Dan thought he had two choices with his coaching, and both of them were bad.
I've advised Dan on and off for 16 years -- even creating his most successful service. He runs a multi-million dollar company and has built a big reputation with entrepreneurs around the world.
When we talked recently, he told me he'd started coaching founders on the side. He had one and a half clients at $1,500 a call (3 calls a month).
He believed he only had a choice of growing coaching into a full-time business, which meant taking time away from the company he'd built. Or he could keep selling calls on the side, and he didn't know if that would ever be worth it.
At $1,500 a call, it isn't. (yes, this is a lot of money to talk for an hour)
Coaching by the hour pays Dan a relatively small amount of money today. But, the same hour spent growing his company gets leveraged throughout his business. It raises the company's asset value and produces future profits that don't require any more work from him.
The thing is coaching is a lot of fun and rewarding to see your advice help someone succeed. The downside is it feels like a job really fast, especially if you do like most coaches.
Most entrepreneurs who start coaching go all "type A" and turn it into their full-time business and eventually leave behind the business that made them worth hiring.
I gave Dan a third option. Stay in his company and turn a handful of coaching hours into future income. I'll show how in a second.
Say you take the first option and wind down your business to coach full-time.
Coaching is now your whole income. So you sell more calls, and when your calendar fills up, you launch a group program to fit more people into the same hours.
For a while, your old results carry you. Founders hire you because of the business you ran. Eventually those results get stale, and your coaching business becomes the only proof you point to. Sure, running a successful coaching business is still a business, but many of lessons you learn from it aren't applicable to your clients' businesses. (unless you're a coach for coaches)
Then something I've seen happen over and over with coaches... their weeks fill up with calls and they never have a mental break from solving other people's problems.
Then they burn out and quit.
I've burnt out from coaching too.
I was coaching every week. Even with group programs, I didn't have enough time to decompress from the mental demands of my businesses and my clients.
So I redesigned my coaching to have all client work on the first and third weeks of the month. This allowed me to oversee my other companies by doing all business growth activities on the second and fourth weeks.
The weeks without coaching gave me back the room to decompress. And in the redesign I was able to generate a multi-six figure income from those two client weeks.
My companies pay my bills, so I'm able to price my coaching on the authority I've built and can work with founders I believe in. I'm able to take part of my pay as a stake in their outcome, even when it takes years to pay off. I've invested my time into a dozen businesses in my career.
A full-time coach can't afford to wait that long. They have to get paid now so they can't think like an investor.
Coaching also shows me the inside of other businesses, what's working and what isn't. That made me a better coach and consultant, but I've used what I learned to improve my own businesses.
That's why I told Dan to take a fee plus a stake in the outcome.
With his level of authority, Dan can leverage his time with a select few founders the same way he leverages it in his own company. He helps them increase their asset value, and he owns a piece of that future outcome. That makes every hour he spends with them as valuable as an hour in his own business. Maybe more, since each stake diversifies his assets beyond his company.
Like me, he also gets to see what those founders know and do that works for them, and he can bring it back to his own company, leveraging his time twice.
A handful of those founders could pay him as much as $500,000 in fees each year, plus a stake in each of their companies. He'd get the best of both worlds: the income and asset value from owning businesses and the personal satisfaction of helping other entrepreneurs.
(If you want to go after equity, I laid out my five rules for getting it here)
Here's how I got started as a business coach and how I leveraged coaching in my life...
When I ran my first ad agency, a number of my clients told me my campaigns had failed to increase their revenue.
I dug into their businesses to find out why. The ads were bringing in more customers, but their employees couldn't handle the extra volume. Orders were getting delayed or cancelled.
That set me on a path to learning how to improve business operations. Before we ran ads, I started consulting with my clients on how many new customers they could handle and how to increase that number.
Then those clients started referring their friends to have me coach them on their businesses.
The big lesson: the people most likely to pay for your advice are already paying you for your service.
Your expertise gained from your business is the reason clients would pay for your advice.
Go through your current clients and pick out the ones who you believe would pay to have you advising them. As you gain experience coaching, you can incorporate it as a part of every client engagement or do it on the side like Dan decided to do.
A handful of them can add a multi-six figure income on top of what your company makes. The right client might give you a stake in what you help them build.
Selling your thinking at scale is a goal I hope you set for yourself and coaching is a great first step.
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PS. Reply ADVICE and I'll help you get your first five figure coaching client.
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