Coaching Biz Tips

5 More Coaching Business Deathtraps

This is the second in a series of two posts on coaching business death traps. Read the first post here.

6. Over-optimism -- Expecting your business to do better than reasonably possible given the available resources (time, capitalization & materials). There's a certain naivete among first-time business owners – some might also call it denial – that usually ends in a rather harsh wake-up call. Most successful businesses take more time, money and effort than expected, not less. Don't count your chickens before they're hatched.

7. Failing to make the connection to the customer's bottom line  --  If your product or program can save your customer time, money or effort, make sure that these savings are clearly stated. In fact, do the math for your customers; be as specific as possible. Too many coaches focus only on the process of coaching, and not enough on the results that coaching produces.

8. Not giving the customer a compelling reason to buy – The most successful coaches know the major factors that their customers are going to consider when buying coaching services or products, and they also know how they compare to their competitors.

This awareness is important for two reasons: 1) You can't make your offer compelling if you don't know what your customer's priorities are; and 2) If you want to stand out and be noticed, you obviously need to know what you're standing out from.

If you fail to show that any fully informed buyer would be crazy not to seriously consider purchasing your service or product, the buyer has no reason to choose you – so they probably won't.   

9. Trying to sell without marketing -- I know you're passionate about coaching; you've probably invested hundreds of hours and thousands of dollars learning how to be a great coach.

You've reinvented yourself as the best thing since sliced bread; you just need some clients so you can get to work. So how come the world isn't beating a path to your door?

This should not be a surprise - very few coaches are experienced marketers. Doing marketing well is every bit as difficult and specialized as mastering the art of coaching itself. It is absolutely critical that you develop this talent as quickly as possible.

So for example, don't make the mistake of bombarding your mailing list (or social network, or the NCC YahooGroup listserv, etc.) with nothing but promotions. Marketing is about building trust and credibility; it's about cultivating an on-going relationship that's mutually beneficial. The sale cannot happen until AFTER the customer knows and trusts you.

10. Throwing good money after bad -- "I'm in too far to walk away" - in other words, failing to admit that you made a mistake with your marketing strategy. Ask yourself, "Would I invest the time and money in this strategy today if it was presented to me as a fresh opportunity?"

Another way to tell if you've made a mistake is to ask yourself if any of the following statements are true:

• Overall, this project has been a major disappointment.
• At some point, the expense (in time and/or money) could drain the healthy parts of my business.
• Most importantly, the resources invested so far are gone - my cost basis is zero!

If you answered yes to any of the above, it's probably time to cut your losses and move on to the next opportunity.

Have I missed a particularly nasty deathtrap? Leave me a message below if you've got a story to share!

5 Coaching Business Deathtraps

What are the most common (and avoidable) fatal business mistakes that coaches tend to make?

1.  Lack of focus -- Your most precious resource is your attention. Doing one thing well is an enormous challenge; tackling three or four things at once is a recipe for mediocrity.

Carefully sort through your marketing options before you choose which one to focus on (one target market/one problem/one solution). Commit to which ever option is most likely to be successful, and stick to it!

2. Inadequate market research -- Failure to do adequate market research, including getting out into the marketplace and talking to as many high-potential customers as possible before committing to a marketing strategy, is asking for trouble. Google is a great place to start.

3. Perfectionism – Lots of coaches have great ideas for coaching products and programs. Some just can't seem to stop fiddling with it until it's perfect.

This is an unrealistic goal. There's always an improvement that can be made, a bell or a whistle than can be added. When you've developed your product or program to the point where it represents a clearly superior choice, stick a fork in it and call it done.

4. Getting swallowed by a whale – Executive coaches are particularly vulnerable to "whale" clients. Imagine that you have the opportunity to get a contract that could cover all your expenses and then some. That's the good news. The bad news is that this one contract is going to consume ALL your time and attention for the foreseeable future.

And the worst part is that when the whale spits you out (trust me, it will happen, usually at the worst possible time), you'll be stuck with a whole lotta nothing. No clients, no cash flow and no prospects in the pipeline.

Now, I'm not necessarily suggesting that you should turn down a juicy opportunity. I'm just saying you still need to keep working on the rest of your business so that you're not dependent on any particular customer.

5. Living large before you're earning large -- Show me a start-up coaching business with a swanky leased office space, shiny new furniture and equipment, and a virtual "staff" spread across the globe (virtual assistant, webmaster, bookkeeper, etc.), and I will show you a prescription for failure. In most cases, it's all paid for by credit card. And the coach is sitting by themselves in the swanky office, wondering where all the clients are.

Lack of cash flow is death to any business. Spend your resources only when it makes a true difference, when it stands to directly impact your objectives.

Stay tuned for more traps to watch out for. Until then, leave a comment to let me know what you think.

10 Tips for a Profitable and Sustainable Business Model

An earlier article explored how to tell if your business model is broken; today I want to share ten tips for building a profitable and sustainable business model.

First, a few words about what I mean by "business model", and why you should care.

Basically, a business model defines the problem your business solves and describes how it does so profitably.

By "problem", I mean the gap between where your customer is now and where they want to go. Every customer wants something that they don't yet have; your business helps them close that gap.

The "profitably" part is the key to why you should care – because if your business doesn't operate profitably, you're not going to be able to help many clients! When your business makes more money than it takes to operate, you can reinvest your profits back into the business in order to grow. But if you're spending more than you're making – for example, needing to use your credit cards to pay your bills -- you're probably going to run out of resources pretty quick.

What does a profitable business look like?

Imagine two coaches who are starting out on the same path: Coach Alison and Coach Brenda.

• They have similar experience and education
• They live in the same city
• They have similar financial situations
• They're both going after the same type of client -- baby boomer women
• After 18 months, one business is healthy and growing, while the other is teetering on the edge of collapse

Coach Alison is following the well-worn path that many coaches follow right out of training. (See "Is Your Business Model Broken?") After working diligently for 18 months, she's got a lovely web site; 157 people on her mailing list; 5 clients (2 are pro bono; another isn't really a baby boomer woman, but she can't afford to be picky); a maxed-out line of credit; and a husband who is starting to wonder what she's doing all day. Alison is starting to wonder that, herself.

Coach Brenda is having a very different experience. She's getting new subscribers every day, and virtually all of them are in her target market; many on her list have already purchased her new ebook, and almost everyone who buys the ebook goes on to buy something else (an audio program, a teleclass or a  coaching package); she has a waitlist of people who want to work with her at her new rate; and her husband is starting to wonder if he should quit his day job to become a coach, too.

Why is one business struggling while the other is succeeding?

What's Brenda's secret? It's not a secret so much as a winning strategy. Alison is using a one-size-fits-all business model, while Brenda's is custom-designed for success and sustainability. Here are ten tips for creating your own profitable and sustainable business model:

1. Start with a relationship-building mindset. Customers tend to buy from people that they know, like and trust; the best way to do that is to show them that you understand what they're struggling with and that you have a proven track record of success with their issue. (Hint: they're not struggling with coaching, so stop talking about coaching and start listening for the real problem.)
2. Define the problem that your business solves so that you can talk about your clients' coachable goals with clarity and credibility. To see some examples of coachable goals, see this article.
3. Identify a viable market segment that is already spending money on the problem that your business solves. The segment should be specific enough to share certain buying behaviors, yet large enough to support your business.
4. Aim your marketing promotions directly at the target market. Don't try to be all things to all people; you'll only frustrate yourself and confuse your prospects. For example, while Coach Brenda is narrowly targeting (and attracting) female baby boomer executives who are facing a major career transition such as retirement, Coach Alison is having less luck finding and connecting with a broader, less exclusive market (baby boomers who want to thrive.)
5. Create a sales funnel so your customers have a natural, easy path to follow, from joining your mailing list to making their first purchase to hiring you as their coach. Click here to see an example of a sales funnel for coaches.
6. Differentiate yourself from other coaching businesses so that your brand stands out in a memorable way. There are many ways to differentiate yourself other than pricing, by the way -- for example, packaging, service, expertise, positioning, etc.
7. Don't trade time for money. Switch to a monthly retainer or package rate, rather than quoting an hourly or monthly rate. Stop selling your time and start promoting the value of your services.
8. Expand your revenue base by creating multiple channels of income – info products, audio products, group coaching programs, paid membership programs, etc. When you spread your profits over a range of income streams, your cash flow tends to be much more consistent and stable (and LARGER).
9. Automate your marketing system to free yourself up to do what you truly love (coaching!). At the very least, use a reputable list management system with auto responders  -- Aweber, iContact and 1Shoppingcart are three popular choices.
10. Take a stand for the value you provide; offer options instead of discounts. If a prospect balks at your premium coaching package, point them towards a less-comprehensive coaching package, a group coaching program or a coach-yourself homestudy kit.

With the right business model, you'll get more business, more easily and be able to make a bigger difference with more people. And isn't making a difference with more people the whole point?

©2008 by Kathleen L. Mallary. All Rights Reserved.

10 Coachable Goals (and 3 That are Not)

 

In this article, I want to share ten examples of coachable goals, along with 3 examples that are not coachable.

Knowing what your client's agenda is and identifying whether it's a coachable goal or not is critical if you want your clients to get the results they're looking for. If you don't take time to identify a coachable goal, you could end up with a generic, light-weight coaching program that misses the mark with your target market, or worse – you could find yourself spinning your wheels trying to coach when what the client actually needs is counseling or therapy.

First, I should explain what I mean by "coachable goal." A coachable goal is a life or business objective that a customer is ready, willing and motivated to accomplish, but which he or she perceives to be beyond his/her current level of experience or ability. In short, they want to do or be something new.

Some keys to keep in mind about coachable goals:

• The client should be able to see himself/herself succeeding. It may feel like it's going to be a stretch, but they should feel they have the potential to achieve the goal with encouragement, skilled facilitation and the right tools and resources.
• Coachable goals are accomplished through the client, not through the coach or anyone else.  If the goal is beyond the client's control or if they feel powerless in the face of it, it's not a coachable issue.
• The issue must be emotionally charged for the client right now. Idle interest isn't enough; they must feel urgently compelled to change the status quo: "I can't keep on going this way much longer! I have to figure this out NOW." If they aren't emotionally invested, or if you find yourself trying to persuade them that they should want to go for the goal, the issue probably hasn't reached a coachable point yet.

10 Coachable Goals…

OK, so without further ado, here are ten coachable goals (not in any particular order):

1. Making and/or saving money
2. Saving time
3. Making their work easier or better
4. Improving themselves/their relationships
5. Overcoming a major life challenge
6. Reducing stress or learning how to handle it better
7. Feeling healthier or younger
8. Communicating better
9. Making a transition
10. Finding more joy, meaning and purpose in life

…Plus 3 that are NOT

These are the types of goals that are beyond the scope of coaching:

• Changing someone else's behavior or thinking (other than the client's). Coaching can help the client change their own perspective ABOUT how someone else behaves or thinks, but the coachable goal must be about the client's beliefs and behaviors, not a third party's.
• Overcoming compulsive or addictive behavior. If the client feels powerless in the face of the issue, therapy or counseling would probably be more appropriate than coaching.
• Healing painful memories.  Again, therapy or counseling might be more effective than coaching.

Ideally, you would target a market segment that shares a common agenda and/or have similar coachable goals—it makes finding clients SO much easier! It also makes it a snap to put together a signature coaching program and products when you use the client's coachable goal as the unifying theme. Everything just kind of falls into place.                              

If you've been working with clients for any length of time, you may be able to discover a pattern of coachable goals by going back over your coaching notes. See if you can pick out a theme or common agenda to build your marketing materials and products around.

Don't fantasize yourself out of business (Part 3 of 3)

Part 1 explored a common but misguided approach to growing a coaching business, and Part 2  explained why that approach doesn't work. In Part 3, we'll explore a more realistic (and ultimately more  successful) approach to growing your business.

OK, the fantasy has evaporated like morning dew on a hot summer day, and the inconvenient truths have been faced with courage. Now what?

Now it's time to explore what really works. First of all, there are three things that every successful business does well:

1. Get customers
2. Keep customers
3. Grow the lifetime value of customers

No matter what kind of industry you're in or who your customers are, and regardless of whether you sell widgets, roller coaster rides or a personal service like coaching, you must consistently accomplish all three in order to have a successful business.

Don't fantasize yourself out of business (Part 2 of 3)

Part 1 explored a common approach to growing a coaching business. Part 2  explains why that approach doesn't work.

3 Inconvenient Truths About Growing a Successful Coaching Business

Truth #1: Customers don't care who you are, what you're passionate about or how much you want to help them.

Well, they might care at some point, but trust me, they don't care about any of that yet. They mostly care about who THEY are and what THEY'RE passionate about, and they care about being, doing or having _________________ (fill in the blank with whatever your target market's common agenda is).

Don't fantasize yourself out of business (Part 1 of 3)

One of the happy benefits of focusing on the same target market over time is that you start to see certain patterns and biases. Close scrutiny affords a much more intimate, richly textured view of your customers and their issues -- issues that are actually inconvenient truths that must be confronted if your customer has any hope of success.

For instance, I've noticed that my own customers sometimes have a rather fantastic vision for how they're going to grow their business. And by fantastic, I don't just mean wonderful; I mean as in, "based in fantasy."

It goes something like this:

3 Hot Markets for Coaching

If you're looking for a lucrative niche, consider these three hot coaching markets:

1. Baby boomers
Who they are: Baby boomers are people born between the mid-1940's and the mid-1960's; the first wave is just now coming up on retirement age. There are 76 million baby boomers in America; in the UK, baby boomers hold
approximately 80% of the wealth.

What they're interested in: Health and fitness; simplifying their lifestyle; elder-care issues; social and environmental issues; managing time and money; traveling; working from home; starting a second career; volunteering.

For example: Coach Gesine Schaffer

More links:
http://boomertowne.com/
http://www.boomernet.com/pn/index.php
http://www.boomerwomenspeak.com/index.php

2. Private practice professionals

Who they are: Doctors, dentists, chiropractors, therapists, financial planners, massage therapists, holistic healers, Real Estate agents, lawyers, nutritionists.

What they're interested in: Growing a successful practice; managing & leading people; improving customer service; time management; getting organized; marketing; getting referrals; selling their practice; quality of life/life balance; communication/interpersonal skills; business systems; team-building.

For example: Coach Lucy MacDonald

More links:
http://www.ppamember.com/index.asp
http://www.privatepracticesuccess.com/thenewpp.html
http://ahha.org/

3. Parents

Who they are: Mothers; fathers; single parents; divorced parents; step parents; foster parents; expectant parents; first-time parents; teen-aged parents; parents of teens; parents of gifted children; parents of children with special needs; custodial grandparents; parents of blended families; parents with an empty nest; working parents; stay-at-home parents.

What they're interested in: Healthy, happy families; parenting skills; time/money management; child behavior issues; communication/interpersonal skills; ADD/ADHD; quality of life/life balance; co-parenting; parenting when you're divorced; parenting styles; family values.

For example: Coach Terry Levine

More links:
http://www.parentcoachplan.com/index.php
http://www.familycoachtraining.com/
http://parenthood.com/

As I was putting this article together, it suddenly occurred to me that it might be interesting to combine some of these groups -- for example, you could target baby boomers who waited until they were in their 40's to start a family.

For more info about finding a lucrative coaching niche, read Q&A: Top 3 questions about coaching niches.

Is your business model broken?

A business model is the framework that shapes your business and, to a very large extent, determines whether it's successful. Your business needs a sustainable business model in order to fulfill it's purpose, which at the most basic level is to find, keep and grow customers profitably.

OK, I know that last sentence might stir up a debate, especially among coaches who have a much loftier purpose in mind for their business, like making a difference in the world, etc.

But unless you're independently wealthy and can afford to run your coaching business as a hobby, your business MUST find, keep and grow customers. Profitably.

Because if it doesn't, it will eventually stop being a business, and then you're going to have to find some other way to make a difference, most likely by working for somebody who's figured out how to find, keep and grow customers profitably.

Which brings me back to my point, which is that if you want YOUR business to succeed, you'd best pay attention to the business model that's shaping it. Because not all business models are created equal.

In fact, the business model that coaches typically start out with has a built-in bottleneck that limits the number of clients you can work with, puts a kink your profits and takes all the oomph out of your marketing.

Doesn't sound too healthy,does it?

How can you tell if your business model is broken?

See if any of this sounds familiar:

1. Your marketing strategy is persuasion-based. Your objective is to get people to give coaching a try so they can experience the benefits first-hand. Giving away free sessions is a primary tactic, and your marketing materials are centered around explaining what coaching is and how it works.

2. You're trying to create a market for your coaching, rather than finding a viable market first and tailoring your products and services for them. You don't know much about your competition or why a customer might choose you over them or vice verse.

3. You're careful not to be too specific or too targeted in your marketing because you don't want to exclude anyone who might be a potential customer.

4. Your client base is diverse; the only thing they seem to have in common (other than working with you) is that they have nothing in common. They don't all share a single interest or a specific struggle, which makes it difficult to create a common solution or approach. You're not in a good position to promise specific results.

5. You'd like to generate some passive income through products, but it's difficult to come up with something that appeals to everyone.  Your product funnel is pretty simple; basically, there's free stuff at one end and a high-ticket coaching package at the other.

6. You offer the standard coaching package, which looks like a clone of every other coach's standard coaching package. There's very little to distinguish your approach and packaging, aside from your logo.

7. You get paid for your time, rather than for your expertise, and the only time that brings in revenue is the time you spend coaching.

8. Your profits are driven by how many clients you can work with at once. To increase profits, you must either increase your client load or raise your rates.

9. When your client load goes up, your productivity in other areas goes down. And when you shift focus to other areas, such as research and development, administration or marketing, you feel like there's not enough time to take on new clients.

10. You have a hard time justifying your rates to yourself, much less your clients.

If some of this sounds familiar, don't worry -- you've got plenty of company. This is exactly the type of business model that many coaches start their business with; unfortunately, a good number of them go out of business with it, too. At best, you'll have to work exceptionally hard to produce even moderate results; at worst, you'll burn yourself out  trying.

And that's no way to get the best of yourself in business!

You need to shift to a business model that increases your cash flow and profits, expands your capacity to take on new business with ease and attracts better-qualified clients.

More about THAT next time! Until then, I leave you to ponder this question:

What's your business model done for you lately?

P.S. Read the follow-up article to this post here.

10 Great Articles

I put together a collection of articles on marketing tips, techniques and strategies, written by some of my favorite marketing mentors: Robert Middleton, Mark Silver, Alexandria Brown, Lorrie Morgan-Ferrero and Tessa Stowe.

Click here to download a free copy of the digest (PDF).