April 12, 2022
When I first started my coaching practice about 10 years ago, I made a simple mistake that ended up costing me around £2,000 every month. Basically, I was just too nice. Now that I'm a more experienced coach, I don't want new coaches to make the same errors I did. Back then, I was a bit naive. When clients signed up for a coaching program, I just assumed they'd stick with it for the full duration, whether that was three or six months, to get the results we aimed for.
But at the end of each month, after putting in a lot of hard work, I'd look at my cash flow forecast and wonder where the money was. It just wasn't adding up to what I'd estimated. This wasn't just one issue; it was a mix of things. The biggest one? I didn't have any legal contracts for clients to sign. You'd think a business coach would do this first, right? Now, I tell all my clients to do it. But when I switched from web design to coaching, I just figured people would pay what we agreed.
That didn't always happen. Sometimes clients would have a good month and decide they didn't need my help anymore. Other times, a bad month would lead them to the same conclusion. When I looked at how long clients actually stayed, it averaged out to about 4.2 months of a six-month program. If a client said, "Rob, I think I've got what I need," I'd just say, "No problem," cancel their direct debit, and they'd leave.
I realised I was losing money. Over that first year, I reckon I lost close to £24,000 just by letting clients end their contracts early. So, I created a simple coaching agreement. It's changed over the years, but now, when a client agrees to work with me, I send them the agreement to sign before we start. It's rare for clients to leave early now. It's not just about a legally binding document, though that's part of it. I've had to enforce the contract a few times, but not often. It's more about clients making a commitment to themselves.
When clients sign a contract, they're essentially signing up for a program, not just a few sessions. They agree to the payment terms, treating their coaching as a package designed to achieve a specific outcome. This usually means sticking with it for the full duration, as that's often how long it takes to see real results.
During the sales process, it's important to train your clients. They're buying a whole coaching experience, not just one-off sessions. This includes wraparound support, accountability, access to courses, or other benefits included in the package. It's a complete support system for a set period – three, six, or twelve months, depending on your program.
One common mistake is dividing the total program cost equally over the months. For example, a £3,000 program over six months might be billed as £500 per month. This trains clients to think of it like a monthly subscription, like Netflix. Instead, consider payment installment plans with a larger upfront payment. For a £3,000 package, you could ask for £1,500 upfront and then five monthly payments of £300. This anchors them into a payment amount.
If you want clients to commit to a higher monthly rate later on, you might need to adjust your overall price. For instance, if you want them to pay £500 a month from month seven onwards, you could price the initial six-month program at £3,600, with £1,100 upfront and five installments of £500. This way, they're already used to paying £500 a month. If you have 20 clients paying £500 a month after their initial program, you're looking at a six-figure business earning £10,000 a month.
This is a business, and while I don't think clients took advantage of me intentionally, I was naive to believe they'd keep paying without a contract. Even an email confirmation of fees can serve as a basic contract. Having a written agreement does two things: clients tend to be more committed because they've signed it, and it clarifies your position.
You also need to be prepared to chase payments. Set up direct debits or payment systems to ensure money comes in on time. If a client falls behind, you need to decide whether to pursue the balance or let them go. Sometimes, it's best to part ways, especially if the coaching isn't working for the client or if they aren't following the process.
There are some people who move from coach to coach, taking what they can and not paying. It's rare, but it happens. As a coach, it's your responsibility to protect yourself with contracts, deliver value, chase payments, and manage the agreement. This stops you from losing money, especially when you know you've done a great job for the client.
I've had clients try to get out of payment plans, sometimes claiming financial hardship while showing off expensive holidays or new cars. It makes you question their priorities. My belief is that if you agree to pay for something, you see it through. Since not everyone shares this view, these protections are necessary. I don't like seeing coaches lose money or not earn what they deserve for their hard work. If this sounds like you, let's talk. I'm happy to share a template of the coaching agreement I use, which many of my clients, who are often coaches themselves, also use.
A coaching contract is vital because it protects your income by ensuring clients commit to the full length of a programme. It formalises the relationship, sets clear expectations, and helps the client mentally commit to achieving the results you've agreed upon.
Instead of dividing the total cost equally, consider charging a larger upfront payment followed by smaller monthly instalments. This approach secures more commitment from your client at the beginning and makes the arrangement feel less like a cancellable monthly subscription.
With a signed agreement in place, you have a legal basis to pursue the outstanding balance. You need to decide whether to chase the payment or part ways. Having automated payment systems like direct debits can help minimise this issue from the start.
When a client signs a contract, they are no longer just buying your time; they are investing in a complete support system designed to achieve a specific outcome. This simple act shifts their perspective from short-term sessions to a long-term transformation, which is exactly what effective coaching, like that offered by Robin Waite, aims to provide.
