You promised yourself that 2022 is the year that you are committed to starting your coaching business. You promised yourself this, but we are almost through the first quarter of the year, and you haven’t taken any action. We like to claim that we are too busy, but deep down, we know the truth. We are just plain overwhelmed with starting. Where do we start? What resources can we trust? What is the first step?
Starting a new business can be a daunting task but in this article, I attempt to break down what I believe are the necessary steps to set your new business up for success. I even share the estimated time and money you might need to be ready to invest into getting these things up and running. My goal is for you to walk away from this more confident in your abilities to accomplish this goal this year.
Be Honest with Your Why and When
The most important part of the process is asking yourself why you want to start this business. Owning a business isn’t for everyone, and while it can be enticing with the low startup costs associated with owning a remote coaching company, the fact is that it takes a special kind of personality who is OK with the responsibility and risk associated with owning a business. While it has many rewards for those willing to make certain sacrifices, it also has many sleepless nights.
If your personality is not built for those inherent attributes, you might be better suited to joining a coaching group. The benefits of that are many, including the fact that you can just coach, don’t have to wear all the hats of the business, can learn from others on a team and have limited liability.
If you decide that opening your own coaching company is the next right move, congratulations! Before we begin discussing the steps of starting your business, though, it is crucial to consider your situation. While most of us would love to dive into this dream fully by quitting our full-time job, I don’t think that is the best option in most instances. I always tell coaches to “do the math.” It is hard to make up a corporate salary with the monthly rates most coaches charge, so we must have realistic expectations of how quickly we can grow our athlete roster. Building a coaching business is something that can be built on the side of another job initially.
As a point of reference, my husband, Coach Andrew Simmons, and I started our coaching business, Lifelong Endurance, in 2014. We invested a couple of hundred dollars into the business, intending to be a part-time hobby. We were both working corporate gigs and didn’t really intend to quit. That was until it started gaining traction and we started to wonder what this could look like if we took this full-time. We worked hard building a name for ourselves locally and nationally until we finally made the full-time switch in 2017. At that point, we felt “comfortable” enough with our situation. I say comfortable enough because I don’t think we ever felt entirely sure about the decision, but we trusted we would find a way.
Others often ask us to define what that number was. There wasn’t an exact dollar amount, but it was more of a feeling of momentum. I did have a good understanding of our numbers, and they were consistently strong but more than anything we could feel our presence growing locally. More people were asking us to write plans or for our expertise. We were also creating strong partnerships with important players in the industry. All of that led us to believe it was time to make the jump.
Today we run a coaching company that has grown year over year for the past eight years (yes, even during COVID-19, we found a way to grow). We now have a team of six endurance coaches and a thriving youth running team. Here are some of the steps we initially took to make this dream a reality and set us up for success.
Step 1: Establish The Business
The first step in the process of starting a coaching company is to decide on a name. Feel free to solicit advice. Ask family members, friends, current athletes and co-workers for their opinions. When you come up with options Google search the name to make sure no one already uses this name. Once you have decided on a name that is not already taken head on over to the Secretary of State website for your state. There you will have the opportunity to file for the name. Most states charge $50 to a couple of hundred dollars to establish your LLC and the process should require less than 30-minutes for the filing.
The next step is to go to the IRS website and register for an employer identification number (EIN). The registration costs you nothing and is a five-minute time investment. This is important because it is basically the Social security number for your business. Banks will ask for this if you are trying to open an account. Please note, that if you plan on operating as a sole proprietor then technically you don’t need to do this.
Step 2: Build your Financial Foundation
This next step is one that most people skip. They file for the LLC then immediately go into the fun part of coaching or building websites. I can’t stress enough the importance of completing this step. It will save you future headaches, especially when filing for taxes the next year.
After you establish the LLC and receive the EIN you are ready to open a business checking account. The IRS does not appreciate when businesses combine personal and business finances. That is a big problem in their world and the fastest way to get yourself in hot water so make sure you separate your accounts ASAP.
It is wise to do some research online ahead of time to see what the required minimum balances and fees are for local banks. Some of the larger banks have $1,500 requirements which I understand is hard when you are first starting out. Check out credit unions that typically have lower requirements.
When you get to the bank you will share the documents you just filed, write a check to open the account, and be on your way with a new business checking and saving account in less than an hour. Start utilizing this account to take in all payments.
The next task is to research different software to track your financial transactions. You can use a spreadsheet but as your business grows this gets more complicated to keep track of transactions. Additionally, accountants have a much easier time working in known systems like Quickbooks, Freshbooks, etc. This means their time spent on your taxes is less, which at the end of the process, means your bill is lower. So, it is worth it in the long run. Most of these systems run about $30-100 per month so they are relatively inexpensive.
Once you have this system in place it is time to hire an accountant. Do some research by asking friends for referrals, asking in online communities you are a part of or checking out reviews on Google. Find someone who is trustworthy and knowledgeable while also fitting in your budget. Interview at least two to three of these people to see whose personality you fit best with. This is a person you should be comfortable asking any question about your numbers without feeling dumb.
I can’t stress the importance of securing this person now. The tax season really begins in January, so if you wait too long, you probably won’t find many people willing to work with you.
If you hate dealing with the numbers, ask them to do your bookkeeping. I would say most people take on this minimal additional monthly fee to feel confident that someone more educated in accounting is managing this process.
Make sure you utilize your accountant as your best resource. Ask them questions to understand what you can write off and what you can’t. A business owner who understands their numbers will have a much higher chance of succeeding over the long run. They will be able to make educated decisions and help lead their team.
Step 3: Create a Way For Others To Find You
After your finances are in line you will want to create a website. People need an opportunity to find you, book and pay you. If you don’t have this then you make securing new clients a challenge.
Research different hosting or web developer options. You will find that sites like Squarespace provide an easy platform to learn for folks who want to create their site. Most business owners go the route of hiring someone who is an expert and can do it in less time. Just like finding the right accountant, if you go the route of hiring someone, you will want to interview them and make sure they are the best fit. I always come prepared with a list of questions to make sure they understand my needs and I understand all that I am paying for.
The hardest part will probably be writing the copy for the site. It is sometimes hard to articulate who we are, who we work best with and our offerings. Bounce these ideas off your trusted network. It might be wise to ask a family member to write your bio so they can brag about your accomplishments since some of us are too humble in that step. This is typically the most expensive step in the first year of starting a business. If you are just paying the hosting fee, the cost can run from under $100 a month to a couple of thousand of dollars for a web developer and can take several hours.
When you accomplish these steps as you start your business, you will be on a good path to success. The most significant point of advice I can give is to be patient. Just like it takes years to truly build your fitness in endurance sports, it will take time for your business to become a well-recognized and respected name. It will take hard work, but I promise it will be worth it. Cheers to you for your courage and upcoming success!
