Financial coaching is one of the most sought-after segments of the coaching and personal development industry. These experts assist individuals in navigating the maze of personal finance and help them make smarter decisions when it comes to their budgeting, savings, investments, and mortgages.

On top of being an evergreen profession, financial coaching is a highly rewarding career that offers a flexible work schedule and innumerable perks - the income potential is essentially limitless and professional coaches have the freedom to develop and implement their own customized coaching program.

If you feel that you have enough financial know-how to become a financial life coach but are not sure how to start, this article can help. Keep reading as we outline the steps you should take to start your financial coaching business.

The Qualities You Should Have as a Financial Coach

Before delving any deeper into how a financial coaching business is established, we must first discuss some of the essential qualities that every successful financial coach should have. Comparing these traits with your own personal qualities will allow you to decide whether this career path is for you. Here are some of the capabilities you should possess as a financial coach:

  • Great interpersonal skills: As a client-facing professional, you are required to have outstanding interpersonal skills. Effective financial coaching involves a combination of communication, open questioning, active listening, and persuasion skills. If you're lacking in any of these areas, you will have a lot of difficulty conveying your knowledge to your clients and you might struggle to establish yourself as an authority on the topic at hand.
  • Analytical skills: While advanced mathematics is not a prerequisite for financial coaching, you still need to have adequate analytical skills to succeed in this industry. At the very least, you should be adept at creating basic financial projections and interpreting financial documents such as bank statements and mortgage documents.
  • Experience in finance: Naturally, a financial coach should have demonstrable experience working in the financial sector. In fact, having a proven track record in finance will help you establish authority from the inception of your business. Aspiring financial coaches who feel their work experience might not be up to the mark can demonstrate their competence by signing up for a financial coach training program and obtaining an accredited financial counselor certification.

Outline a Plan for Your Financial Coaching Business

Once you have made sure that you have all the necessary qualifications to become a financial coach, it's time to start planning your coaching business. Your initial focus should be on the factors below:

  • Identify your clients: The first thing you need to do is figure out who your clients are. While financial coaching services can be offered to various segments of the population, it's more convenient to target a specific group when you're just starting out. Niching down will allow you to tailor your pitch to a narrow audience and create a coaching program that suits their needs.
  • Decide where you want to work: Due to the flexible nature of the job, financial coaches can decide whether they want to work from home or at an office. Working from home will save you the costs of setting up an office space. Having said that, working at an office makes it easier to set up meetings with clients and helps you appear more professional.
  • Develop a coaching structure: While the content of the coaching program will vary depending on the needs of each client, there should be a consistent structure that organizes how your business operates. As part of your initial workflow planning, specify your daily work schedule, how long you are planning to work with a single client, how frequently you will be having meetings with clients, your pricing, and whether you will be offering online coaching.
  • Identify your software needs: Running a financial coaching business involves handling a wide range of daily tasks. This includes scheduling various types of calls and meetings, keeping track of client progress through a follow-up system, and managing payment and invoices. The good news is that there is a myriad of software solutions to help you streamline and automate most of these tasks. Examples of this include Skynova's invoice template and Calendly's scheduling software.

Getting Started

After you have done all the necessary planning and preparing, it's time to take the first steps toward your financial coaching career. The following section will detail how you should go about starting a financial coaching business.

Open a Business Bank Account and Form a Legal Entity

Before you start promoting your coaching services, you must first pick a business name, form a legal entity, and open a business bank account. This will allow you to keep track of your tax reporting, separate your personal finances from your business finances, and protect your assets from liability.

Your main options when starting a financial coaching practice is to go with a limited liability company (LLC), sole proprietorship, partnership, or corporation. An LLC is the preferred option for most small business owners as it is the simplest legal entity to establish and the one that offers the most asset protection and flexible tax options for businesses of that size.

Unlike many other coaching startups, you don't need a specific license or certification to legally operate a financial coaching business. Still, it is advisable that you look into getting an accredited financial coaching certification as a great selling point for potential clients.

Market Your Financial Coaching Services

As is the case with any new business, marketing plays a pivotal role in acquiring new customers. There are various marketing channels that you can leverage to find your first client within a relatively short span of time.

The first step of your marketing strategy is to build a consistent brand across a multitude of platforms. Launch a website that contains online courses and details pertaining to your financial coaching sessions, create a YouTube channel where you share valuable financial advice with your audience, and use paid ads to promote your business and boost engagement rates on social media platforms like LinkedIn, Facebook, and Instagram. Over time, paid strategies will be complemented by organic ones like word of mouth and referrals.

Podcasts are another untapped source of potential coaching clients that few entrepreneurs seem to prioritize. In fact, this medium provides you with access to a ready-made, targeted audience that is predisposed to engaging with your product. Reaching potential clients through podcasts can be achieved through two methods - you can either sponsor several budding podcasts or directly promote your own business by appearing as a guest on a few of them. Start by compiling a list of podcasts in your niche and inquire about their advertising rates and ask if there are any future openings for a guest.

Get Insurance for Your Business

Every successful financial coaching business should have a comprehensive insurance plan that covers liabilities. There are various types of insurance you should consider for your business. If you're planning on hiring a full-time employee, the first insurance you should look at is workers' compensation insurance. This is a type of business insurance that provides coverage for all employee-related liabilities.

Your business also needs general liability insurance. This is a policy that protects you from claims made against your business by disgruntled clients.

Running Your Financial Coaching Business

Like we mentioned earlier, there are several systems and software solutions that are designed to help you run your financial coaching business in an efficient manner. Here is an overview of some of the systems you need for your business:

  • Invoicing system: Manually handling all of your payment and invoicing tasks can become a tedious chore really fast. This is why you should consider implementing a system that automates invoicing processes for you. Skynova's invoice template is the ideal option for the job. As a business owner, you will be able to generate professional-looking invoices by simply filling out a form.
  • Client reporting software: As part of your job, you are expected to provide your clients with reports that give them an accurate assessment of their finances and help them make better financial decisions in the future. A reporting software will help you organize your clients' financial information and employ it to generate financial plans and reports.
  • Client relationship management (CRM): While a new business might not need a CRM right away, getting one is recommended if you are anticipating future growth. A CRM will help you stay on top of all client interactions and follow up on potential leads in a timely manner.

Grow Your Business With Skynova's Accounting Software

The first few years of your business are integral to its long-term viability. To that end, you likely want to focus all of your time and effort on tasks that help clients attain a level of financial literacy and achieve their financial goals.

Skynova's accounting software assists you in this by taking all financial recording and reporting tasks off your plate and streamlining your accounting processes.