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Career coaching is in high demand as more individuals enter the job market and jobs continue to be scarce. Offering professional insight to others as they seek to grow their personal brand and increase their career trajectory can be a very rewarding business, both personally and financially.
Who is this business right for?
If you love working with people, are a great communicator and motivator, career coaching may be a great fit. Generally, career coaches have been in the business world for some period of time, may have advanced degrees, have spent time in a consulting firm, or perhaps are retiring from executive leadership positions.
What happens during a typical day at a career coach business?
If you own a career coaching business, you'll likely spend your day communicating with clients and doing research to help solve challenges. Continuing education is also in your future, as you'll need to stay on top of leadership trends. Staying active on social media is also an important trait, as you'll need to write and publish new content often to promote yourself as a leader in the career coaching space.
On a daily basis, you might find yourself re-writing a resume, updating a LinkedIn profile, polishing up a corporate presentation, or counseling a client on a particularly difficult situation with others.
What is the target market?
Preferred clients are individuals who are upwardly mobile, or who have recently been laid off from a mid-level or higher position. Understanding where people are in their leadership lifecycle is important to the type of advice and support you should offer to them.
There are no specific limitations on ages, but younger clients may be looking more for personal coaching, while older clients may need your assistance to stay up on current trends and assure that their resume is competitive.
Career coaches may also be hired by large organizations to help support high-level executives who are struggling with specific issues, such as dealing with difficult people or negotiations. These high-potential individuals may need a little boost in order to be as successful as possible in their position, or they may be preparing to take on new responsibilities.
How does a career coach business make money?
Career coaches make money by charging individuals or organizations for their services. Charging by the hour is the most common payment model in this line of work.
What is the growth potential for a career coach business?
Truly, the growth potential for a career coaching business is only limited by the owners ability to work hard and keep pushing! One way to continue to grow your business is by partnering with others. Executive coaching and leadership development companies such as Arden Coaching in New York can offer a stream of clients coming your way. According to the Bureau of Labor Statistics, individuals in this career path can expect to earn a median degree of $61,900 working full time. The good news is that the number of available positions in this career field is expected to grow at around 11%, which is faster than the average.
What are some skills and experiences that will help you build a successful career coach business?
Empathy to others is always important when you're working closely with individuals. Plus, you'll need excellent oral and written communication skills, tact, patience, the ability to listen and learn new things. There are several levels of skills that will serve you well in this line of business: the ability to challenge others, specific, and give timely feedback as well as active listening skills such as observing body language and knowing when to break the silence. Reframing is also an important way to add perspective for your client. Many career coaching have a minimum of a Master's Degree in their line of specialty -- often a Master of Business Administration (MBA).
What are the costs involved in opening a career coach business?
The main costs to start your career coaching business will be certification, via a qualified program such as the CPCC, PARW/CC, National Career Development Association or others. General liability insurance may also be a factor, as well as cyber liability -- a new form of insurance that protects you from hackers. Marketing and networking will also be expenses, as you'll need to be visible in your community in order to begin attracting clients. Expect to spend several thousand dollars launching your new career, between additional training and certifications (around $800-$1,500) and marketing ($500-$750).
What are the steps to start a career coach business?
Once you're ready to start your career coach business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your career coach business is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your career coach business keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a career coach business?
Before you begin coaching others, it's important that your own career is your first priority. Building a name for yourself and becoming respected in your business community is the best way to be successful. This jump start gives you a network of contacts that you can rely on as you begin working for yourself.
How to promote & market a career coach business
Again, ensuring that others see you as an expert in your chosen field is essential. Creating a blog, being active on professional social media platforms such as LinkedIn can pay huge benefits as you're starting out -- and as you continue to grow your business. Reach out to others who may be offering complimentary services to see if you can partner and grow your contacts. Networking is crucial!
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How to keep customers coming back
Whether you find your clients via referrals or through advertising, the best way to retain customers is to be honest, upfront and proactive in your communication with them. Always be conscious that you are serving them, they're not doing you a favor! Stay humble and kind, and always be positive about your business and about competitors. Your personal professional success will be the most attractive thing to your clients.
How and when to build a team
Feeling overly busy, and not sure when you'll be able to get to all the tasks on your to do list? If you're finding that you're turning down jobs that you would have accepted when you first started your career coaching business, and you have the budget to take on extra help, it might be time to expand. The easiest duties to outsource are recurring items such as billing, filing, or other administrative duties.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a career coaching business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
In businesses where services are provided on an extended basis, a services contract is often put in place outlining terms and conditions of service.
Career coaching businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, and service level expectations.Here is an example of one such services agreement.
Coaching Disclaimer & Waiver
Career coaches need to make it clear to their clients that they are not trained medical professionals. This can be accomplished by having clients sign a release of liability form.
Certificate of Occupancy
A career coaching business may be run out of an office, which helps provide a space for meetings. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a career coaching business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your career coaching business will be in compliance and able to obtain a CO.
How much can you charge customers?
How much you're able to charge clients depends on your level of experience and also the specific needs of your client. You may want to discount your services as you're starting out in order to build your business. There are also likely to be people throughout your career that you want to help for various reasons, and you may discount your services for them as well. Some clients will want to work on an hourly basis, while others prefer to pay on a project-by-project basis. Still others will want to keep you on retainer: where you dedicate a certain number of hours per week or month to their support.
Depending on your skills and specialty, as well as the level of individual you are coaching, you can expect to charge between $100 and $500 per hour. The charge rate is vastly different depending on your geographic location. Here's an example from the School of Coaching Mastery: an executive coach may charge $325 per hour, while a business coach might make around $235. A general career coach or “life coach” might charge around $160.
What are the ongoing expenses for a career coach business?
Ongoing expenses include marketing, advertising and networking costs to continue to grow your business, monthly or quarterly insurance rates and the costs of maintaining a website or personal blog. As your business grows, you may begin to outsource some of your content marketing or writing costs as well. Expect to re-invest anywhere between 5-10% of your income in marketing, with a minimum monthly spend of around $250 for website maintenance, ads and boosting social media posts as well as attending networking events. Depending on the level of client you service and level of insurance needed, this cost may be between $25 - $200 per month.
How much profit can a career coach business make?
If you're fortunate enough to have good contacts and work with lucrative clients, many people are able to make a six-figure income through career coaching. For others, this is simply a side job that allows them to be more comfortable. As with many businesses, you will get out of the business what you put into it.
Considering monthly business costs of approximately $500 and working an average of 15 hours per week, a business coach charging $150 per hour would net $8,500 per month. Keep in mind that unless this is a second job, you would also need to cover taxes, health insurance and a range of other costs.
How can you make your business more profitable?
One of the most effective ways to increase the profitability of your business is through seeking out a higher level of clientele. While you may start with middle-managers or those who are beginning their career, you'll eventually be able to work your way up to senior executives who have more disposable income to devote to growing their career.n
Another strategy is to take on apprentice coaches to increase the number of clients you’re able to work with at any given time. This will also enhance the reputation of your company, and expand your network to bring in more new clients by word-of-mouth.