How Much it Costs to Launch and Grow a Coaching Business

This week’s episode focuses on how much it costs to launch and grow a new coaching business or side hustle. From basic legal start-up costs to software to tech, creative services, and much more, Emily Merrell and Lexie Smith share where they personally invested when launching and where they got scrappy, and provide insight on how others can do the same.

Here’s what you’ll learn: 

• How they approached business costs when first starting out - where they got scrappy, and where they invested
• The various investment categories that go into starting a coaching business
• Different software and hidden business fees to keep on your radar
• Places they wish they had and hadn’t spent money on 
• Actual costs for various software and areas needed to run a legal business
• Homework on how you can begin to budget launching a coaching business
• And More! 

Follow Em & Lex on Instagram at @readysetcoachprogram

Learn more about the Ready Set Coach Program at Readysetcoachprogram.com

Learn more about Six Degrees Society and THEPRBAR inc.

Transcript

How Much it Costs to Launch and Grow a Coaching Business - Podcast Transcript

SPEAKERS

Lexie Smith, Emily Merrell

Emily Merrell  

Hi, friend, Ilex how's it going?

Lexie Smith  

It's going good guys. We are recording our very first video podcast. If you're listening to this, you can now also watch this on YouTube.

Emily Merrell  

So you had to put clothes on today's what you're telling me,

Lexie Smith  

I had to put clothes on, I just brushed my hair kind of and I put on a little lip gloss. But seriously, why we're doing this Emily and I like to practice what we preach. And we just got out of a team meeting. And we were brainstorming new ways. We want to market our business in 2023. And I have been getting quite a few sales calls from the PR bar. My other entity if you're new here, from YouTube videos I posted years ago, I mean years. And so we already spend all this time recording this podcast, why not brush your hair once in a while? YouTube?

Emily Merrell  

So Lexie, what were the videos that you posted? Like give examples of what the videos represented? What was the meat of the meat and potatoes of the videos?

Lexie Smith  

There were a lot of how to tips. So how to pitch HARO, how to pitch a gift guide, top pitching do's top pitching don't so really bite sized, searchable videos. I mean, three to five minutes max and to this day. I don't I don't know why I look back at them. And I shudder because they're so bad. But they're bringing me business. So there's something to this YouTube thing.

Emily Merrell  

And how long are they you said like one or two minutes? Three to five, three to five minutes? Three to five minutes. Okay, cool. I love it. So should we do some kind of how tos for Ready Set coach?

Lexie Smith  

We will But one more thing just to reiterate. I just downloaded the PR state of the media report for 2023 and podcasting continues to be at the top trend to watch and video podcasting is really rising. So anyways, just starting out some random facts to justify why I have to get dressed now.

Emily Merrell  

Don't worry, she still has sweatpants on on the bottom.

Lexie Smith  

Definitely do and you should see my socks actually. It's a video podcast. You can see my socks. This is gonna be a real treat everyone. Wait.

Emily Merrell  

Oh, wow. Oh, they're so lucky. What a gift. So for those listening, I'm going to describe them they are pink fluffy socks. And they have a snowman hat on them. So speaking of socks, LAX for Christmas, my mom gave all of us the gift that keeps on giving. She gave us all bombas and I don't know if you own if you own bombas or if you don't own bombas

Lexie Smith  

i Baby bombas remember,

Emily Merrell  

we got baby bombas for Jackson too, but bombas are the best literally my feet feel like they're walking on like little marshmallows and they get excited to put socks on during the day and she got us bomba slippers too. So anyways, brought to you by bought

Lexie Smith  

bombas brought to you by Brahmas bombas are kind of expensive, and it's really relevant to say that because today we're gonna we're going to talk about some of the things that can be expensive and cannot be expensive. If you get scrappy basically Today's episode is how much it costs to launch and grow a coaching business.

Emily Merrell  

And lax I love that. I love that transition. I love that you've just opened a bottle of champagne basically or made the gesture is that what you just did you say bird champagne? No, I

Lexie Smith  

just did Dutch. Oh, I

Emily Merrell  

think we're safe. Do you see where my brains at? I'm like your secret squirrel.

Lexie Smith  

I saw Emily actually savor champagne bottle. That's one of your fun facts.

Emily Merrell  

One of my fun facts very easy to teach. So if you want to learn just DM me, but I was gonna say similar to bombas I think it is like what you mentioned, it's a luxury. It can feel like it's not worth it. There's so many other socks on the marketplace. But when you do make the investment in this luxury bomba of bombas you appreciate it. You really appreciate it. If they go longer. If they last longer, they feel better and they give you the support and the cushion and all the things that you're looking for in a sock that you might not find in your Walmart socks.

Lexie Smith  

See what's out there?

Emily Merrell  

I like it, bringing it back to coaching, we're going to talk about doing it yourself versus outsourcing. And I'm not encouraging you to make your own socks here, people. That's that's not the lesson today.

Lexie Smith  

Not the lesson today. But if that's what you take away, that's what you take away more power to you. Yeah. So look, when you are starting a coaching business or a side hustle, there are going to be a lot of things on the table that can require cost. And we're going to talk through the first investments that we made individually and also reflect back on some things that maybe we wish we hadn't done or had done. And alternatives if you don't want to invest how you can get scrappy. So Emily, do you want to kick us off? What was the first thing that you invested in your business?

Emily Merrell  

The first thing that I invested in was a lawyer. It was and I was scrappy with this lawyer, I knew I was leaving my corporate job. And I asked everyone that I worked with if they had a lawyer recommendation, and this woman who was so wonderful, her husband, she volunteered her husband up as tribute to get me filed and to get me registered. And he did it for a very nominal he didn't he waived his fee. And he just charged me the registration fee, which I thought was really, really gracious, and it was very appreciative, especially being 20, something year old to, at that time, didn't have that much money to my name.

Lexie Smith  

That's wonderful. I too, started with the lawyer, but I paid the lawyer in full because I just didn't have that option. And so you guys know, yes, you can pay a lawyer. But you're also going to have additional costs and some are registration fees of setting up a business. For example, are you going to be an LLC, or a S corp, or a sole proprietorship? So that's one, there's also going to be registration fees, depending on where you're where you live? So no, I mean, it really depends. For example, I live in the city of Ventura. So there's a California fee, but there's also I have a city business tax license fee annually. So So when you're thinking about investment costs, there's the lawyer, there's all the setting up of your business, there's also costs if you want to invest in getting approved contracts.

Emily Merrell  

Yeah. And I think it's, it's great that you mentioned that because I set up my my business, initially in New York City. And in New York, there was this law for an LLC that you had to be published in a publication. And so he got me published in like the cheapest publication you cut, I think somewhere in like Long Island or whatnot. And so it each state has its own nuances to it. So being able to work with a professional is much easier than going to What Is It Legal Zoom, or, or whatnot and doing it on your own, there's a lot of mistakes that are to be made. To piggyback on what you said, the second thing that I did was hire a different type of lawyer who was focused on creating terms and conditions for my website, who was who is, uh, who created all these agreement forms for me. And I really liked the way that he did his law, because again, I didn't have much money, I'm just starting out here, I don't have all my I'm not able to put all my eggs in the legal basket at this point. And he charged a subscription model. So he charged $99 a month for a year, and you could get three different documents created. So rather than paying like a bulk price right up front, for me at that time, that was more digestible than paying 1000s of dollars or hundreds of dollars at a at a given

Lexie Smith  

point. I think, though, to to kind of close up the lawyer funds, Emily and I would say this is one area we suggest not DIY, and has its flaws. So there are times you can be scrappy in times to not be scrappy. And you know, when it comes to all things legal, we suggest getting it right. So that's one cost to prepare for. What's another one?

Emily Merrell  

Tech. And, again, I want I want to just go back to the beginning, a lot of times people start a business and they think there's this misconception that the business just happens out of thin air. But really there is tech involved. And one one of the big recognized realizations I had was I never used my personal computer after leaving corporate, if I hadn't really a desktop, my personal computer and see if it was up to snuff to actually support what I wanted to do. Ultimately, I ended up a year into my business getting a new computer. And I've actually had two computers since I started my business. So just if you're a Mac user, they're not cheap, unfortunately. But they are a good investment, especially if you're a Mac user or an Apple user, everything talks with one another. So I think that computer is one of the biggest tech expenses that you have to factor in and you have to you have To

Lexie Smith  

account for, and as you grow, you can get more fancy things like right I have, at this point, a ring light, two additional monitors and like a nice camera. I did not have all this when I first started, I just had my laptop. So minimally, you will need some sort of computer. Additional tech is optional.

Emily Merrell  

Yeah. And I think that's a great thing to point out lacks, like we're both talking on microphones right now. They're not super expensive, but they're not a must have and a right now thing unless you are on Youtube, or you're podcasting right out of the gate, but most likely you're not so save your pennies for to buy that at a later date.

Lexie Smith  

Yep. Okay, so the next thing or category expense to think about is accounting and bookkeeping. And how did you go about this category when you started?

Emily Merrell  

So I asked my friends who were entrepreneurs, what they were using, and they all suggested I did QuickBooks. So I signed up for QuickBooks Online, which I think at the time I started was like, 1099 a month or 1299 a month, it was nominal. And here's where I screwed up, guys. I did it all myself. And I still get my spreadsheets. But with QuickBooks, I wasn't as proficient in QuickBooks. So if you are going to do it yourself, and you are going to use a sophisticated system like QuickBooks, I advise you take a class or you learn from a professional on how to do it. Or when the time comes that you have enough invoices coming in or enough recurring revenue, hire a bookkeeper. And when I hired a bookkeeper, I was probably a year or two into my business, and it was about $50 a month. And she saved me so much energy and so much time that I've just made a mess out of the situation. But I just want to caveat, in addition to using QuickBooks, in addition to getting beautiful reports given to me monthly, I still love monitoring my expenses, the old fashioned way, by using spreadsheets and by categorizing like tech or networking or entertainment. So I know oh my god, I spent how much money on coffee dates this month. That's bonkers. And just happiness, a checks and balance that QuickBooks. And that bookkeeper doesn't really permit you. What do you think Lex?

Lexie Smith  

Yeah, I think that's great. I did open a business bank account. So there was, yeah, to like, have $100. I don't remember what it was, I think.

Emily Merrell  

Yeah, 1500, or something like that.

Lexie Smith  

I don't remember. Well, that was for ours. Anyways, I digress. So I did open a business bank card when you big bullet through book, everyone got to see that fun face on YouTube. If not, again, go look at YouTube, I opened a business bank account. So if we tack that on to that category, I then started by DIY spreadsheets with just excel. And the reason I did this is I feel like I got really good advice from a former CEO of mine, that one of the keys to having a successful business is to really know your numbers. And so I did not outsource accounting and bookkeeping right away, even though it would have been really easy because I wanted to force myself to understand and learn all the different nuances that went into my business from a numbers standpoint. So this was an area I did get scrappy. I think like six months in I got my first software which I chose Fresh Books at the time, I've now switched to QuickBooks. And then by year two and a half of my business I when I felt like I really did understand my accounting my numbers, then I finally on boarded the bookkeeper we both use now for any site coach and the PR bar Shut up to view bookkeeping. So and we pay roughly about 150 a month for her services that she has different tiers, but just just to give you guys some actual numbers to think about so I started scrappy, to learn my numbers. I then got the software Fresh Books, I believe was about 25 a month at the time. I think for QuickBooks, we're paying 55 I don't that might be

Emily Merrell  

I think it's a little bit I think a little less than that. I think we're paying like 45

Lexie Smith  

Well you can look online go whatever software you're looking at, you can go look online, there's different levels depending on how intricate or what you know, level of the software you sign up for which speaking of the next category, software's Hey, Lex Yos

Emily Merrell  

Did you know that we're starting our fourth cohort I've already set coach in February.

Lexie Smith  

Obviously I knew that Emily, but if you didn't know that you can head online to learn more at ReadySet. Coach program.com The link is in our show notes.

Emily Merrell  

And I think software's are, are fascinating because a lot of them hook you with premiums and we're also Not in the generation of buying, buying your windows package and like buying it once and you're good. And you're set everything is is a SaaS based system for the most part, which means either you pay like a one time annual fee, or you pay a monthly fee. There's, I mean, correct me if I'm wrong, Lex, I can't really think of anything that you straight out pay one price for it and you own it now.

Lexie Smith  

You write me, but I can't think of it me. Yeah,

Emily Merrell  

it really can't, everything is kind of turned into this freemium SAS base model. So first and foremost, you don't have to spend much money on softwares. But as your business gets more sophisticated, as you get more sophisticated, as you have more offerings, you're going to want to pay that extra money to make your life easier. And so one of my favorite things that I hacked for a very long time was Calendly. Calendly is a free tool to schedule phone calls or Zoom meetings with people. And it is they have a free account where you can make one free appointment and it can be 30 minutes, it can be an hour, but it's free. But if you want to have another call, if you want to create a podcast link, or if you want to create a 15 minute link, that's going to be more money. And then they have different tiers of sorts of how you can pay. So that is one tool that I pay for. And I very, very, very, very gladly hand over my $144 a year to pay for Calendly, because the time spent of scheduling meetings is less is very valuable for me. And I'd rather spend that time bringing in money versus scheduling a meeting with someone.

Lexie Smith  

And we have a whole episode guys on software and systems for coaches. So we won't dive too much into all of them right now. But we want you to know that this is a category of expense. And you can start most software's semi free and tennis point as you get more income, you can decide to invest a little further or go a little more premium. Again, Zoom has a free version, then there's a paid version, you can try free trials as well. So this just really has to be something that you choose whether you invest in or you get a little bit more scrappy with. But I'm going to point into that other episode too, to learn more specifics.

Emily Merrell  

Lex, what is another thing? What's another software that you right out of the gate invested in

Lexie Smith  

software, I you know, a software I invested in was pipe drive, I coming from a larger company was really used to having a CRM system. And I thought I needed one as a small business. And so this actually was an expense that I paid for and didn't really use. So that was an investment mistake I made. What about you?

Emily Merrell  

Oh my gosh, not that right out of the gate. But Salesforce, I bought Salesforce a few years ago, and you know, is a good discount price and whatnot. And I ended up trying to use it maybe like three times and just failing miserably. And when the renewal came up, I was like, Goodbye, thank you so much. But no, I do not need this anymore, and chose a free CRM tool that better suited my

Lexie Smith  

needs. Which again, shout out to that episode for more. Okay, another category is an website, and everything that comes with a website. So a website, you're gonna have to pay for a domain name, that's the URL. So Ready Set Coach program.com. For example, you can either purchase that domain name from a third party site like GoDaddy, or depending on the website hosting platform you choose, it might be included, but that website hosting platform likely will also have a fee. So for example, we do Squarespace for Ready Set Coach, I know Emily and I both do WordPress for other businesses. But for already set coach we do Squarespace we pay monthly for that we have a domain name domain names are really, really affordable unless you go after something really, really common. Do go to godaddy.com, type in the URL you want. And you'll you'll see some costs, it can go anywhere from $1 for your first year up to 5000 if you want like the most coveted URL of all time. And then the other thing to not forget about is your email again. What I mean by that is we have Hello at ReadySet. Coach program.com as opposed to Ready Set Coach program@gmail.com. This is another category where you can choose to get scrappy or not Emily and I would say that it really does look a hell of a lot more credible to have that official Gmail. So this would be an area we would invest in,

Emily Merrell  

and what she means by official Gmail, meaning like hello at ReadySet coach.com. So eliminating the Gmail, but fun fact your Gmail or your account, your email is hosted through G Suite. So that's an opportunity to it's usually about $6 a month and the more emails that you add on, the more money it is. And then also, the one fun thing that they're really good at doing is getting you for storage. I don't know about you lacs, but that is a fee that I found out about. With time. I've, gosh, I don't even know how many emails I've sent in my life, but probably in the like, high multiple 1000s of emails, but emails and Google Docs and videos, and these podcasts are all hosted and stored in my Google Drive. And so because of that, that costs money, and that cost time. So I pay about, I think I pay 199 a month for extra storage, which, again, period 99 Yes, on period $1.99 for storage, but then it does, it is a nominal thing. And similarly, for my team to when I added I added an official email for them. But when they're gone, I get rid of that email because I want that six bucks back. Yeah. Okay,

Lexie Smith  

so software's websites, tech, lawyers, accounting, what is another category we want to have on your guys's radar, basic creative and branding support, this is very much a category you can invest in or get scrap in based on your skill set. I fully did my website my brand new because that's something I feel confident in. But if you cannot, you don't have a creative bone in your body, this might be an area to invest in.

Emily Merrell  

Yeah, and I'm with you. Lakhs I think at the beginning, at the beginning, you're kind of you're playing, you're testing things, you're still in the testing the waters testing, you want to if you want to actually do this. So before you hop over $5,000, to a branding strategist like this might be an opportunity for you to really get to understand what you want to be, and who, who you want to be talking to and the colors you want. So I don't think that's something that you need to do straight out of the gate. I had my roommate who was a, I mean, again, luckily tapping the network for resources, but I had my roommate, design my logo for me, I told her I wanted it to feel like a warm hug. And then Lexi designed our logo for Ready Set coach using Canva. She did a beautiful job there. So there's great resources and tools out there. You can also if you do want to outsource it, check out things like 90, what is it 99 designs?

Lexie Smith  

And maybe I know

Emily Merrell  

fiber is Fiverr, Fiverr, Upwork, things like that. And you can have like someone do a one off thing for you. I think it's 99 designs. I don't know if maybe I'm just getting the balloon song stuck in my head?

Lexie Smith  

I don't know, I don't know that one. But this is a category you're going to hear very split advice on. And all I will say is I think there's incredible value in in branding. But we have certainly seen coaches without exquisite branding have success. So you know, choose choose however you want.

Emily Merrell  

Yeah, and I think another thing too, that goes hand in hand with with with brand is the faces the real faces behind it all is photography. And first off guys, your iPhone, which I'm assuming if you have an iPhone or a Samsung or whatever, take incredible photos. So don't neglect those photos as photos that you can't be using because you can totally be using those. So Lex What did you do for photographers to do hire and do a brand photo shoot right out of the gate.

Lexie Smith  

I had a friend who was a photographer who I did a brand photoshoot with because I do think you need some set of photos that are professional now if you can, you can get a professional looking photo from your iPhone. So this isn't saying go hire a 10k brand photographer. You can get scrappy here, but it's definitely a category that is important. What about you?

Emily Merrell  

I did a trade with someone I think I did introductions and I was really good at finding photographers who are just starting out which over time, I also realized the type of photography that I liked, what I like to invest in what I'd like to spend money on versus what I thought was kind of not not so great. And my eye became more discerning so with time and experience I was able to assess when it was the right moment for me to invest in photography, but right out of the gate, I was definitely able to be scrappy with it.

Lexie Smith  

Two more categories. You want to take them we'll wrap up and give you guys some homework. First is marketing spend and when we say marketing spend, we're talking about spend to join online communities like six degrees society spend to attend paid networking events, the spend needed to take a potential client on a coffee date, for example, that is a category to have on your radar.

Emily Merrell  

Yeah, and I'd also add to that that if you are someone that you know, for a fact, you're not going to be able to work out of your out of your apartment or your home, maybe you'll want to make a category for a co working space. So that could be a space like we work or a female focused one. But it's a place where you're able to surround yourself with like minded individuals and continue finding that accountability and motivation moving forward. Not everyone needs it, I definitely was a jumper, my first year where I would sign up for the free month trial at pretty much every space that was available. And it was great because I was able to make a lot of friends and make a lot of acquaintances. And also try out a lot of spaces. But it also didn't give me the consistency that a lot of people desire.

Lexie Smith  

And the last category is actually the third expense I invested when launching my coaching business. So number one was a lawyer. Number two was some tech. I did a lot of hacksaw system. So I guess that can be tied with three. But actually one of the first investments I made was a coach. And I felt like putting my money here because I knew that hiring a coach would help me fast track where I wanted to go. But what about

Emily Merrell  

you, same that was I truly quit my job was giving my notice still sat next to a coach at dinner. And here's the caveat of investing in her she was I didn't realize this at the time, but she was relatively new coach. So out of the gate, we were able to do a trade. And so I was kind of her beta client. And it was great. It was so helpful for me. But I was also able to save a lot of money while also getting the accountability I needed. So while I'm very pro hiring a more further along, coach, if you really want to be scrappy, and do want that accountability, there is a lot of people doing beta clients that you can always test them out for, you know, a few sessions before they start charging.

Lexie Smith  

Yeah. And so here's kind of the big question that we want to wrap this up with what comes first the chicken or the egg, you know, you might have heard you have to spend money to make money. And there's truth to that. But there's also the ability to get flexible and creative with how and where you spend. So some homework we have for you is to first sit down and figure out general budget, you feel like you have zero money, then then really challenge yourself. Can you open a new credit card? Can you go for a business loan? Can you apply for a grant, there are ways that you can get creative, this is something you really, really want it could also be setting aside $100 from your paycheck a month, right for a core set amount of time. So of that budget, we want you to then go through all the categories we just listed, and start to really prioritize where you're going to put your investment when you're first starting out.

Emily Merrell  

Yeah, I think that's wonderful, wonderful homework, Lex. And I also want to add one more revenue stream to or a way to get money is I fund women is another great platform that does like a crowdfunding for women and, or Kickstarter or whatnot, depending on the product. But I think being able to ask for money. It's not that's not a crime. Like I definitely encourage you to think creatively about where that money comes

Lexie Smith  

from. Yep, I love it. Well, guys, this this is wrapping up our very first video podcast for the ReadySet coach podcast. Until next time,

Emily Merrell  

we'll see you later. Bye bye. If you're enjoying the ReadySet coach podcast, please leave a review wherever you are listening. For more information about ReadySet coach, visit ReadySet coach program.com