Setting up a Coaching Business this year - legalities to consider
Is this the year you embrace something new and set up your coaching business? While there’s plenty to consider when setting up a coaching business, the importance of getting in place your processes and legal formalities should not be underestimated. By getting the foundations sorted from the start, your business will be seen as credible. Plus, you’ll ensure you are personally protected should things go wrong.
Ensuring you take the correct steps to begin with will save time, money and stress in the future. Making your life as a coach a whole lot simpler. In this article, you’ll learn the 5 key steps for how to set up your coaching business for success this year.
Looking for coaching agreements to give to clients? Find our legal templates here:
Step 1 - Establish your web presence
Because most business coaches operate online, your shop front or sign to say ‘I’m open for business’ is essentially your online footprint - predominately your website. Having a website helps to give your business instant credibility. As soon as people are given a recommendation, they search online and type in your name. If you’re not on the web, people will wonder if you and your business even exist.
Because your business operates online, potential clients are looking for social proof on the internet. By having your Terms of Use and Privacy Policy visible, you as a coach are demonstrating by example that you recognise risk in business and that you’ve taken steps to mitigate it.
A good way to think about your Privacy Policy and Terms of Use is by likening them to the doors, windows and locks you would have if you worked out of a bricks and mortar location.
Why you need terms of use
Your website’s terms of use are a contract between you and the people who come and look at your site. So, they don’t have to be clients, it is for anyone who comes and browses your website.
You need to have accurate terms of use because, for example, if someone reads a blog you’ve written and then goes and implements strategies from the blog. If what they implement doesn’t work out for them, your terms of use policy has made it clear upfront that you are sharing information online however there is no coach/ client relationship with you. This helps to make it obvious that visiting your website doesn’t make them a client and that you limit any liability you might otherwise have had.
Why you need a privacy policy
A privacy policy is important because there are laws in place around how you can use people’s data that you collect. For example, you might have a free downloadable resource where people have to provide their email address and sign up to your mailing list. You want to make sure you are transparent about how you use this data because you are handling personal information.
Step 2 - Get clear on coach and client obligations
As part of coaching, you’ll help your client move from a ‘before’ position to set some goals and end up in a certain desired ’after’ position. But this doesn’t happen magically. It’s only going to happen because both parties are working towards it. So if a client doesn’t meet their obligations and targets, then of course they are not going to get the desired results.
For this reason, it is very important for you as a coach to protect yourself against client inaction. Because coaching is a relationship of trust, where you transfer your knowledge, systems and processes to your client, you need to be very clear where the scope of your assistance ends.
For this reason you need a Coaching Agreement which details who you help, the programs you offer, the scope of what is included as well as specific details of what you do not do as part of this coaching relationship. Because there are certain legal, accounting and financial planning elements that a coach would not be helping with or liable for.
Step 3 - Determine pricing and payment
Just as a coach and client relationship needs to be built on the foundations of trust, so too should there be transparency around pricing and payment right from the start. You need to make it really clear what your client is to pay and the different types of payment methods available to them.
It’s important to make sure it’s easy for people to pay you, which often involves accepting online payments and sending reminders. Point out that you offer credit card payment options and specify that different types of payments may attract fees from third-party payment facilities. Or you might choose to absorb the fees into your pricing structure. You also want to be clear what currency you charge in, if you take your coaching business global. All of this information should be covered off in a formalised Coaching Agreement.
Step 4 - Boundaries and scoping
Creating boundaries around cancellation is important. It’s about making sure people show up and they don’t call you an hour before a session to say they can’t make the coaching session. You want to have in place policies that say, for example, if they do not give 48 hours’ notice (or whatever you choose to include in your agreement), that they will then forfeit the money they’ve already paid upfront.
It’s important to make it clear that you are not going to hold their place and not get paid. Because with such short notice, you can’t then just fill your calendar with something else. So it’s really about setting those boundaries and being clear in your Coaching Agreement that if they do need to change a meeting time, you have already clearly outlined what possibilities are available to them.
Step 5 - Protecting your IP
The protection of your intellectual property, or IP, should also be covered off in your Coaching Agreement. Any type of IP you share with clients, whether it be by the way of worksheets or methods to implement in their business, will be yours. Consider trademarking any brand names or methods and ensure you have copyright over your worksheets by using the © symbol.
Inevitably, particularly with clients who work the same industry, the client may go and implement your method into their own business, because a lot of coaches train other coaches. It is important to ensure that you’ve made it clear what they can and can’t share with others is absolutely crucial.
In your agreement you should have a lawyer word it in a way that says even if you don’t have a licensing agreement, it is clear that none of your worksheets or information is to be shared. If clients wish to share it with a third party, then that can be discussed further with you to ensure you are comfortable with receiving appropriate attribution and remuneration for your efforts.
Set yourself up for success
Setting up a coaching business this year will require hard work and dedication, but with the right processes and systems in place, there’s nothing stopping you from achieving your business goals.
While it’s tempting to drive straight into onboarding clients, it’s always a wise idea to seek proper legal advice from someone like me, before taking on any clients and ensure you are starting on the right path to protect you and your business.
Related article: The art of getting paid: How to recover unpaid invoices
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Coaching success starts with these Business Coaching Agreement must-haves
Are you setting up a coaching business or already have one? Take a look at our life coaching agreement template and business coaching agreement template. Don’t get caught out because you are busy and forget about the legal aspects you need to cover before you launch. You are invited to book an obligation free chat with me here.