In Part One of this blog, “A Marketing Budget to Start, Grow, and Maintain your Coaching Business,” we identified the primary obstacle preventing Coaches and Consultants from achieving the success they really want.

In this post, we will share practical advice for

Establishing a Marketing Budget for a Coaching Practice

When it comes to budgeting for success in your coaching practice, consider these numbers from the Small Business Administration:

For an established business, the SBA recommends budgeting 10% of gross annual revenue for marketing. To ‘ramp up,’ the budget jumps to 20–30%. It’s important to note that some new businesses will invest 100% or more of their initial revenue goal to launch their new venture.

These numbers are real. They are based on data that has been collected and analyzed for decades. You may still think you’re different, and this information doesn’t apply to you. That kind of thinking is sure to slow your progress or land you in the poor house. Instead, stand on the shoulders of the giants who came before you and left this invaluable data for you to utilize. (Source: Entrepreneur.com)

Calculating Your Budget

Let’s take a moment now to create a ‘quick and dirty’ budget for your coaching practice.  I’m referring to your revenue goal vs the amount you will need to invest in order to achieve that goal. In this case, it’s important to put the horse in front of the cart. Most coaches get this all wrong and think they need to ‘put the cart before the horse.’

The common refrain:

Once I make some money… once I get my first few clients, THEN, I’ll invest in marketing.

Can you see how backward this thinking is? When does an investor ever say, “Give me my returns, and then I’ll invest my money.”? Never! It’s like the old story between the wood and the stove. The man is cold, so he says to the wood stove, “Give me some heat.” The stove says, “Okay. Give me wood, and I’ll give you the heat.”

Can you see how this would apply to your business? You have to first invest to get the word out about your business in order to attract prospects and get clients–not only to sustain but to grow.

Here are some ‘rules of thumb’ for budgeting. (Let’s assume you’re looking to make *$200,000 in revenue):

• STARTUP / LAUNCH a New Practice:
  • Budget 30%+ = $ 60,000 minimum ($5,000/month)
• RAMP UP Business:
  • add $200,000 to whatever you’re generating now
  • Budget 20 – 30% = $40 to $60,000 ($3,000 – $5,000/month)
• MAINTAIN Your Current Revenue (assume $200K/yr)*
  • Budget 10% = $20,000 (~ $1,700/month)

Note: You can’t cheat! I’ve had many with low or no revenue say they’ll just start with a maintenance budget. But it doesn’t work that way. You can’t maintain what you don’t have. You need to build it first.

Three Solutions for Growing a Successful Coaching Practice

1. Stop pretending that the rules of business and the rules of success don’t apply to you.
2. Take inventory of what you do know about planning, launching, and running a successful coaching business.
3. Admit what you don’t know and seek out the best advice you can to fill in the gaps.