The Coach Space gives you the REAL picture of how much life coaches are really earning
So you’re thinking of starting a life coaching business. You hear it’s a growing industry. You see coaches out there on social media and may even know a few personally… but are they earning a living? How much money do coaches really make?
Whether you have been lured by the prospect of becoming the next Tony Robbins or just looking to earn a decent income while being your own boss, you want a realistic idea of what coaches get paid before you take the plunge.
Accurate data is not easy to come by though, mainly because the term coaching is so broad and doesn’t have a business category of its own. Also, coaching is frequently offered alongside other services such as psychotherapy, personal styling or even interior design.
How long is a piece of string? Let’s find out!
To understand your potential earnings as a coach, you need to gather a lot of evidence and put it into some context. But don’t worry; help is at hand.
Since 2009 I have followed coaches’ careers, mostly from their beginnings. I have worked with some of these coaches, some I’ve mingled with, and others I followed online to see how things panned out for them. So I have some inside information and my observations from over the years.
Firstly a little reality check…The world of coaching is a revolving door; most coaches drop out within a year because success has not come quickly enough to pay the bills. It takes a long time (years) to build a decent income from coaching if you are starting from scratch.
But, yes, it is possible to build a rewarding income stream from coaching if you are determined to do so.
Before we dive into what a coach’s income looks like, there is this…
What coaches are charging and what they are earning are two different things
It is easy to find out what coaches charge for their services; you can see prices on their websites. What their websites do not tell you, though, is how many coaching packages they sell and deliver over a year. Even an experienced coach with a fabulous-looking website and thousands of Instagram followers is probably not selling as many packages as you think… because….
The 80/20 rule
Personal coaches cannot, and do not, coach for 40 hours per week. Most of their time is dedicated to finding new clients and doing the work required to deliver the coaching.
As a general rule, you are looking at coaching for 8 hours per week. This figure will be even lower for a coach in their first year. However, more experienced coaches will coach for maybe 12 hours a week.
The main takeaway is that roughly 80% of your time will not be ‘paid for’ as such, but you will still be working hard. Sales and marketing will take up most of your time.
The good news
Even taking that into account, earning potential is pretty good for the average qualified coach. The International Coach Federation published the results of a study in 2020. It turned out that (combining North America, Western Europe and Oceania), the average yearly income of those surveyed was $58,233 USD.
This is not a bad starting point to see how things could go for you. But to understand your earning potential, we have to bear in mind that…
Coaching is acted out in different ways
Before researching how much you could make as a coach, it helps to define what kind of coaching we’re talking about. Some coaching jobs are done on the payroll; others are self-employed. This alone makes a big difference to what a coach earns.
1 – Executive or corporate coaching
Executive coaching or corporate coaching is probably the safest and quickest route to earning an excellent salary from coaching.
The demand is there. Corporations (i.e. the paying clients) don’t need convincing of the value coaching brings to an organisation. They see very clearly on their bottom line how coaching increases the performance of their managers, and they are willing to pay good money for it.
From being a freshly qualified and ICF accredited coach, depending on previous leadership experience, it is possible to go straight into a $50k salary job. Top executive coaches can earn over $200k. Not bad!
You can do this type of coaching as an employee or as an external self-employed consultant, perhaps partnering with a consultancy that already has contracts with large organisations. The beauty of this arrangement is that you’re not constantly under pressure to find new clients.
2 – The solopreneur practitioner
This is your typical life coach scenario. This coach’s customers are individuals i.e. it’s a B2C business as opposed to B2B like the aforementioned scenario.
This type of coach is self-employed and builds everything from the ground up, perhaps hiring a virtual assistant when things get going.
In the first few years, earnings from coaching are normally low.
Most life coaches start their business as a side hustle, sometimes charging smaller fees while they gain confidence. As they build a portfolio of proven results and their reputation increases, things start to gain momentum.
Depending on how much money is needed to live on and how ambitious they are, they could be quitting their day job after three years.
After five years in business, a life coach can be earning from $35,000 to $85,000, mostly with 1:1 coaching, with some group coaching as well.
I realise that’s a very wide ballpark, but that’s because it depends on the demand for the coach’s niche and the demographic they are targeting.
Another factor is how much a coach is willing to invest in marketing. At the five-year mark, a coach should have a robust marketing strategy and could be earning more towards the higher end of that bracket.
3 – Content creator coaches
The difference between this type of coach and the solopreneur practitioner is that they are skipping the personal coaching part. Although many content creator-type coaches have started out with one-to-one coaching, it’s possible to dive straight in as a content creator and make that your core strategy.
A YouTube channel is probably where the main action will take place, complemented by a podcast. The objective here is to build an audience to sell products. We’re talking online courses, books, memberships, and events.
As a content creator you would need to be in this game for the long haul, showing up consistently with material that is valuable and useful. The investment may be higher over a more extended period of time, but the payoff could be much more significant as you make a name for yourself. After five years you could see your first $100k year, depending on your niche, your expertise and how much you invest.
Enough of the hypothetical. How much are coaches really making?
After gathering evidence and taking clues from real coaches as they built their businesses over the last 12 years, I present three case studies showing three very different coaches.
The income is estimated.
Timeframe: 10 years
Coach type: Content creator
Qualifications: Qualified and highly knowledgeable in their specialist area
Marketing: Monetised YouTube channel with half a million subscribers
Primary offering: Online courses
Website: Basic. Uses a software platform to sell and deliver courses
Estimated income: $120-130k plus an additional $10k from book sales
Estimated running costs: $20k
Timeframe: 8 years (3 of those years were side hustle)
Coach type: Solopreneur practitioner
Qualifications: Numerous coaching qualifications plus degree in psychology
Marketing: PR, appearing in lots of periodicals and on podcasts, plus SEO
Website: Top quality with high amount of organic traffic
Social media: Healthy instagram following with strong brand persona
Primary offering: 1:1 coaching
Also has 1 online course
Estimated annual income: $100-120k
Estimated running costs: $5-8k
Timeframe: 6 years (5 of those years as a side hustle)
Coach type: Solopreneur practitioner
Qualifications: Accredited ICF coach
Marketing: Networking, free workshops, organic social media
Primary offering: 1:1 coaching
No online coaching courses offered
Website: Basic with no organic traffic
Estimated income from coaching: $15-$20k per year
Supplements coaching with other contract work
Estimated running costs: less than $1k per year
Still want to be a life coach?
If you’re not put off by the amount of time it takes to build a coaching business, you’ve passed the first test! But maybe you are put off by the marketing?
As you can see from these three cases, those investing in marketing are the ones really bringing home the bacon. And from the countless coaches I have seen drop out within the first two years, none of them invested in marketing.
And by marketing I don’t mean posting on social media – plenty of them did that without realising that organic social media does not drive business growth.
Unfortunately, most coaches don’t know how to invest their time and money in order to make a success of their business. If you want to know how The Coach Space can help you do that, drop me a line.