So you’re ready to take the plunge—you’re ready to start your business coaching practice! Perhaps you have a business plan, a coaching curriculum, and a marketing strategy all laid out. Congratulations! You probably feel ready to dive right in!
Not so fast. There are some highly practical steps to take before you move from planning to implementation.
It’s easy to make the mistake of doing too much or too little when you’re getting yourself set up.
For example, some overly exuberant coaches spend money they should use for marketing on unnecessary office space or equipment.
On the other hand, some underinvest in getting their legal business entity set up properly or putting in place bookkeeping practices that will keep your business and your personal finances appropriately separate.
Here’s where to spend to maximize your investment and ensure smooth sailing right out of the gate.
Set Up Your Home Office
One of the best parts about running your own business coaching practice is that you can do it from anywhere. As you’re getting started, I highly recommend working from home. Use the money you would have spent on renting office space for start-up costs, especially marketing so that you can land those crucial first few clients.
As you grow and build your firm, you can always look for commercial office space then.
Find a quiet space in your home—an entire room, if possible—to be your designated office space.
Set it up so that you like being in there. Decorate it well. Give yourself a great background for Zoom meetings. Then invest in the right equipment.
- A desk—I recommend adding on a standing desk converter so that you don’t spend all day being sedentary;
- An ergonomic chair;
- A reliable laptop that can quickly and easily run business applications such as Office, Google Drive, and email;
- An extra monitor—or two, for increased productivity;
- A multi-function printer;
- A good phone connection—and here I recommend kicking it old school and getting an actual landline, since you’ll spend a lot of time on the phone and don’t want your cell phone or VOIP connection cutting out on you;
- A Zoom Pro account (note the Pro; you need to pay in order to not be limited to 40-minute meetings);
- A great headset; and
- The best, fastest, and most reliable internet connection money can buy in your area. Trust me on this one.
If you’re on a budget, check out Craigslist or Facebook Marketplace to find gently used equipment inexpensively.
Form Your Corporate Entity
This is a critically important step. Separate your business from the rest of your life financially, right from the get-go. Working from home can blur the lines, so you need to make sure you’ve established clear boundaries to ensure you have adequate asset protection between your personal finances and your business operations.
Separate your business from the rest of your life financially, right from the get-go. Working from home can blur the lines, so you need to make sure you’ve established clear boundaries to ensure you have adequate asset protection between your personal finances and your business operations.
For liability protection most attorneys and accountants recommend that you register as either an LLC or an S-Corp. An attorney or accountant will be able to help you decide what corporate entity structure is right in your situation. DO NOT skip this step. It might cost a couple hundred dollars to speak to a qualified professional, but the peace of mind you’ll receive from knowing you’re completely taken care of is priceless.
If you are uncertain who to speak to I recommend that you contact Corporate Direct, founded by Garrett Sutton, the Rich Dad™ Advisor on Asset Protection and Corporations. For less than $1,000 you’ll get everything set up properly and have everything you need to get going.
Beware of super-cheap online filing services. They often will not do everything properly to make sure that your protections are truly in place. Garrett’s program is a complete set-up and worth every penny to make sure it’s done right the first time.
Remember, you must have a real business entity so you can manage your revenue appropriately and stay out of trouble with the IRS. Business coaching is not a high-risk profession and I’ve never known a business coach who was sued by an unhappy client. However, it’s good to put a corporate firewall around your personal assets, just to be safe.
Closely related to this is the fictitious name filing, or registering a DBA (Doing Business As). This is especially important if your business entity is set up as a sole proprietorship. By registering a DBA, you can create a compelling name for your business coaching practice as opposed to doing business under your legal, given name. Again, consult with your attorney or accountant for assistance.
Set Up Your Business Bank Account and Bookkeeping System
NEVER make the mistake of funneling your business revenue and expenses through your personal bank account. That just creates a terrible mess.
Once you’ve established your business entity, take your paperwork to the bank of your choice and set up a business account. Many business accounts can be opened with a small minimum deposit and even include free checking, so shop around.
You’ll also want a system to help you track invoices and expenses and to prepare your tax filings. I like Wave for new entrepreneurs. It allows you to track everything, invoice directly, collect online payments, and even manage payroll (if/when you get to that point). The free version of the app does just about everything you need when you’re first starting out with your business coaching practice.
In addition, you can connect with Wave Advisors, who, for super affordable rates, will manage your bookkeeping and taxes for you (having an expert handle this side of things is worth the investment if you have the funds). At the very least, you can book them for a one-time coaching call to make sure you’ve set everything up properly.
When tax time comes, you will be so glad you’ve done this legwork ahead of time. Don’t shortcut this process!
These are just some considerations when you’re beginning your business coaching practice. For a step-by-step guide of everything you need to do and consider, download our FREE ebook, How to Become a Business Coach.