You’re about to learn how to create a lean life coach business plan, and why this is essential for a successful coaching career.
As an experienced life coach, I can’t emphasize enough the importance of a well put-together business plan.
However, I also strongly believe that a ‘lean’ plan will ultimately prove to be more beneficial to you.
Read on to discover why…
Life Coaching Business Plan: Why Less Is More
A business plan is your written strategy for success.
Without one, you’re essentially ‘winging it’ with your coaching business and hoping for the best.
With one, you’ll make smarter, more focused and more rational decisions. You’ll find it easier to spot potential obstacles and opportunities for growth.
Perhaps you won’t be surprised to hear that a business owner who writes a business plan grows their company 30% faster on average.
What is a lean business plan – and why should a life coach use one?
A ‘lean’ business plan has all the unnecessary details trimmed off – leaving a concise document detailing only the most essential ingredients for success.
You can ‘get away’ with writing a lean business plan when you have no plans to present it to outside investors.
But there are more advantages than saved time…
The main advantage of a ‘lean’ business plan is that it’s easy to revisit and adjust and – if you want to thrive within your life coaching business – you are encouraged to do so every month.
It’s the continuous tweaking of your business plan – based on the ups and downs you encounter – that cultivates tremendous growth.
Lean business is around the process of plan, do, check, adjust (PDCA). You can learn more about this strategy in Eric Ries’ book ‘The Lean Startup’.
How To Write A Lean Life Coach Business Plan
Here are the nine sections you should definitely add to your lean life coaching business plan.
1. Mission Statement
This is a short explanation of why your life coaching business exists. Try and explain this in one or two sentences.
Within your mission statement, consider explaining who you can help, what changes you can bring to people and how.
Your mission statement is a key part of your coaching business plan. It should be used to guide all future business decisions.
This is a future-oriented statement explaining your ultimate long-term goals.
Why are you starting your coaching business? How would you like to impact your clients, your local community or the planet as a whole?!
Ideally, this vision is extremely detailed and inspires you to keep going when times are tough. Add it to the top of your business plan, alongside your mission statement.
As Nietzsche famously said: “He who has a “why” to live can bear almost any “how’”.
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3. Business Type/ Description
You can set up your business as a sole proprietorship, partnership or a limited liability corporation (LLC).
There are tax and other financial implications based on what you choose. Sole proprietorships and partnerships are more or less the same, except the former only has one business owner. A key difference to note is that business owner(s) aren’t responsible for business debts when they set up an LLC.
Your plan should state what type of business you are planning to set up, plus a business description, which lists what products and services you offer, plus the cost of them.
While it is possible to be a generalist life coach, there are several niches that you may want to consider entering.
- Mindset coaching
- Business coaching
- Empowerment coaching
- Grief coaching
- Intimacy coaching
- Career transition coaching
- Intuitive coaching
- Life coaching for teenagers
Ideally, you’ll have decided the niche you want to break into before you create your life coaching business plan, so you could choose a training course that best supplements these desires.
5. Target market
When you try and appeal to everyone, you’ll often fail to make a strong impression on anyone.
It will be extremely difficult to gain a reputation as the best life coach on the planet, but it is certainly possible to become the go-to coach in a specific niche.
This is why it’s important to choose a defined target market and gear all your marketing towards them.
You’ll want to market yourself in the places where your target audience spend time and speak in a language they relate to.
When choosing your market, you’ll want to define demographic factors such as:
- spending power;
- geographical location;
Your life coaching business plan should paint a picture of your ideal customer in as much detail as possible. The more specific, the better.
In order to find the best market for you, consider what group you will naturally be able to provide the most help to. Who will you get the most satisfaction from helping? Make sure you price your coaching services so your target market can afford them!
It will also help for you to gather data on the supply and demand for your niche of coaching among this demographic. Is there a gap in the market you can fill? Perhaps you will need to conduct some research to find out.
It will certainly make it easier for your business to succeed if there is a high demand for your brand of coaching within your target market (especially if there is a low supply).
6. Unique selling point
In order to become the number one in your chosen niche, you need to have a unique selling point. What will make your target audience choose you over your competitors?
You would certainly need to figure this out to make outside investors want to fund you – but it’s just as important in a ‘lean’ business plan too.
If you can’t explain why people would choose your business, it’s probably not a good business plan!
It’s highly recommended to conduct a SWOT analysis of your business within your coaching business plan. These are your strengths, weaknesses, opportunities and threats.
If you can successfully identify your weakness and threats – and create a solid strategy to overcome them – this really helps to make a strong and compelling business plan.
If you’re a member of the International Coach Federation (ICF), you’ll have access to plenty of materials to help you market your business successfully. Most ICF-accredited training programs will include information on marketing your coaching business too.
Still, your personal marketing strategy should mostly be determined by:
- your target audience (and where they spend their time);
- your marketing budget.
However you choose to market yourself, it should be written in this section of your lean business plan. Include your estimated monthly costs for each marketing platform.
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This may well be covered in the ‘threats’ section of your SWOT analysis, but you can go into more detail in this section of your business plan.
Who are your competitors? What are their unique selling points? How much do they charge for their services? What makes you better than them? Can you justify charging a higher price than them?
In a formal business plan, this section would need to be extremely detailed, so third parties could see they were making an intelligent investment.
For a ‘lean’ business plan, you don’t need to go into quite as much detail. Still, it will be important for you to make sure you are launching a financially viable business.
It’s easiest to create this in a spreadsheet. A formal business plan will typically include financial projections for at least three years. With a ‘lean’ business plan, you can perhaps get away with making projections for the upcoming year. Remember, you’ll be updating a ‘lean’ business plan on a monthly basis.
At the very least, you’ll need your lean business plan to include:
- Spending budget. How much will you need to spend to launch your business? How much are your monthly expenses? Make an estimate for each of them. Remember to include taxes.
- Sales forecast. This might be harder to predict than your spending. That’s why it’s a good idea to make three forecasts: a worst-case scenario forecast, target forecast and stretch target forecast. Your sales forecast should determine your spending budget. That’s how you ensure you don’t overspend.
You don’t need a business degree in order to create a sales forecast. Simply make an educated guess based on research of other businesses in your niche. Below, I have added some details of how much an average life coaching business earns.
How Do You Start A Life Coaching Business?
One great advantage of setting up a life coaching business is that you don’t need to do too much to get started.
Most coaches work from home and communicate with clients using online video calls.
Still, there are few tasks you need to complete in order to become a legitimate business owner.
Here is a checklist for you:
- Register your business name.
- Register your business with the government for tax purposes.
- Set up a website. You’ll need to pay annually for a reliable hosting provider and a domain name.
- Set up a business bank account and online payment processor.
- Purchasing your equipment. A great bonus about life coaching is that overheads tend to be low, especially if you’re working online. Most online coaches work from home, so they only really require a decent camera, microphone and internet connection.
- Commence marketing. Once you find a marketing formula that brings in more than it costs, begin scaling!
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How Do You Get Clients As A Life Coach?
You now know how to become a life coach, but knowing how to become a life coaching success is a completely different problem.
This question should be answered fully in the marketing of your coaching business plan.
Some coaches make use of social media. Others gather leads via a blog or a YouTube channel.
If you’re only engaging in face-to-face coaching, it might make more sense to explore offline marketing channels.
The most important thing to figure out is where your target market is most likely to see your marketing efforts.
Many coaches turn their leads into customers by offering a free trial consultation. This helps both the client and the coach see whether working together will be mutually beneficial.
What Qualifications Do You Need To Be A Life Coach?
Life coaching is an unregulated industry, so there is nothing stopping you setting up a coaching business and marketing your services with no qualifications today.
However, the reality is: it’ll be extremely difficult for you to attract any clients, let alone a steady stream of them, with no qualifications.
Anyone who does a couple of minutes of research about how to find the best life coach will be advised to work with a certified individual.
At the time of writing, an ICF-accredited certification is by the far most prestigious qualification that a life coach can gain.
The International Coach Federation (ICF) is globally-renowned for having the strictest standards when accrediting life coaching courses, so it’ll be well worth your time to get an ICF-accredited certification.
To help you choose your training course, I have listed 6 of the best ICF-accredited life coach accreditations.
How Much Money Will You Earn As A Life Coach?
Life coaches are free to charge clients as much as they want.
Ultimately, they’ll charge as much as the laws of supply and demand dictate. Typically, demand is higher for coaches with the best qualifications and most experience, which is why you can expect a life coaching business to earn more money the longer you stay in it.
A solid marketing strategy and a variety of products and services will go a long way too.
With that said, there have been many studies conducted to help estimate what an average life coach can expect to earn in a year.
A recent study commissioned by the ICF and conducted by PriceWaterhouseCoopers concluded that the average global salary of life coaches is $51,000. That was based on data from over 15,000 coaches in 137 countries.
The survey found that the country you’re based in has a huge impact on your earning potential. Click to discover the average life coach salary in your part of the world.
Lean Life Coach Business Plan Template
Any more questions about a life coaching business plan?
I hope this guide will help you understand the importance of penning a lean life coaching business plan – and give you the information you need to get started.
If you have any more questions about putting together a coaching business plan, you can ask them in the comments section below.
It would be great to hear from you!