How Much Does Business Coaching Cost?
One of the first questions business owners want to know when they call our company is: How much does business coaching cost?
Although this is a very difficult question to answer, I will try to do my best here to explain some general time and pricing guidelines. Also, I will answer the biggest elephant in the business coaching room, “How do you measure Return On Investment (ROI) for business coaching?”
You must determine the cost of business coaching in at least two measures: time and money. Later on I’ll discuss other elements of ROI (Return On Investment) that are also important.
As you evaluate coaching, you need to find out how much time you should reasonably expect to “buy back” into your life for those things that matter most. The time costs are actually more important than the money costs.
Time is the only non-renewable resource, so spending small percentages of time and money now should be able to provide you with larger percentages of time and money later.
To implement good business coaching, you are going to need to spend a minimum of 2-5 hours per week with no distraction working on your business articulating and casting vision, mission, values, while capturing and implementing systems and processes.
We have found that an investment of 2-5 hours per week over 1-3 years can offer a business owner exponential return on both time and money investment.
There is absolutely no quick-fix option. Business coaching and implementation is just like planting a tree; care taken in the short run will lead to predictable fruit in the long run.
If you take two hours to train someone else on a daily 5 minute task, that one task will save you over 20 hours every year…forever. The math is amazing; two hours invested for a 20+ hour return year after year.
Continue reading this article for more details regarding the monetary cost of business coaching, but for you drivers who just need the bullet points, here you go.
You should look to budget between 1%-3% of real revenue (total revenue minus cost of goods sold…again I drill down on this later in this article) into ongoing business coaching.
Here is a general range for various coaching engagements:
Do-It-Yourself coaching where the coach has built a system that you follow such as digital course delivery with specified roadmaps, will range between $150 to $300 per month
Investment range: $1,800 to $3,600
Do-It-with-Us-And-Others coaching where you are a part of group coaching with along with access to a specific coach will range between $1,000 and $2,500 per month
Investment range: $12,000 to $30,000 per year
Do-It-With-Us-Exclusively coaching partnering you directly in a 1-on-1 relationship with a coach will range from $2,500 to $5,000 per month
Investment range: $30,000 to $60,000 per year
Do-It-For-Us coaching where we bring a coaching team on-site for multiple days upfront to build out your systems followed by a repetitious, long-term series of implementation and accountability will range from $75,000 to $150,000 for the engagement.
Investment range: $75,000 to $150,000 per engagement
The investment in healthy business coaching that leads to demonstrable results is much like choosing a University to attend or a home to buy. You can spend as much or as little as you wish. Much of your decision is filtered through your specific dreams, ambitions, and desired results. With so many options available, price ranges can vary, drastically.
You’re going to be connected to your business every day for as long as you own it, and selecting the right coach and the right coaching system the first time is critical to ensure cash profitability, longevity, and a business you own rather than a business that owns you! Because of this, most business owners elect to hire a business coach that will push them in the short run, so they can build a healthy, sellable business in the long-run.
Unfortunately, some people only focus on the initial investment of business coaching with the goal of finding the cheapest coach, therefore sacrificing clarity, effort, vision, and their own values which inevitably leads to regret – especially since it is usually more difficult to sell a business than it is a home.
How to find good business coaching services
Some of the most common features that you should look for as you select and invest in business coaching:
The little known secret (shhh!) is that business owners usually sign up for business coaching for the “curriculum”, but they stay for accountability. Let’s face it, if you could do it yourself (most can’t), you wouldn’t be reading this article.
Is there a prescribed coaching curriculum that is design to take you from where you are to where you wish to be
Principle-based coaching walks you and permanently installs the foundations of health that have existed in business forever, and will always remain (vision, mission, values, systems, and process). Principally, what works today will work again tomorrow, so a principle-based coach helps you to pour the “concrete” foundation of your business with the timeless principles for which strategy can then come sit on top of.
…Or, Strategy-Based Coaching?:
Strategy-based coaching is a type of coaching that walks you through non-permanent “strategies” that change continuously (think marketing strategy, or sales strategy, or inventory strategy). Strategically, what works today will not work tomorrow, so a strategy coach helps you to remain current to shifting tides.
Past and current client successes:
Find out some real-life stories of success and results that other business owners have realized.
Past and current client failures:
Find out some stories where your clients did not see the results they hoped for? There is no business coaching that produces 100% results all of the time.
How they determine expected cash profitability:
A good business coach should have a system they implement into your business to project your cash profit…not just your “Net Income” or “Net Profit”…but cash profit in an account at the end of the year.
Some features that actually are not important as you think in business coaching:
Principle-based coaches will train you on principles that work regardless of your industry…in fact it is even more valuable because you will learn from a variety of perspectives instead of focused only on your own industry.
In my first five years as a business coach, with thousands of coaching hours, I had two people ask me about my coaching credentials. Ironically, both were other business coaches! It is more about outcomes and results, and less about a certificate.
“Per Hour” Rates:
In business coaching you should rarely if ever pay by the hour. Many times people will ask, “can we hop on a call for an hour…I’ll compensate you for your time?” We don’t charge by the hour because the results of our coaching are exponential…not linear. For a good business coach you are not just paying for their time, but also for the prior thousands of hours spent researching, designing, and building plug and play roadmaps and the prior thousands of hours coaching other peer business owners like you where they are now able to respond in just a few seconds with the wisdom or tools that it otherwise would have taken you days, weeks, months, or years to develop. A good business coach will charge based on the value they deliver to you and your business, instead of time exchanged.
Some business owners have come to us having already gone through a coaching program promising to “10X” or “20X” their business. Many coaching programs advertise as business coaching, but really spend most of their time on marketing. Beware. Usually, business owners need coaching for the entire business; hiring and onboarding, structure, fiscal reports, delegation, scheduling, process maps, budgets, job roles, sales process, marketing roadmaps, etc. If you “10X” a poorly run business, then the “10X” will walk right out the back door as soon as it comes in.
As you can see, there are many options to think through. When someone receives rates from our company, we thoroughly examine each option as to educate the heroic business owner on each coaching option. We want to match the coaching deliverable to the size, scope, and outcome of each business owner.
How much does business coaching cost?
The average price of a business coaching can fall between $200 and $5,000 per month and at times go as high as $10,000 per month. That can seem high, but remember this…bankruptcy and broken homes due to a business that consumes you cost much more than that!
Each year a business owner can typically expect to budget roughly up to 1.5% to 3% of their real revenue on business coaching.
Real revenue is a simple number factored this way…
Total Revenue – Cost Of Goods Sold (if applicable) = Real Revenue
For example, if a construction company generates $4,800,000 each year and they spend $3,000,000 to pay subcontractors, and purchase materials from vendors, then their real revenue is $4,800,000 minus $3,000,000 which leaves $1,800,000 remaining as revenue the business can use to operate.
For service companies which often don’t have much in the way of Cost Of Goods, it may look like this; $1,400,000 in revenue minus $0 in Cost Of Goods leaves a real revenue of $1,400,000.
Once real revenue is determined, then multiply that number by 1.5% to 3% and you should have a ballpark of where to start for investment.
The construction company above can look to invest in the ballpark of up to $27,000 to $54,000 per year ($2,250 to $4,500 per month) in good business coaching.
The service company above can look to invest in the ballpark of up to $21,000 to $42,000 per year in good business coaching ($1,750 to $3,500 per month).
A small business with $250,000 of annual real revenue can look to invest up to $3,750 to $7,500 per year ($312 to $625 per month) in good business coaching.
How the size, margin, complexity, and cash flow of your business will affect the cost of business coaching
When a business owner inquires how much our coaching costs, their business size, margin, complexity, and cash flow are key factors. We have four different packages we offer our customers. Unlike most business coaching firms we will ask targeted questions of your business to determine if you are ready for the work that business coaching requires. This intentional understanding leads to less stress and better results for the business owner.
The larger your business team and revenue, the more systems, processes, and buy-in that will need to take place. The good news is that your available cash should be growing according to your team so you will be able to make the necessary investment.
The larger your “Net Margin” the more flexibility and speed you will have to engage. If your margins are low, that is completely ok…for now. Right away, we will walk through our financial modules and steps to make sure we can stabilize financials before moving deep into systems and processes.
Some businesses have the simplicity of a hot dog stand compared to the complexity of an inventory-heavy, process-heavy healthcare clinic. These complexities determine the amount of time needed to spend on individual systems and processes.
We also have to ensure that each business owner has adequate cash flow to invest. We have two rules that we ask of each business owner to uphold:
Rule One: Please do everything we ask you to do. We have laid out our Business On Purpose Roadmap that has served hundreds of business owners around the world and has proven itself time and again.
Rule Two: You must have more money coming in than going out. Not even the most magical business coach can magically make money appear.
It would be counterproductive of a business coach to ask you to invest money you do not have. There may be times where spending investor money for business coaching is a good idea, but not before a serious discussion and review is had.
Our coaching deliverables are as follows, with their corresponding price ranges:
1. Business On Purpose Roadmap (Do-It-Yourself…DIY)
We spent the first five years of our business building the Business On Purpose Roadmap coaching system as we documented and captured the tools, templates and principles that we helped business owners just like you build in real-time.
We spent tens of thousands of dollars building the Business On Purpose Roadmap coaching system to walk heroic business owners and their key leaders step-by-step through each dip and turn in building the necessary systems, process, and purpose so they can spend more time working ON their business, be liberated from business chaos, and make time for what matters most.
When we say this is DIY, we are not really telling the truth!
Each business owner and their key leader has a live onboarding call with one of our amazing BOP team members just to make sure you are taken care of and have everything you need. You and your key leader are invited to LIVE coaching calls each month where you are able to receive personalized coaching to your specific coaching challenge.
The Business On Purpose Roadmap allows even the smallest business owners to invest in world-class coaching.
The average business invests between $1,800 to $3,600 per year ($150 to $300 per month) to join this powerful membership community and coaching system. We recommend the DIY option as a necessary first step for business generating less than $350,000 in revenue per year.
2. Combo Group & 1-on-1 Coaching (Do It With Us And Others…DIWUO)
This deliverable includes everything offered in the DIY deliverable above with the massive added three-for-one value of
- Coach-led group meetings live (either in-person or virtual determined by geography) together monthly
- Having 24/7 access for their entire team with the Business On Purpose Roadmap Member Community
- Coach-led 1-on-1 meetings to build out specific elements of the Business On Purpose Roadmap customized to your business
The average business invests between $12,000 to $30,000 per year ($1,000 to $2,500 per month) to join this powerful 1-on-1 coach relationship, peer group mastermind, membership community, and coaching system. We recommend the DIWUO option as a necessary step for business generating between $350,000 to $1,000,000 in real revenue per year.
3. Exclusive 1-on-1 Coaching (Do It With Us Exclusively…DIWUE)
This deliverable includes everything offered in the DIY deliverable above as a foundation, and then a powerful deep-dive into an all out 1-on-1 relationship with a dedicated business coach.
You and your key leaders will meet live (virtual or in-person based on geography) twice-monthly as your dedicated coach walks you step by step through both the Installation and Implementation Roadmaps (see below).
Meeting exclusively with a coach 1-on-1 also offers the luxury of periodic situational coaching as real-world challenges arise throughout the course of business.
We designed this from experience with thousands of coaching engagements. We found that if we met more than twice monthly, implementation and accountability actually decrease. We are more interested in results than “per hour” efficiency.
Of course our coaches are available to you outside of the formal coaching hours as each of you will lay out and agree upon during the onboarding period for those times you have questions and need additional support and encouragement.
You will also join our exclusive Business On Purpose client list and have first dibs on seats for our 12 Week Plan LIVE Events that we host throughout the year.
The average business invests between $30,000 to $60,000 per year ($2,500 to $5,000 per month) to join this powerful 1-on-1 coach relationship, membership community, and coaching system. We recommend the DIWUE option as a necessary step for business generating above $1,000,000 in real revenue per year.
4. Done For You (DFY)
Some business owners would prefer for us to “just come here to my office and build it for us!”
If it were only that easy.
But, we can meet you halfway.
The DFU option means that we come to your business for 3-4 days straight, meet with your entire team and build out the entire Installation Roadmap from scratch until we have the foundation set.
Obviously, there are hundreds of processes within every business so we are never able to complete them all in one sitting. That would take weeks and months of full time work.
Laying the foundation of vision, mission, values, systems, and processes then sets up the business for a season of implementation.
The DFU option is split into two phases:
- The onsite Installation Phase (3 to 4 FULL days)
- The remote Implementation Phase (12 months minimum)
The average business invests between $75,000 and $150,000 to enjoy the convenience of this deliverable. We must be very clear with this option, although we build out much of this for you, we can never be the ones to implement the system…the business owner and key leaders must commit to implement before a contract is signed.
We recommend the DFU option as a step for businesses generating a minimum of $2,500,000 in real revenue per year.
How to measure your Return On Investment (ROI) for business coaching…
This is the biggest elephant in the business coaching room and much like answering the “how much is business coaching?” question, determining a healthy return on investment for business coaching can depend on a variety of factors.
I will show four marks that we look at to determine a healthy return on investment for business coaching.
1. Vision Return On Investment (vROI)
The first step every business owner walks through in the Business On Purpose Roadmap is an articulated, detailed vision story.
This is not a simple paragraph summarizing “what we hope for”. The vision story is a multi-paged, seven-category, detailed layout of the ultimate destination for the business. In it, we ask each business owner to think through and write down every detail from financials, to personnel, to culture, and beyond.
Once written, each business owner begins reviewing their vision monthly to track progress. Good business coaching will lead the business owner towards their written vision.
2. Relational Return On Investment (rROI)
Every business owner we coach has personal and professional relationships. Relationships will only work and grow in response to investments of time, energy, care, thoughtfulness, kindness, etc.
Good business coaching is a continual drumbeat of encouraging the business owner and their key leaders to intentionally reinvest into their relationships, both personal and professional.
3. Financial Return On Investment (fiROI)
Business coaches for years have been trying to figure out how to best put a financial metric on good business coaching so they can demonstrate growth and progress to the business owner.
Within the Business On Purpose Roadmap, our metric is simple…cash profit. Cash profit is not the same as the Net Profit or Net Income line on a Profit & Loss statement; that is a margin of calculation and not reflective of marginal cash on hand.
At the end of each month, quarter, semester, and each year, we want every one of our business owners to realize a defined cash profit percentage (notice, we said total revenue…not just real revenue).
Many of the businesses we coach have seen dramatic increases in total revenue, but that is a poor measure of success. It is not uncommon for a business to grow in total revenue and actually decrease in profit. Not all growth is good growth, so we focus on cash profit.
As I was writing this article, a text came in from one of our heroic business owner clients with all you need to know about the fiROI…
4. Freedom Return On Investment (fROI)
Business owners are notorious for constantly working IN their business going from fire to fire thinking they are the only ones who can do it right. It causes them to constantly throw hail marys and burn the midnight oil in an effort to “catch up”.
Truth is that you will never “catch up” to chaos. Instead, business owners must decide to be liberated from chaos’ talons, and to make time for what matters most.
Within each business owners vision story, there is an entire section articulating the freedom that each business owner would like to experience.
Just last year we had three heroic business owners leave their business for 3 to 4 weeks while their teams ran and grew the business. All three had that goal articulated in their vision story.
I’ll never forget the owner of a small architecture firm in the U.S., and the owner of the firm had a simple freedom goal, “buy Luke a bike”.
She was tired of making revenue, but not making a profit. She wanted the simple freedom of being able to go out and buy her son a bike.
Her fROI? Luke got his bike!
How Business On Purpose coaching compares with other coaching options…
If you do a web search of business coaching you will find lists of companies and articles. Many of them are good and helpful.
As I mentioned earlier, beware of coaching programs that are really “marketing strategy programs” in disguise. Of course we would all love more leads and closed deals, but if we bring those new customers into a poorly run business, then we will certainly create more headaches than we solve.
Some programs offer in-person meetups four times per year.
Other programs offer virtual calls once per month with text-support.
We have seen the best results from programs that offer:
- A clear roadmap up front
- Principle first, strategy second
- Frequent accountability
- Follow up coaching notes that you can access at any time (we use a simple Google Doc setup)
- Coaches that are as interested in the health of your personal life as they are in your professional life (they necessarily co-exist)
- A “flipped classroom” model where you spend your “non-coach” time learn the repetitive content, and spend your “coach” time on the nuance issues
- A CLEAR VISION!
We have tried to be as transparent and open as possible and are proud of the work that you are doing.
Whether you are owning the business, or the business is owning you, our mission is to liberate business owners just like you from the chaos of working IN your business, free you up to work ON your business, and make time for what matters most.
Would you like to schedule a live conversation with one of our helpful Business On Purpose coaches?
Scott Beebe is the founder of Business On Purpose, author of Let Your Business Burn: Stop Putting Out Fires, Discover Purpose, And Build A Business That Matters. Scott also hosts The Business On Purpose Podcast and can be found at mybusinessonpurpose.com.
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