out. It restricts other people in the same license or franchise group as you. For everyone else, your patch is wide open.
So should you be a local or global business coach?
Don’t try to be local. National makes sense, especially if you have a live face-to-face component to your program or you run events.
But if you’re a coach with expertise or a message to share, then global is where it’s at.
For me the answer is: local is difficult, national is easy, global is easiest of all.