Ep #29: 4 Simple Money Rules for a Profitable Coaching Business

Hey coach. If you have ever felt a little unclear about what it means to be profitable in your coaching business, you are definitely not alone. No one in the coaching industry talks about profit. Everyone talks about revenue or sales but not profit. As a consequence, profit is often misunderstood. But if you don't understand it, then you're likely going to end up focusing on the wrong money metric.

I'm Kendall. Tune in because in today's episode, I'm going to share with you why being profitable as a coach does not happen by accident, my beautiful soul. It happens by decision. I'm going to clarify for you three key money terms because money loves clarity. I'm going to share with you four simple but profoundly powerful money rules, yes rules, that will give you all of that yummy, sexy, juicy profitability that you want from your coaching business. It's all here for you in this episode of The Money Coach School Podcast. Let's dive in.

Welcome to The Money Coach School Podcast. To really excel at coaching women, you have to be skilled, confident, and even fearless at money coaching. If you're passionate about women holding genuine money power and love supporting women entrepreneurs, then this is the show for you. Now, here's your host, money feminist Kendall SummerHawk.

Hello, beautiful coach. Today has been such a great day. I'm recording this podcast for you. So automatically, that makes it a great day. I had a beautiful time exercising my horses this morning after we had gotten a ton of rain the past two days. I live in the desert. So a lot of rain is a lot of rain for us because the desert doesn't know how to absorb it all. So no riding because my arena is still too wet, but really lovely ground work that I did with my horses, which is so fun.

I love ground work with my horses because it's a chance for me to see them moving and to create a different kind of bond with them than riding and to train them on noticing really small signals using just my hands or even just my fingers as cues, which is so fun because it's really subtle yet super clear to them.

Now, I will be honest with you. I usually try and hold back from talking about my horses here in the podcast because, let's be honest, I can get really geeky really fast. So today though, I thought it would be fun to share just a few facts because I know a lot of you are really curious. So I have three horses. They're all Spanish Andalusians, what are called PREs. They are all originally from Spain. Their names are Rio, Urobi, and Descarado, but we call him Sugar for short.

They're all boys. Rio and Sugar are geldings, and Urobi is a stallion. So Rio is retired now after giving me 20 years of amazing rides. So I ride Sugar and Urobi. I ride dressage. I do lots of groundwork with each of them. I take riding or groundwork lessons typically five days a week. I'm with two different trainers. I totally obsess about it. I love it so much. I spend hours every day with my boys, which is easy to do because they live just 20 feet out my back door where I get to look at them all day long out of the big picture window of my office.

So that's a little bit about me and my horse life. It's a lifestyle that I had only dreamed about before. It did not happen overnight, but it did happen. It happened because that was my vision. It happened on a practical basis because of giving my energy and attention to exactly what I'm bringing to you here in today's podcast, which is talking about being profitable inside of your coaching business.

Being profitable as a coach and particularly as a business coach for women entrepreneurs because, of course, I think that's the best niche on the planet, it does not happen by accident. It happens by decision. The decision that you're going to make a profit with every client. The decision that you're going to stay above a certain profit percentage. The decision that you're going to receive more money than you, quote unquote, need.

So I took a stand for my profitability very early on in my coaching business, way before I was really making any money. So before I had much money at all coming in. Today I'm here to show you how you can take a stand for your profitability.

So first today, we're going to get really clear about three simple money phrases, money terms, so that you're clear about money because money loves clarity. Then I'm going to walk you through four simple money rules. Yes, I'm saying money rules. So my mavericks here, don't rebel. Stay with me here for a moment. Okay, this is going to be good for you. You're going to love it, I promise.

All right, so four simple money rules designed to make you profitable in your coaching business, starting with your very first or your next client. I'm going to show you how to set a minimum profit goal for every coaching offer you provide, so that there's no wiggle room or ambiguity in your relationship with money. I've got a few more things to share with you here as well today. So you ready? Let's dive in.

So no one in the coaching industry talks about profit. I don't get it. Actually, I do get it. They don't want to reveal how little money they're actually keeping for themselves. But I'm not one of those people. I love to keep a lot of money for myself and my family and my horses from my business.

So everyone talks about revenue or sales, but they're not talking about profit. I think profit is misunderstood. But if you don't understand it then you are so likely to end up focusing on the wrong money metric, really a vanity metric. That is the metric of sales or even revenue, and I'll talk about that in just a moment. Instead of really focusing on what matters, which is profit.

So today's about how you want to think about your money coming in. I know some of you may be saying oh, Kendall, it's too early. I don't have paying clients from the coaching side of my business yet. Or I only have a small number of paying clients. But my beautiful coach, I'm here to tell you it is not too early.

The reason why is because how money comes in for you will always fall in line with the rules that you set about money. You don't wait to have money coming in to decide what that looks like. You decide first and then money comes in. Money loves clarity. I've been saying this for decades. You can have that clarity now. You want it now. Absolutely.

So I did not wait until money was coming in consistently to make these rules. I made the rules and then money started showing up. It started coming in in alignment with these rules. All right, so first, let's get clear on just three simple terms so that you're clear about your money because money loves clarity. So let's bring it on. Right.

So first money term is sales. Sales is how much you've sold. This is not money in the door. It's not cash. It's sales. Sales is the commitment someone has made to coach with you in one of your coaching offers. The second money term is revenue. So revenue is how much money or cash comes in. Revenue is cash. Revenue is before any expenses. It's often called top line revenue because of that. So for example, if you sell a $10,000 coaching package, and your expenses are $2,000, your top line revenue is the 10,000 because it's before the expenses.

But here's the thing about top line revenue, it's often a vanity metric. So, for example, you can have a million dollars in top line revenue. I know lots and lots and lots of coaches who have seven figure businesses. I have a seven figure business, but yet they may only have 100,000 in profit. That sucks. That's not my business. But that's real for a lot of women in business because they're falling prey of what they see other people reporting as their numbers.

You have no idea what the numbers are that other people are reporting on what they actually mean. It could be sales, which has nothing to do with revenue. It could be revenue, which does not account for expenses or taxes. So don't get caught up in what others are reporting and then use that against yourself. You pay attention to you and then you're going to feel so good. You're going to make money, and you're going to be in control of your coaching business.

The third money term is profits. We have sales, revenue, and profit. Profit is the amount of money you have after expenses. Now people always ask me about taxes. So to be clear, I define profit as after expenses are paid out but before paying taxes, okay. So you have your revenue that comes in. You have expenses that get paid out, and you're left with a pot of money, and that is your profit. Its profit before taxes. Out of that pool of profit, your taxes will be paid out of that.

All right, so those are the three very simple, very simple money terms so that you are clear. Now let's talk about the money rules. I love money rules. I love saying that because rather than making me feel constricted or contracted or hemmed in in any way, my ruler, I am a ruler archetype and my sacred money archetypes. I love it because like oh, money rules. Yeah, like I get to be the queen of my money, and you get to be in charge of the rules. The rules work for you. Rules don't constrain you. Rules free you.

So money rule number one, be profitable with every client. This is not math. This is a decision that you make. It's not something you say well, I don't know, or it depends. You make the decision to be profitable with every client period. Then you do the simple math to know what your expenses are per client. It's very, very simple.

I always say that I made nearly $30 million just since 2008 actually. I made more when you include the years prior to that. I've done that, basically, without spreadsheets. I used to use a calculator now I use the calculator on my phone, and my mechanical pencil. That's it. I'm using second grade math skills, sometimes third grade math skills to make almost $30 million. I know how to keep it simple.

So be profitable with every client, which flows right into money rule number two, set a minimum profit goal for every offer. What this means is that no matter what you're offering, private coaching, group coaching, one on one intensives, what I call VIP days. It doesn't matter. You make sure that you honor not going below your minimum profit goal.

So I keep it really simple. I keep my minimum profit goal the same no matter what the offer is. So in other words, it's company wide. So I'm not saying well private coaching, my minimum profit goal is 90%. On groups it’s 75%. It's just too complicated. It gives too much wiggle room. It's too many things for you to juggle in your brain. Don't do that. Let's keep it simple.

When you keep it the same, across all offers, everything is simple. money in your business should be simple. So sure, some offers will be more profitable than others. That's fine. But none will be less than your minimum profit goal. Sweet, right?

So for example, if your minimum is, let's say, 70% profit, then you have so many things going for you so that you can be successful in your coaching business. 70%, it's amazing. By the way, totally doable. Having a minimum percentage profit on every offer means number one, it keeps your entire business profitable no matter what. Think about that. If it's the same across the board, it's never going to dip below that. That means you know with every offer, with every client, you're going to be making a certain amount of money.

Number two, it keeps you from putting time and energy into low end offers that don't make sense, especially for the first several, several years inside of your business. There were so many times early on once I made this money rule where I have this idea to launch something. I thought oh, I'm going to do this product or this training. It’s going to be great. I would work it out how much it was going to cost me in my time and expenses to produce it.

I went wait a second. I'm going to have to sell hundreds and hundreds of copies of this or have hundreds of students come into it or clients in order to even make any money. My expenses are not meeting my minimum profit percentage. So I said no to them. I focused on other things. That was a really, really smart decision.

So number three, having a minimum profit goal for every offer, it elevates you as the CEO of your business, making decisions like the coach boss that you are. Number four keeps you honest with your business. You're not playing games, and you're not overspending on services. So it really helps you stay in that CEO mindset and make decisions like a boss.

Number five, it makes it easier to make decisions about what to offer and what you can skip, like what I was talking about a few minutes ago. Number six, it gives you security and confidence in what you're doing. It's like wow, these choices are being made for me. I'm following my own money rules. They're going to work for me. How easy is that? It gives you that security and comfort because every client and every offer is going to be of a certain percentage value to you from a monetary standpoint.

So here's an example of what this could look like in the first several years of your coaching business. You can easily set your minimum profit goal of 70%, 75, 80%. Like in that range is awesome to do. Because you don't need full time team. You're not doing expensive Facebook ads. You're likely not paying out sales commissions. You just don't have all of those expenses.

I will tell you that by setting a profit goal of 70, 75, 80. Actually, in the early years of my business, it was 80%. For a little while I had 85% and then I changed it to 80% profit. Like I just didn't go below that. I'll tell you that it helps you so much in evaluating the things that you are going to spend money on because you're thinking is this going to cause me to drop below my minimum profit goal? So you get very discerning in the vendors you work, with the suppliers, the different contractors. It really will help you make better decisions for your business, both in the short term and in the long run.

So you can easily have a $500,000 year coaching business with 70% or more profit before paying yourself and before taxes. Let's think about that. That's somewhere around $350, $400,000 in profit. While today I was not planning on talking about high ticket, I just have to mention it here for a moment. Because I know you're probably thinking okay, great Kendall. So how can I create this kind of profit?

Well, here's your how. I am a huge believer in the high ticket business model, which is what we teach inside of certification. So I've been a huge proponent of high ticket since almost 20 years. I mean, really back to 2005, 2006. So high ticket means that you're not giving away coaching for free. You're not doing a bunch of low ticket offers. You're not charging by the hour, by the month. High ticket is how you become a higher earning coach. High ticket is a must if you're going to be coaching women entrepreneurs.

It's totally doable because I so recommend having a framework, a series of steps that you coach clients through to get results. This goes hand in glove with high ticket. This is the foundation of all of my certification trainings where you get trained in my frameworks that you can brand and deliver as your own.

This is what massively frees your time, keeps you focused on the joy of coaching because let's face it, coaches, we love coaching. We didn't get into our coaching business to market, we even though we have to market. We're in a coaching business because we love coaching. We love being in relationship with clients in that way. This is what gets you results for your clients.

So I'm going to link to my primary certifications in the show notes so you can check those out. Just to come back full circle, how I've made nearly $30 million in my coaching business and have these beautiful horses that I spend so much time with is by using the very same coaching frameworks that I train and certify you in in my certifications.

Okay, money rule number three, have a place for the money to go. By having a place, I literally mean having a bank account. I know this sounds really basic, but if you're not clear what bank account you want the money to flow into, it will not flow. If you're feeling uncertain about where the money is going to land for any and all kinds of reasons, trust me, I've coached thousands and thousands of women on money, and they have all kinds of reasons why they feel uncertain about money landing in certain places. So whatever that reason is, then the money won't land.

So know what bank account it's going to go into. Have that account set up with your credit card processor and also through PayPal if you choose to take PayPal, which I recommend that you do.

All right, money rule number four, emotionally embrace overflow. Overflow is when you have more than enough money than you, quote unquote, need. So the first two money rules would be profitable with every client and setting a minimum profit goal for every offer. They set you up beautifully for this. But if you're not emotionally ready to embrace overflow where if you're not believing overflow can happen for you, then you're going to shut off that money flow.

Now may sound strange, but most women really need to focus and put into practice emotionally embracing overflow. The reason why is because so many women live from a place of just enough. I've seen this at all different revenue levels. I've seen it at revenue levels of $2,000 a month, $20,000 a month. I've seen it revenue levels of $800,000 a year, million dollar year. I have seen it all where women are making lots and lots of money, and they never have any money.

All right, so emotionally embracing overflow. What it is, is the integration of practical money rules, just like the ones I'm giving you here today. Practical money habits that I teach in my money mentoring program, and the emotional work that all women need to do, especially in the coaching space.

Because let's face it, the coaching space is one of these rare little corners of the world where it is so very possible for women to make much, much more money than most women ever can even conceive of having the opportunity to make. I mean, we are so blessed so lucky to be in the coaching space because of the amount of money and the amount of impact that we have the opportunity to make and to experience.

All right, so to wrap up here with just these four money rules, being profitable with every client, setting a minimum profit goal for every offer, having a place for the money to go, and emotionally embracing overflow, you're creating the money framework for a coaching business that is highly profitable. You become a higher earning coach, and you always have more money than you, quote unquote need. So you're prepared for anything that might happen, and you're experiencing that delicious feeling of cash freedom that you crave, but maybe didn't think could really happen for you. Trust me, it can happen for you.

Money loves clarity, and money rules like these that are so simple and so easy to embrace. They give you that clarity. As a money feminist, I take a stand for you always being at choice. I hope you'll choose to implement these four money rules because these are the money rules that absolutely changed my life so profoundly. I can hardly believe it. Except it's real. I truly believe this is the money work that needs to happen for you right now.

So thank you for listening. I would love it if you would drop me an email at podcast@kendallsummerhawk.com. Ask any question that you want about money, pricing, and coaching. I am all in and all here for you. All right, my beautiful soul. I will see you again in next week's episode.

Thank you so much for tuning into this week's episode of The Money Coach School Podcast. If you enjoyed this podcast, make sure you follow so you never miss an episode. Also, I would so love and appreciate if you would leave a 5-star review. Your review supports women just like you in discovering all of the juicy tips and insights I’m sharing here on how to coach women on money.

And if you want to learn how to excel at coaching women on money, definitely go to KendallSummerHawk.com and check out the wealth of money coach trainings that we have for you. Thanks so much for being part of this money coaching movement and for tuning into the show every week.