How to Start a Career Coaching Business

Career coaches provide motivational, empowering, and tailored support to clients seeking to shake up their careers. The primary purpose of a career coach is to listen and offer advice to clients who are unemployed, unhappy with their current employment, or just looking for a change. Depending on a client’s specific goals and needs, career coaches may also assist with resume and cover letter writing, interview prep, and skill assessment.

In order to assess a client’s goals, skills, and relevant personality traits, a career coach may administer questionnaires or personality tests during initial sessions. Or, they may simply lead discussions aimed at figuring out where the client is, where they want to go, and what has to happen in order for their goals to be realized. Some clients may have clear career goals in mind and will want help achieving those goals. Others may need help identifying what their goals even are before they can move forward. Regardless of a client’s needs, a coach’s primary task is to help them make progress.

With this in mind, a career coach’s job is not to find jobs for their clients. Rather, it is to help the client figure out what jobs to look for and learn how to increase their chances of getting those jobs. Although a career coach is not a therapist, they do act as an unbiased third party whose objectives include helping their clients find contentment and fulfillment in their lives.

Before you get started, you’ll need an idea of what resources you’ll need—and how to monetize your business in a practical way. We’ve answered the biggest questions about clients, costs, and profits below.

Who is the target audience?

The target audience for a career coaching business is people who are, for whatever reason, seeking to change their work life. Perhaps they’ve been out of work for awhile, or have reached an upward mobility dead-end at their company. Some coaches may target recent college graduates, but the most common and lucrative population to focus on is mid- and high-level executives. They have the money to pay for career coaching, as well as the drive to seek it out.

Another likely demographic when it comes to career coaching clients is the soon-to-retire. Often, retirees transition into full-time retirement slowly. In the interim, they may try out something new or work as a consultant in their field. But before they decide what’s next, they’ll often seek the advice of a career coach to help them sort it out.

To narrow the focus even more, some career coaches may specialize in specific industries, perhaps healthcare or law. This type of specificity is generally reserved for coaches who’ve worked in that industry themselves prior to becoming coaches. In this case, coaches may contract with entire offices, rather than solely with individuals. It may seem counter intuitive, but sometimes companies will bring in career coaches as a way to improve employee satisfaction and job performance.

Regardless of your focus, you will want to have one. Not only will this make your marketing efforts more effective, but it will also render you more of an expert at what you do. In this industry, it’s much better to have specialized knowledge about fewer fields or populations than it is to have surface level knowledge about more.

How do I get clients?

To find career coaching clients, you will need to be a dedicated networker with a professional online presence. Start by setting up a website that details your experience, methods, and specialties. (How can you help your clients? Why should they choose you? What sets you apart from the rest?) In the beginning, consider taking on some clients pro bono or at a discounted rate in exchange for them writing testimonials that you can put on your website. If potential clients can see that you’ve helped others, they’re more inclined to believe that you can help them, too.

LinkedIn will be another helpful platform when finding clients. Not only is this a place where potential clients might go when looking for a new job, but people can search for career coaches on this platform, and you can advertise here as well. To further expand your regional business reach, consider joining your local chamber of commerce or other local professional organizations, as well.

Community networking will also be extremely beneficial when it comes to finding clients. Career coaching is a profession where referrals go a long way—much like when someone is looking for a hairdresser or doctor or therapist. Often, people start by asking their friends. The more contacts you have, the more friends will be talking about you.

How much money will it take to get started?

Starting a career coaching business has relatively low required expenses, but optional expenses can be many thousands of dollars. To get started, you will need a computer (at least $1,000 if you don’t have one). While you don’t necessarily need to rent out an office (at least not while the world is primarily virtual) you do need to have a professional-looking office space where you can video chat. Depending on your current set-up, you could spend as little or as much money as you want to make that happen. (Think clean backdrops, good lighting, minimal outside noise.)

But the real potential expense to consider relates to career coaching certification. This is not a requirement of the profession—not all coaches are certified. And, certainly not all certifications are created equal. Doing adequate research prior to signing up for a certification program will be key. But if you have limited career experience yourself, are completely changing career paths to start this business, or just want to boost your coaching knowledge, then it may be worth looking into a certification program.

Georgetown University offers an executive certificate in Leadership Coaching that takes the form of eight courses over eight months, and costs $13,995. The National Association of Colleges and Employers offers a 30-day certification program for $3,188 and a 60-day program for $5,352. Numerous other certification programs exist, though many do not offer pricing information without collecting your information first. If you do decide to pursue certification, make sure you do so from an accredited organization—unfortunately, there are many scams in the career coaching world.

How much do career coaching businesses make each year?

A career coach makes an average salary of $56,222, according to ZipRecruiter. However, there is a substantial range. At the low end, career coaches are reported to make $23,000, and at the high end they’re reported to make as much as $226,500. Part of the reason for this disparity is that many people choose to coach part-time, as a supplement to other work. Another reason has to do with clientele: the higher your clients are on the executive food chain, the more you can charge.

How much should I charge?

The most common hourly rate for a career coach lands between $75 and $150. However, some coaches are reported to charge $500 an hour and up. Keep in mind that this is rare, and will only be achievable after many years of quality coaching experience. How much you charge for your career coaching services will depend on your experience, location, and target audience. (A recent college graduate can’t pay as much as a soon-to-retire CFO, for example.)

Have a great name idea? Before you start marketing and branding your business, you’ll need to ensure your name is available. Most states prohibit or restrict businesses from adopting names that are already in use. Even if it’s legally allowed, a copycat name puts your business at risk of a lawsuit.

See if your business name is available in your state with our Free Business Name Search.

Trademarks and Domain Names

Plan to trademark your business name? You can see if the trademark is available on a website like Trademarkia. It’s also a good idea to see if the domain name is available, which you can do on websites like Network Solutions and GoDaddy. Even if you don’t plan on putting together a website right away, you can buy the domain name to make sure no one takes it in the meantime.

Should you form an LLC? A sole proprietorship? Your choice of business structure will affect many aspects of your business, from liability to taxes.

Sole Proprietorships & General Partnerships

If you don’t file any paperwork to legally form a different kind of business—you have a sole proprietorship or general partnership. Essentially, these are “default” business structures. A sole proprietorship has one owner, and a partnership has multiple owners.

These structures have a few initial benefits. They’re easy, fast and cheap to start and maintain. However, the limitations and risks of these business structures quickly become more apparent as your business grows. In both of these business types, you are your business, legally speaking. Your company’s legal business name is YOUR name—so you’ll need a DBA to operate under any other name. Any business debt is YOUR personal debt. If anyone sues your business, they are suing YOU personally.

LLCs & Corporations

Limited liability companies (LLCs) and corporations are business entities formed at the state level. The entity is legally separate from its owners, meaning the owners are not personally liable for the debts and obligations of the business. As a separate entity, the business also has multiple tax election options. For example, both LLCs and corporations can choose to be taxed as S-corps if they meet the requirements.

LLCs and corporations are not quite as simple and inexpensive as default structures. LLCs and corporations come with formal requirements like state reports. They also have more fees than default structures, such as formation and annual report fees. However, the benefits of an LLC or corporation—especially liability protection and tax flexibility—are significant.

Check out LLC vs Corporation and Why Turn a Sole Proprietorship into an LLC to learn more about choosing the best structure for your business.

If you opt for a sole proprietorship or general partnership, there’s no formal paperwork to file to legally create your entity—you just start selling your product or service. However, you will not have anyliability protections or tax flexibility.

LLCs and corporations are formed by filing paperwork with a state agency, typically the Secretary of State. To start an LLC, you file articles of organization. To start a corporation, you file articles of incorporation. In most states, you can file these forms online or download a paper form from the state’s website.

Whether you’re forming an LLC or corporation, your articles will require certain basic information about your business, such as your company’s:

• name
• business address
• registered agent and office
• business purpose
• members/managers or directors/officers’ names and addresses
• number and type of authorized shares (for stock corporations)

You’ll also need the signature of someone authorized to sign on behalf of the business, along with the state’s filing fee. Fees vary by state but are typically between $100 and $200. If you hire Northwest to form your LLC or corporation, we complete and submit your formation paperwork on your behalf for just $100 plus state fees.

It’s important to put your company’s internal policies and procedures in a written document, especially if you’re starting your business with others. Partnerships have partnership agreements. LLCs have operating agreements. Corporations have bylaws.

These documents look a bit different for each kind of business, but they serve the same general purpose. They ensure there’s a clear path forward for any major issue that may arise, from changes in ownership to closing the business. LLCs and corporations also typically need an operating agreement or bylaws in order to open a bank account.

Get a free template for an LLC operating agreement or corporation bylaws.

Nearly all LLCs and corporations will need to request a federal employer identification number (EIN) from the IRS. If you file corporate income taxes, have employees, or file certain franchise taxes, you must have an EIN. An EIN is also a common requirement for opening a business bank account. Most businesses can request an EIN by filling out the IRS’s online form.

Your EIN is for federal taxes—but you’ll likely have state and local tax obligations as well. You will most likely need to set up an account with the state’s Department of Revenue, and you may need to apply for a state tax ID or a sales tax license as well.

Learn more about how to Get an EIN for your business.

A business bank account keeps your personal finances separate from your business finances. For LLCs and corporations, keeping separate finances is essential for maintaining liability protection. To open an account, LLCs and corporations typically need to bring to the bank a copy of their articles, their operating agreement or bylaws, and their EIN.

Many businesses will need a business license to operate. Licensing information—as well as any zoning requirements or other permits—can usually be found on the city or county website.

If your home is part of a homeowner’s association, you’ll also be subject to any of their restrictions for home-based businesses. Some areas may also require home-based businesses to obtain a Certificate of Occupancy (a document certifying the property owner has given the business permission to operate).

Though you’ll offer advice in a way that may sometimes feel adjacent to therapy, there is no job-specific licensing you need to practice career coaching. It is up to you to make sure you’re providing sound and safe advice.

After your business is up and running, there are a few additional steps you may want to take as you grow:

• Get online: With your domain name, you can create a business website. You can hire a professional or use a website-builder like Wix or WordPress. You may also want to invest in online ads through a program like Google Ads.
• Hire employees: Hiring employees requires quite a few steps. You’ll need to collect W-4s and I-9s from employees, report the new hires to the state, set up withholding, pay for unemployment insurance, distribute any required documents and notices to employees, and display wage and safety info in the workplace. Employer.gov is a good place to start, followed by your state’s tax or labor office.
• Get business insurance: While LLCs and corporations protect you from personal liability, you don’t want your business to go bankrupt in the face of an accident, injury or other disaster. At minimum, it’s a good idea to look into general liability insurance. Home-based businesses can sometimes add insurance onto their homeowner’s policy. For your career coaching business, it’s also a good idea to look into Errors and Omissions insurance. This will protect you against claims regarding inadequate or negligent work, such as if a client sues because your advice allegedly led to a financial loss. E&O insurance costs most small businesses between $500 and $1,000 a year, according to Insureon.

What’s it really like to work in a career coaching business?

Working as a career coach means being passionate about helping people reach their goals and knowledgeable enough to guide their progress. Career coaching is an industry with scams and ill-founded advice galore—you do not want to be classified as such, and the only way to avoid this is to be good at what you do. The better you are at your job, the more credibility you’ll earn, and the more clients will find their way to you.

This is a job that requires a lot of listening, a lot of prompting, a lot of networking, and endless amounts of empathy. You will be entrusted with people’s hopes and insecurities. It’s a heavy weight to bear, and you need to be emotionally equipped to bear it.

What does it take to succeed in the world of career coaching?

As a career coach, you’ll act as the helpful and motivational force that your clients may have been missing. Because of this, working in this field requires you to have an upbeat and cheery personality. This doesn’t mean that you can’t be honest and real with your clients, but it’s going to be difficult to motivate them if you’re grumpy and openly pessimistic.

Personality aside, being a successful career coach means being just as good at networking as you are at coaching. Luckily for you, you’re probably a people-person so this shouldn’t be a stretch.

But this job is about more than people. It’s about knowing what’s happening in the job market. What’s changed? What’s trending? What industries are growing and what’s being left behind? What skills do workers need to stay relevant? The more you continue your education and stay on top of changing markets, the better service you’ll provide, and the more success you’ll see.

Northwest Registered Agent is here to help with all your small business ideas and needs. Answer a few simple questions about your business, and we’ll prepare and submit your formation paperwork to the state. We also provide your new business registered agent service, free business forms and guides, and much more.

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