In this podcast episode, Angie and John discuss a common mistake among coaches: neglecting the business aspects of their practice. They emphasize the importance of managing business administration beyond just getting new business cards or a flashy website.

Angie shares her struggles with adapting to administrative tasks, underscoring that many coaching programs do not teach the essentials of running a business, such as marketing, managing finances, or filing taxes. They explore how Angie overcame her resistance to business systems with the help of a CPA and stress the importance of systematizing business operations for success.

John reflects on his own transition from working for a major company to managing a business, highlighting the necessity of understanding finances and planning strategically to ensure a coaching business can be profitable and sustainable.

The conversation covers the need for a business plan, realistic goal setting, knowledge of one's financial needs, and the potential pitfalls of inadequate planning.

Angie and John advocate for coaches to view their practice as a serious business, advising on seeking professional support and recommending resources like the 'Profit First' book, by Mike Michalowicz, for managing business finances effectively.

00:00 Introduction to Common Mistakes in Coaching

01:09 The Importance of Business Management in Coaching

01:31 Personal Experiences and Challenges in Coaching Business

02:14 The Necessity of Business Planning and Management

02:43 Strategies to Overcome Business Management Challenges

04:42 The Reality of Running a Coaching Business

05:22 Misconceptions and Mistakes in Coaching Business

06:02 The Importance of Business Planning and Financial Management

07:12 Practical Tips for Successful Coaching Business

09:16 The Role of Business Coaches and Importance of Business Plan

16:01 The Reality of Running a Business and the Importance of Authenticity

18:43 The Importance of Financial Planning and Tax Management

24:21 Conclusion and Final Thoughts

Angie,

2

what's a common mistake you see coaches

3

making?

4

Angie: Hmm.

5

Well, one of them, I think, is not

taking care of the business side of their

6

practice.

7

John: Oh, do you mean things like

getting new business cards printed

8

and a flashy website and going to

9

networking events?

10

Angie: Don't I wish that was it?

11

No, John.

12

No, no, no.

13

Let's get into it and start the show.

14

John: Angie, you and I both

know that coaching is a

15

business as much as a practice.

16

So most of us, perhaps as coaches

would love to just be able to only do

17

the coaching and not worry about the

rest of it, but life ain't like that.

18

What's been your experience as

a coach of how to manage that

19

and what you, maybe what you see

other people doing and going wrong

20

with

21

as well.

22

Angie: So I have to come in.

23

I'm going to come into this

completely transparent that the

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administrative side of my business

This is the bane of my existence.

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I, and yeah, you're laughing, but

you know, you know me well enough.

26

John: No, I

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know.

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It's good.

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Angie: doing this.

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I, in my world, it's coaching all

day long and I'm just butterflies.

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And even if it's tough work,

it's just, that's my passion.

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My passion isn't being the office

administrator for myself, so, yeah,

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uh, I don't know what to say right

34

now.

35

I hate it.

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John: I, I fairly well agree with

you, but I, I pretty much agree.

37

And I feel it's my least favorite

part of the business, but also if

38

you don't take care of this stuff,

you're going to have problems.

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And I do feel in my experience, a

lot of coaching programs will teach

40

you how to coach, but very few of

them teach you the business of.

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Running a business, managing your

coaching business, marketing your

42

coaching business, filing your

taxes, all that kind of stuff, that

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you really do need to be on top

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of.

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What, how have you dealt with it?

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As someone who doesn't enjoy

this, how have you combated

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this and stayed on top of it?

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Angie: So, and yeah, obviously

I was coming into it giving you

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the authentic transparent self

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on that, but It's necessary to your point.

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It is a business.

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It's my business.

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And I'm very serious, this isn't part

time for me, so I really had to look at it

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and say, what am I, what do I need to do?

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Without going through the lengthy lessons

I learned, because what did I know?

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I didn't know how to run a business I've

been in, around a long time, so QuickBooks

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wasn't necessarily around, when I began,

so everything was very like, ink and

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paper and I didn't know, systematize,

because there wasn't a lot available, but

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then, As the systems became available,

I found that that didn't make it

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easier because I was resisting

that as well, because I'd been

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used to doing it a certain way.

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So,

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yeah, it was actually a

CPA who finally said to me,

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You need to get this in order.

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We cannot have the like, And I'm making

the joke here, but ten shoe boxes

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full of receipts and forms and that is

just, it was just so, it was a mess.

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I lip skated my way through it

because I didn't know how to do it.

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Nobody was there to teach me and

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I didn't know.

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I just didn't

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know.

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I knew I was a coach.

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Oh,

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really?

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John: Same here.

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No I came from a career of

working for a major company.

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I worked for an international airline.

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I had no idea how to manage a business

or anything else, even though I did

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actually did business studies at

school, but that was a long time ago.

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I think the only thing that I took

away from that was how to balance

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checkbook and he has a checkbook anymore,

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Angie: I do.

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John: apart from you, he does no one

else, Angie, sorry, it's just you.

84

The reality of it for me was I

had no idea how to run a business.

85

I really just did want to show up and

do my coaching calls and take the money

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and that's kind of it, but that's not

all there is to, to running a business

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and you're probably not going to last

very long, or you're going to end

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up even worse situations of having

the tax man knocking on your door.

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And wanting some money from

you, or maybe even worse.

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So this is just stuff that

we have to take care of.

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And I've done coaching with

other coaches for a long time.

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So a lot of the coaching I've done with

the Heart of Echo organization has been

93

coaching people with coaching businesses.

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And I see this a lot.

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I see them all focusing

on the wrong things.

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They're focused on the website, they're

focused on getting the business cards,

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they're focused on the networking events

like we talked about right at the start.

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It was kind of a joke, but it was a

joke based in truth that that's what

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people are thinking about when they

think about doing this as a business.

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And it is not.

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It's not enough.

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And those things are not even important.

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Like I, about the times I had business

cards done and not only are you

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sentencing yourself to death by email

from Vistaprint, but you're also going

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to be, but you're also going to be

finding, trying to find situations to

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use them and probably never use them

or ending up with a load of business

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cards that at some point either

gonna just fade or get thrown away.

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It's a waste of money in most situations,

and it's a waste of time, so put

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your energy where it really matters

in the things of, alright, if you

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were going to create a business plan.

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And you, maybe you're going

to work with a client to help

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them create a business plan.

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What would you do for yourself?

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What would be on there?

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What would be on your list of

things to do and take care of to

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make sure that you had a solid long

lasting business that was going to

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stay out of

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trouble?

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Angie: I think so many things come to mind

because like yourself, all joking aside,

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I, I did have the experience with that

CPA and, uh, like the skies open the sun

121

shone through and I was like, Oh, okay.

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So I need to do this.

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I need to really be aware of where I'm,

what I'm doing here with my business.

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And now, obviously a million years later.

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Now I train people and teach

people on how to create like at

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least a beginnings of the business

plan and the structure, right?

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And what do you really need for the

type of business that you are in?

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Excuse me.

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So I think that's important to lay that

out and say, okay, but am I doing that?

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Am I making sure that I'm taking care of.

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You know what I mean?

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I'm a I'm a straight shooter, you know

when it comes to the tax season and it's

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our tax season right now every single

thing is accounted for every single

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avenue of my business is On the back

end, if I spend money on anything, it's

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got a, not only am I accounting for it,

I'm accounting for it in the right way.

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But for you, I think, I'm curious

what I think for me, it came

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down to systematizing it, right?

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And saying, okay, there

needs to be a system here.

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What does that system look like?

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But I don't know if, how do you, what?

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What did you do?

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John: I had a bit of touch and go at the

start of making, of making things happen.

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So it was for me, being a Chambers

of Commerce event and speaking to a

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bookkeeper that, that helped me out.

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Much like you with your CPA friend of

okay, well I can actually pay someone

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else to take this pain away from me.

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But I do think the.

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Biggest challenge I had and

maybe still have is the numbers.

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Like you start talking numbers

with me, my eyes was, my eyes will

150

glaze over and you will see it.

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But as coaches, as business owners,

you need to know your numbers.

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And we also need to work

from an end result backwards.

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What do you know how much you want

to be making a year as a coach?

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And if you do, then okay working backwards

how many clients would you need to have?

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each month, or how much money

would you need to get each

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month in order to do that?

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Then how much money would

you need to have each week?

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When you know that, okay based on

what you're charging your clients,

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how many clients would you need

to have in order to be able to

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hit that per week and per month?

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Does that mean you need

to raise your prices?

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Does it need, mean you need to

get a bit more realistic about

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what you're going to be earning,

164

but also take into consideration

That a chunk of whatever you have

165

there is also going to be money

that you have to pay in taxes.

166

So we're, we are looking at net income,

ideally not gross income because

167

you have to take into consideration

what you're going to have after tax.

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Angie: First of all, I think

you hit on it very early on.

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The first step, if you decide that you're

going to be, I want to be a coach, right?

170

I'm going to be this person that is,

going out independently there definitely

171

needs to be that business plan.

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And it is a journey.

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So you do need to begin with the

end in mind so you can structure.

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Your path of getting there to your

point if you need to make like,

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what are your what's your income?

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I mean, I'm sorry, not your income.

177

What are your household

bills expenditures?

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What does that look like?

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I'm gonna say this because I know

people are gonna come at me and say I'm

180

sorry I didn't see CPA at the end of

your last name So I'm just saying that

181

this is from experience and I'm not

pretending to be a CPA I'm just talking

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a couple of really good practices in

terms of setting up your business.

183

And that first piece is how much do I,

what are my expenditures every month?

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Do I have to pay for health insurance?

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Do I have to pay, this is

probably another session for us.

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Business insurance.

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I do have business insurance, by the way.

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How much does it cost me to keep

the lights on and my belly full?

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All of the basics of life and then

some because, what else are you doing

190

besides, living and breathing and working?

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So, I think that a lot of coaches

or new business owners they shy away

192

from that because I think that it

becomes a little bit real for them.

193

And then they go, Oh my gosh, I never

realized that it cost me, and I'm making

194

up this number, the cost of running

my household including medicine and

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food and, lights and all is 75, 000.

196

Holy smokes.

197

I think that realization is why people

push away from it a little bit more, and

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then go, well, I can't focus on this.

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I just have to go out and make money.

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Mmm.

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Big mistake.

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Huge mistake.

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John: Yeah.

204

I think it is an interesting question.

205

I've got a number of times

as to should you have seed

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money for starting a business?

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Even a coaching business is

gonna help you a lot if you do.

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If you

209

Angie: If,

210

wait, what?

211

John: there's

212

Angie: have what money, What is

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John: seed

214

money?

215

Angie: seed money?

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John: like some money back

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as a

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Angie: Oh, okay.

219

Like working

220

John: until you, yeah, capital to,

until you can get up to earning

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what you really need to, so the

seed, the seed plant, to plant the

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seeds and

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help it

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grow.

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Angie: How did I get to be 55 years

old and I've never heard that saying?

226

That's awesome.

227

Okay.

228

I just wanted to check in, John.

229

I'm like, what does

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that even mean?

231

Got you.

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John: I'm glad you asked because there

may be other people wondering exactly

233

the same thing who now have also been

enlightened and But yeah, if you have

234

that it's gonna be a helpful buffer for

you Especially if you have actually taken

235

a look at how much do you need to earn?

236

How in order to be able to

cover your living expenses?

237

That's an important thing to know

and Then how much do you need

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before you actually get into profit?

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Which realistically is what you

need to look at is that at what

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point are you making a profit?

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And if you're not how long can you

sustain that and what are you going to do?

242

To get yourself into profit so it

can't be onesie twosie bits of coaching

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here and we'll see how it goes.

244

It needs to be a lot more strategic which

is about treating this as a business

245

rather than as A side hustle a hobby

or whatever else it's not being casual

246

about this And recognizing that there's

no big organization unless you're better

247

off coaching or something like that.

248

There's no big organization

taking care of everything for you.

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If you are doing your own, if

you're running your own coaching

250

business, it's all on you.

251

And no, definitely take

get support as well.

252

Get support and advice from

people who can do that.

253

I'm lucky that I have a good, what

we call here in Spain, a head store.

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These are people they take care of.

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Like a lot of the legal and

accounting side of business.

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They help me submit my, help me

submit my taxes every quarter

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because we do it quarterly here.

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And I still have the pain, the

regular pain of having to get all

259

my tax information ready for them.

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But I do it, and I like to be, I like

to have that stuff ready and planned in

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advance because I think it's just the

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cost of doing

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business.

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Angie: There's the key.

265

I think that's the thing

that, that's a mindset.

266

Let's face it.

267

You and I've talked about this.

268

Most people that come into

coaching are not doing it like,

269

out of high school, right?

270

They've already had established

either businesses or professional

271

lives that have somehow, pivoted

them toward, I want to be a coach.

272

And for many people, it's a transition

and I think that can be great, but it

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also can hinder them because there's

only a limited amount of time that they

274

can spend in making that transition.

275

So maybe the first question that you

want, like everybody really needs to

276

ask themselves out of the gate is,

what is my vision for this business?

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Like, is it going to be?

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You know a side hustle a side gig.

279

I don't like to say side hustle because

I feel like it minimizes it I don't

280

know I have to come up with something

different to say there But you know what?

281

I mean when I say that is this

something that I want to be doing?

282

In three years, one to three years

transition time, is this something

283

that I want to be doing full time?

284

And then having, cause I do have

people that come to me and say, I at

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least need to replace my gross income.

286

Okay.

287

So then what does that look like?

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Right?

289

What are the verticals that

you're incorporating into your

290

business that make that happen?

291

That's great, but I think also on the

other side is that having some realistic

292

I'm the swing from the fence, for the

fence is kind of a girl, if I say I'm

293

going to do something, I'm not doing

it small, I'm doing it big, I'm not

294

going guppy hunting, I'm going for

the shore, so this way, if I don't

295

exactly hit that, I'm certainly going

to be further ahead than if I'm guppy

296

hunting,

297

And I think that's a great mindset,

but I think too, the structure, what

298

you keep saying is that structure

needs to be in place and saying, okay,

299

how do I really, how can this happen?

300

What is the timeline?

301

Do I have the funding to do that?

302

So that I don't sail by default

because you and I've talked,

303

what's the, like, what is it?

304

80%?

305

You, you had done some research.

306

80 percent of coaching businesses

307

fail

308

in the first first three years.

309

And the number one reason, poor planning.

310

Not

311

John: Yeah.

312

I think

313

Angie: go ahead.

314

They

315

John: whilst we're on mindset

where we want to go with this is

316

something that I've observed as

well and to some degree experience.

317

If you are not.

318

Operating your business as a business

owner, should you are not going

319

to feel like a proper business

owner, you're not going to feel

320

authentic in what you're doing.

321

There's going to be that little

part of you that knows you're

322

not really taking care of things

in the way that you should be.

323

And therefore you're not.

324

Living your authenticity for

yourself, for your clients.

325

Hmm, that's going to have

some knock on effects for you.

326

So this is one reason why this

is really important to address.

327

I've seen people come

unstuck with this stuff.

328

I've seen people who are supposed

to be top level coaches have

329

multiple cards fail when trying to

pay for things because they haven't

330

really looked after their finances.

331

They talk a good game, but they

332

don't

333

walk their talk.

334

Angie: look at the window dressing.

335

You know me.

336

I love that saying.

337

It's the, what do I look

like from the outside?

338

Look at my new business card.

339

Everybody check out my new website.

340

Look at this.

341

Look at that.

342

Look at all the shiny objects.

343

And the business is happening.

344

I think one of the things that I

tell my clients that are business

345

owners are transitioning and many,

many of my clients have actually

346

transitioned out of super high level

jobs careers and pickup coaches.

347

So I think that's a good thing.

348

And I caution them and say, I know you've

been working for this company at this

349

level doing these things, but you're not,

you've not been a business owner yet.

350

So here are some of the best practices.

351

So the first thing is.

352

What is your goal right?

353

Ultimately, how do you

want this business to look?

354

Secondly is do you have the money?

355

Do you have the seed money to thank

you, to Get you through that tough time

356

Because the failure isn't that you're do

you don't have a good product or you're

357

not a great coach most of the time The

failure is we've run out of money I have

358

to just now I'm stuck now I have to stay

there went that dream and that's not true.

359

It's simply just not true It's just that

sometimes we go out things with that

360

Yeah, you know letting the bucking bronco

out and you know do its thing But we're

361

forgetting about what needs to go on You

need to be the ceo of your own business.

362

You need to treat yourself and say, okay

if I were being watched right now by

363

a CEO or high level person, would I be

doing anything differently in my business?

364

And you need to be that person and not

give yourself that, that slack of like,

365

well, you know, this happened and that

366

happened.

367

It's a business.

368

When you open those doors, you need

to be ready for business and taking

369

on the customers, so to speak.

370

Clients.

371

John: could be a sign that

you need a business coach.

372

If you haven't taken care

of this stuff, right.

373

And and don't think, Oh, I

don't know if I can afford it.

374

It's like, well, that's going

to be a worthwhile investment.

375

If it gets you ahead of the crowd

way sooner, because you know,

376

that's what coaching is for, um, for

getting the shortcuts, getting you

377

to the results quicker with people

who've already trodden the path and

378

can help you get there, but yeah.

379

Now, just from the whole mindset

perspective of this is Run your

380

business like a business whether

it's full time or part time.

381

You still need to show up for it as a

business And I know I see it's not just

382

with coaches, but with people who do

like multi level marketing businesses

383

and things like that and You know those

kinds of businesses often will make

384

lots of big promises about oh You're

gonna have all extra time back because

385

you'll be spending time with your

family and people going to The vast,

386

but we know that the vast majority

of people who do these things end up

387

spending more money than they ever make.

388

And a big reason for that is because

the people who do well are the ones

389

who treat it like a business and put

in the effort and the action that

390

needs to happen to get the results.

391

And most people are not

prepared to do that.

392

Just know if you're

going to have a business.

393

It's a big responsibility.

394

It's a lot of work and it's

not just showing up and

395

doing the bits that are nice.

396

It's also showing up and doing

the rest of it as well to

397

have

398

that business.

399

Angie: Yeah.

400

Absolutely.

401

And I do, listen, I think one you hit it

on, and I'm not trying to be redundant,

402

but I do think that if you don't have

any business experience other than,

403

The organization that you work in or

whatever that it is worth hiring somebody

404

a professional whether it's a business

coach or a Financial professional

405

at least to say to you at least get

this portion of it in place, right?

406

Let's like, you know set your goals

figure out how to work that backward

407

right any journey any journey We

always need to know where the end is

408

so that we know how to get there Right.

409

If I say I'm going to fly to Spain

to see John, well, I'm hoping that

410

the airline knows the best and

the shortest way to get there.

411

So we don't run out of fuel along the way,

like it sounds funny, but that's really

412

how we need to treat our businesses.

413

How are we going to get to that

destination that we want and create,

414

I think this is something that

I didn't say earlier, but super

415

important to do it earlier than later.

416

I wasn't certainly making any excuses

that oh, I didn't have technology.

417

I did the best that I could, but I

definitely was not anywhere near doing

418

it as a professional because again, what

did I know about business ownership?

419

And my first business wasn't

actually coaching, I had

420

other businesses before that.

421

Now I'm like, oh, you have

to do all these things.

422

I have a list.

423

I actually just handed it to a

neighbor the other day and said,

424

here's what you need to do.

425

There are some serious best practices

that will keep us out of the weeds.

426

We definitely need to pay our taxes.

427

That's another thing.

428

That's a mistake people make because

they feel like, well, whatever

429

I earn, I keep.

430

Well, you're embezzling from yourself,

431

you know, essentially,

432

John: And you might think that

you're hovering under the radar.

433

Maybe you'll get away with it,

but then again, maybe you won't.

434

And if you get caught with that, well,

I'm sorry, but you're pretty much fucked.

435

And that's just the reality of it.

436

I might have to beat that word out,

but that's just the reality of it.

437

It's going to screw you up

for the rest of your business.

438

And it's going to mean people can't

trust you if they can find like.

439

Felony tax evasion charges or anything

like that against your record.

440

Not a

441

good

442

look

443

Angie: No, but you know what I

think for most people though,

444

John, it comes out as ignorance.

445

I think that they feel like,

oh, if somebody is paying me.

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Let's just say five thousand dollars.

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Well, that's my money.

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Well, it is your money, but they're

like, but I'm not making any other money.

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I need every penny of that

to keep the lights on.

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Guess who doesn't care though?

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John: the

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taxman.

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Angie: They don't care.

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So you definitely need to make sure

that, and again, I'm not a CPA and

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I don't play one on TV, but for like

right out of the gate, if there's

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one thing you walk away with from,

walk away from this session today.

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Is to take out money, put that money aside

so that you're not going to get yourself

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into other troubles along the way.

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That is the last problem that

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you

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need.

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John: So here's something I

want to recommend for people.

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'cause we talked about all the

things not to do and on some

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of the best practices to do.

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I wanna give you a great resource.

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It's a book by Mike IC and

it is called Profit First.

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And it is all about managing your

finances and having like different

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like buckets or pockets to put your

money into to make sure you do.

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Put the money aside for paying

your taxes that you do build your

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business in a way that's going to

help you get into profit rather than

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just keep pumping money into it.

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Definitely take care

of that side of thing.

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Profit first is the name of the book.

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We'll put a link in the show notes for

anyone who wants to go and check that

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out, but it's a great book and it will

help you manage your business finances,

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neither of us are business accountants

or CPAs as Angie has said, but we have.

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Businesses and we have been

coaching for a long time.

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We know what the issues are that

you're going to come up against.

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But I think we pretty much,

bang this one to rights today.

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And more than anything else stay on

top of this and take some action.

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And don't, don't just let this

sort of keep going as something

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that I'll get to it later.

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Or as you say, no, I

need the money right now.

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So, well, uh, just going to have

to deal with the reality of.

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Maybe coming a bit short and

figure out what you're going to

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do to correct that rather than

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having potential issues

with the tax office

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at

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some point in your

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Angie: Sure.

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Absolutely.

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Awesome.

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John: Excellent.

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Let's wrap things up there, but

we will be back again very soon

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with another episode tackling some

of the issues around coaching.

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In fact, I think in our next episode,

we're going to be talking about how to

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launch

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your coaching business.

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Will you hope you'll

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be joining us for that.

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So from myself at Angie,

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bye for

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now.

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Angie: See ya!