Ep. 27 Unpacking the Profitability of Health Coaching: Is it Worth the Investment?
Is Health Coaching Profitable?
In this episode of Becoming a Health Coach, the host, Megan J. McCrory, talks about the profitability of being a health coach. She discusses various aspects, such as defining profitability, understanding business aspects of health coaching, recognizing both financial and non-financial aspects of profitability, and the importance of understanding one's motives for becoming a health coach. Megan stresses the importance of a concrete business plan, diversification of income streams, and being cognizant of financial challenges. She also shares some lessons from her experiences as a health coach and emphasizes the potential profitability of health coaching with good planning and strategic execution.
00:04 Introduction to the Podcast
00:30 Understanding Profitability in Health Coaching
01:36 Introduction to the Host
02:38 Defining Profitability in Health Coaching
05:25 Different Revenue Streams in Health Coaching
10:59 Non-Monetary Rewards in Health Coaching
13:23 Investments in Health Coaching
20:41 Diversifying Income Streams in Health Coaching
28:23 Financial Challenges in Health Coaching
32:09 Conclusion: Is Health Coaching Profitable?
34:41 Personal Experience and Lessons Learned
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[00:00:00] Introduction
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[00:00:00] Hello and welcome back to Becoming a Health Coach, the podcast that's giving you resources and information on your health coaching journey, whether you are already a health coach or you're thinking about becoming a health coach. That's what this whole podcast is about.
[00:00:17] Today, we are going to be unpacking, is health coaching actually profitable? Is it actually worth the investing time and money into health coaching? And we're going to do that by highlighting and explaining a little bit about the business side of health coaching and looking into seeing like, how do you define profitability?
[00:00:43] There's also, there's financial profitability. There's also inner peace and other ways to define profitability. But if you want to make this a business, it is really important to understand how to be profitable as a health coach. If you're looking to be a health coach just simply because you like helping people and it is more of a hobby, then you don't really need to worry about the profitability side of things.
[00:01:08] I'm Megan McCrory. I am a certified international integrative health coach. I received my certification from IIN, the Institute for Integrative Nutrition in 2018. I also have a specialty in gut health and in hormone health, both from IIN. And I love talking about health coaching. I am not. Currently practicing as a health coach.
[00:01:31] I will, I think I've talked about that in some previous episodes about how I've shifted my focus, if you will, or my niche I still am very passionate about it. But it is very difficult to be profitable with it. But there are some ways about ways to do that, to make money doing something that you love.
[00:01:57] So let's dive right into that.
[00:02:00] Segment 1 - Defining Profitability
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[00:02:00] To begin with, let's define what profitability means as a health coach. Now, The traditional financial aspects of profitability is the money that you make after you've paid all the bills and paid your taxes and paid yourself. That is what profitability means. A lot of coaches choose to organize themselves as self employed, I believe is the term. I'm right now I'm, going in my brain, I'm using the German term, which is Einzelthermer, which obviously, yeah, it just means a single person owned or a solo entrepreneurship. You can also open an LLC or game by how or whatever this limited liability type of company.
[00:02:50] So profitability also defines on how you define your business, right? So if you do actually open a company like a limited liability company, that company has its own bank account. That company has its own financial records. And so it's. Much more clearly you can see profitability because you have, you're paying for all of your business expenses out of that business account.
[00:03:16] And then likewise, your revenue is going back into that business account and therefore you can see the profitability. of the business much more transparently sometimes than you can if you are a person who does not choose to open an LLC, but chooses to keep your books yourself your, financial planning and your bookkeeping yourself and register or yourself depending on the country you're in as a, like a solo business.
[00:03:47] And in that respects, it can be a little bit more tricky to see if you're profitable just from a bookkeeping point of view. Obviously, if you're keeping your books well, you'll also see if you're profitable. So that's what we mean by financial profitability, which is the amount of money that is left after you've paid everything else.
[00:04:09] Aka the amount of money that you might have to reinvest into your business. Or the money that you might be able to hire an assistant or another coach to help you. So that's what we mean by profitability. We don't mean profitability in the sense is, can you pay yourself? That should be part of your business plan.
[00:04:30] Profitability is really how much can you pay yourself and is the business itself actually making money.
[00:04:38] Revenue Streams
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[00:04:38] Okay, so there are obviously various revenue streams that health coaches can use to get revenue. The most traditional approach is one on one coaching, and This has very, I would say, very limited profitability potential simply because you're only one person and if you're doing this by yourself, which I think most of the listeners who are listening to this have the concept of doing it by themselves, you only have so many hours in the day, so the profitability of one on one coaching is quite low unless you're coaching someone for 5, 000 an hour and then tell me how you found that client.
[00:05:22] The second Most popular revenue stream when it comes to coaching is a group coaching now group coaching in terms of revenue Can be higher and it also in terms of profitability can be higher because you are Allowing multiple people to all take the same hour And you're, they're paying more, let's say more revenue is coming in, but necessarily the people might be paying less per person than a one on one coaching session.
[00:05:52] But in general scheme of things, you can scale that a little bit better, right? You can have five, ten people in a group when you're doing group coaching, whatever is reasonable for your style of coaching. And the profitability definitely takes a step up from one on one coaching there. The third popular revenue stream are workshops.
[00:06:15] Workshops have a really great way of being profitable if you actually price your workshops according to the value you're giving to people. I see a ton of health coaches and life coaches giving away workshops for free and trying to find clients that are then one on one clients. Or group coaching clients, and that can be good to a certain extent.
[00:06:44] Workshops are a good way to attract people. However, we tend to give that value away for free. So if you want to know more about pricing and pricing strategy, I have a friend I'd love to bring her on. the podcast, and she also has a few episodes talking about pricing strategy and your value and understanding what you can charge for your services.
[00:07:09] However, if you do charge for your workshops, that's a great way to make money. That's a great way to make profitability because again, it's like a one of group coaching situation. So you will you have many to one, right? So many people to one of you equals is going to inherently equal a little bit more profitability.
[00:07:31] However, with workshops typically comes either some potentially some logistics. So if it's an in person thing, you have to keep in mind, do you have to pay for the space that you're going to host the workshop? If it's online, you have to maybe pay for whatever. Telecommunication, video conferencing, services that you're using in order to host the workshop.
[00:07:55] So those are things that factor in but typically that's not too big of an expense. It depends on where you're, located, but workshops are definitely pretty good in terms of profitability. There are lots of other revenue streams and ways to get money as a health coach. But those were just a few just to give you an idea of how you might think about which of your services are more profitable than other services.
[00:08:28] And you can do this by putting together a simple matrix of like how much it's going to cost to start that program. How much capacity do you have to provide that service? It's just comes down to numbers, right? If you can only coach four people a day for four hours and that's your limit, that's 20 people a week.
[00:08:53] And then you can just do the math, how much you're going to charge for that versus how much it actually costs. To, provide those services, meaning all your overhead and everything like that, especially if you're online and you have a lot of services that you use software as services subscriptions and things like that.
[00:09:11] So it's pretty easy to calculate even just giving a rough calculation, which is probably where most of you should start. You don't need to get too detailed unless you're really trying to trim some fat, but it is good to, to do that analysis between your different services to find out, in your looking at it from a face value, if you charge for a six month health coaching plan, a thousand dollars it sounds like a lot, but you can only do so many of those and hunting for each of your clients can take a bit, okay.
[00:09:48] of time, right? So build a matrix, analyze the different aspects of the different services, and see which one is going to have the most profitability, and start there, right? Because you need to start by making sure that you can make a profit on your business.
[00:10:05] The last thing I want to say about the definition of profitability is really, what are the non monetary rewards that you get from being a health coach? Many of you who I've talked to and met in the real world are health coaches because you have a passion. Either the passion is derived from your own personal health journey or health problem from a family member.
[00:10:34] Or you're just in general a nurturing soul and you desire to help people. And. There is a, air quote, profitability for doing what you love. And this really then gets down to the nitty gritty of asking yourself, am I doing this to am I, do I want to be a health coach because I think I'm going to make money and I want to use this as my livelihood, or do I simply want to do it because it, feeds my soul in a way that something else can't.
[00:11:15] And those are some tough questions you have to ask yourself. I've asked myself these questions as well. Especially when you struggle to find clients, which is one of the biggest things that you see everyone talking about online is finding clients. And then you have to ask yourself, okay, why am I doing this?
[00:11:32] What's the real purpose of, starting? A health coaching journey and I want to put that out there that it is. A OK to be a health coach, a hobbyist health coach. A hobbyist health coach is somebody who just does it for the fun of it they want to help others they want to, yeah, they want to have that joy in their life.
[00:11:57] And I think that is absolutely great. And though, I think that works best for people who cannot risk starting their own business because of. Financial responsibility whether that's family or whatever the financial responsibility is, and then there are some people who don't have that financial responsibility.
[00:12:19] So they have a little bit more luxury in order to take some risk in terms of trying to start a health coaching business. Okay. So I feel like I've only gotten through a few bullet points and I have so many more to go
[00:12:35] Segment 2 Investment in Education and Certification
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[00:12:35] Okay, now we're gonna move on to investments.
[00:12:39] There are some initial investments when it comes to becoming a health coach or any coach specifically in the investment of education and certification. Now I'd like to talk in a different episode like is it I'm not really required to have a certification in anything, to call yourself a coach.
[00:13:03] Let me know what do you think? Do you need one? Do you need a certification? Do you need education? Maybe you are... Maybe you are in a corporate environment where you actually act as a coach and you don't have a certification But you've gained all the skills. I don't know. Let's it's a very interesting Question, but let's move on to talk specifically about investing in your education and certification for health coaching.
[00:13:33] I went to the Institute for Integrative Nutrition in 2018. I believe that their health coach training program, their basic one, not the accelerated one, but the annual or the six month one, I think it runs a little over 4, 000 U. S. dollars. Now they're off, they offer discounts all the time. So I did not pay that much. I think I paid 3, 500 maybe.
[00:14:01] But still, that's it. Quite an investment for a hobby. But a lot of people invested that money and not everybody wants to become a health coach afterwards. They invest the money, like I said, to be a better parent, to help themselves. So there are a multitude of reasons why you can go through a health coaching certification program and not become a health coach afterwards.
[00:14:30] However, it is a lot of money. There is obviously a lot of variety in certification programs. You have six week certification programs, you have one year certification programs.
[00:14:43] You have programs that are being run by major universities that you can get a Major in coaching. So there is a wide range of investment potential in terms of your education and certification. I think it depends on where you are in your life when you've decided to do health coaching. Are you working full time?
[00:15:07] Do you want it to be a hobby? Is this something that you're going to quit your main job and start a whole business? Is it just a side hustle? So all of those things factor into how much are you willing to invest and how are you going to get that investment back financially?
[00:15:26] You can get the investment back in other ways, like we've already talked about, which I. I don't want to discount because for me doing the IIN course was amazing. I, it's the healthiest I've been in a long time. So it's the, return on investment is again, financial, but also non financial.
[00:15:48] So keep both of those things in mind. Also, when you're talking about investing in your education and certification you're, going to want to look at the credibility. That a certification gives you in the market and beyond your certification, you have things like IFCC, the International Federation for Coaching which can once you've passed an initial certification or education program, then you have to log so many hours and apply to be recognized by this coaching federation, which is again, another step.
[00:16:25] of credibility that you can use in your marketing. And it just shows that you are keeping up with your education and that you're taking it seriously. So I believe that's probably one of the big things if you want to become a health coach and you want to be taken seriously, I think you do need to have some kind of recognized education and certification, More and more, I would say, actually getting some form of education, whether it's an associate's degree or a minor or a second diploma.
[00:17:04] There's a lot of opportunities that are available now. I believe that certifications are typically looked down on a little bit in terms of not as fully educated as something that you would take at a university. Primarily because It's, hard to regulate the content on the curricula in certification programs.
[00:17:25] But again, that kind of comes back to the IFC and other accreditation bodies which recognize those programs. So when you're looking for a program and you want to know, is it credible? This seems too good to be true. Go to the IFC website, and if it's not there, it could say something about the program.
[00:17:46] Personally, I would say my investment in my health coaching career did two big things for me. One, as I mentioned, I got super healthy in 2018, trying all the different health coaching aspects. But I would say more it just opened my eyes to the possibility of doing something different than the career that I already had.
[00:18:10] I wasn't ready to really break free from corporate life at that point, but it did plant the seed of something else out there. I could do something else with my time and energy on this planet in the limited time that we have. And I think that was a really great return on investment, if you will.
[00:18:31] Segment 3 Diversifying Sources of Revenue
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[00:18:31] Okay, continuing on with is health coaching profitable? I think that we need to talk about diversifying the different sources of revenue that we can pursue as a health coach. So what do I mean by diversification? With a traditional coaching model, you are trading time for money. You are trading your time for money.
[00:19:00] Whether that's in a one to one situation or a one to many situation, you're still trading your time. I'm, unless you haven't been on the internet in the last couple of years, you will have heard of passive income or passive income streams. What that means is, ways that you can make money that are not directly tied to your time.
[00:19:25] And diversifying your income streams does a couple really great things for you. First of all, it allows you to explore different avenues of how you can make money as a coach. IIN, for example, also has piggybacked on this with writing a book, writing your dream book. I took that course from IIN because I like IIN, I like their programs.
[00:19:52] And I took the Write Your Dream Book program, and yeah you can write a book about a topic that you're very passionate about, and this is something that will live on, you can sell, and also talk about the fact that you are an author. You can create online courses there are some beautiful platforms out there and I would love to talk about , the platforms to make coach courses.
[00:20:20] Do let me know if you're interested in, a whole episode about creating courses. You can create courses where you lead them, like a cohort based course which you can have as a higher price point, therefore, aka more profitability. Thank you. Or you can spend, I would say quite a bit of time, it takes probably at least 50 to 60 hours of actual labor to build an online course of any I would call quality content and video and audio, so on, so forth.
[00:20:51] But once you've invested that hours and you know that course is something that will sell, Then that is something that will live on and you can continue to sell that course again and again. This is what's called a digital product where the user doesn't get anything physical, but they get information or they get a digital file like a, book or something.
[00:21:15] But what we're talking about here is something where you don't need to have a physical inventory of stuff. So an online course is definitely a digital product and it's an information product. You can collaborate with other healthcare professional with other coaches, with other professionals to do different things.
[00:21:34] You can plan retreats together, you can, do workshops with each other. You can plan courses with each other. Working with another person is very helpful because you get a whole other point of view, plus some motivation and accountability, and that's a great way to expand your audience as well as ideas.
[00:21:56] You can also diversify your income streams by using such things like affiliate links for things that you do anyway. For example, I am an IIN affiliate. Let me say that again because that's on. I am. And IIN affiliate, I love the English language sometimes, and that means that when somebody clicks on my link to join IIN, I get a bonus.
[00:22:28] When you are passionate about services or products that you use all the time and you're going to talk about them anyway, why not get an affiliate link and have the opportunity to potentially make some money from somebody who buys the product because they heard it through you. There's nothing wrong with that.
[00:22:49] Now, there is a whole nother level of just becoming an affiliate marketer, and that's not what I'm talking about. I'm not talking about spending days setting up Pinterest boards with just links and links for Amazon and stuff like that. That's not what I'm talking about because I'm talking to you and you are a passionate individual.
[00:23:11] Otherwise you wouldn't be considering health coaching. Maybe that strikes interest in you, but for me, that does not strike interest in me. That, to me, sounds like simply a way to make money and not a way to help people. And if I can make money while helping people, I think that's an A But when I think about just sitting there and doing this kind of online research to find what swells and try to sell that with my affiliate link, It makes my skin crawl just a little bit, however, if you want to go to IIN and you're happy with the information I've given you and you want to give me a little kickback, I'm more than happy to do that because I believe in IIN as well as I believe in other things that I, like other products and services where I think that's a good product or service and I want to share that.
[00:24:08] Okay, so that's a little bit about diversifying the income stream and why that is good is when you are focusing all your efforts on selling your time for money, you will have. dry spells and you will have floods. There will be moments where you have three or four or five clients coming in all at once and they just want to throw money at you, which is nice.
[00:24:31] And then you have other times when you have nobody coming in and it's a big dry spell. And so that's a bit of variation in the revenue coming into the business and. Once you have a big enough pad in your business financial situation, those little dips and valleys don't feel so difficult.
[00:24:50] However, when you're starting off or if you just don't have a lot of clients right now, spending a little bit of time to diversify your income streams can allow a little bit, a trickle of revenue coming in. That is somewhat consistent and therefore can give you a boost. I wouldn't say you rely on it completely, but it's definitely gives you a boost.
[00:25:13] Segment 4 Financial Challenges
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[00:25:13] Let's talk about financial challenges. When you are If you're a solo entrepreneur and you want to start a health coaching business, you can do something called bootstrapping, which means you're just paying for it out of your own pocket and you are trying to make it work.
[00:25:32] Maybe you're paying for a website, maybe you're paying for a scheduling service or payment processor and things like that. And there's a little bit of money that goes out all the time when you're doing it this way. If you want your business to be online at all. I don't think I'm going to even talk about people who don't have any online part because I feel like that doesn't happen anymore.
[00:25:53] Everybody at least has something a little bit online. But what we face as... Challenges as health coaches, there's a couple things. One is pricing and having a pricing strategy that fits the value of your product. As I mentioned, I'm happy to bring on an expert to talk about pricing. The other thing that we struggle with is finding clients or selling the product.
[00:26:20] So there's, that's two kind of different ways, right? So when you're talking about selling. Your time for money. So one on one or group coaching or workshops You are actually trying to find people who will pay for that service When you have other things that are evergreen products like your course or maybe your book Then you are basically trying to market that all the time because it can be sold at any time So I guess you could think about it as time based Financial challenges and non time based financial challenges.
[00:26:54] So finding people to buy your book is a different type of challenge than finding someone to pay for your one on one program, both because they're different price points, but also because it might be slightly different target audience for the book than the course. So all of those things are struggles.
[00:27:14] The most important thing you can do is to have an amazing business plan and marketing strategy and pricing strategy. If I could tell anybody like myself or anybody else who's just starting out is to plan, plan research, I would say research and plan more than you think before you get started, but don't, I am a typically I research 10 percent and then just hop in and then I I learn along the way and I. the way and learn and fail and learn and fail. So I think that's important, but, really understanding what your business plan is, how you're going to find your clients, what services you're going to sell talking about how you're going to build loyalty, how you're going to build trust.
[00:28:12] And I feel like that's probably. The thing that most beginner coaches struggle with when they try to find new clients because they don't have a reputation They don't have Testimonials are so important when it comes to trusting a health coach especially also referrals and Referral people who have had your services and are referring you to somebody else.
[00:28:34] It's the best advertising that you can do
[00:28:37] Conclusion
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[00:28:37] to sum this all up let's skip right to the conclusion here. Is health coaching profitable? It can be. It depends. So if you are planning and you have a strategy and you are coming at this with a business focus, and understanding that you will have to do a lot of work, You can make a profitable business.
[00:29:08] You can make a profitable business. There's no doubt in my mind. I know people who are Profitable. They work hard though. It's not easy It's not something where you sit back and don't do anything But I think that's part of the joy is that you are working and doing something that you love When health coaching is not profitable is when you treat it like a hobby or you do not value your products, pricing your products according to their value or underestimating the amount of money that you're putting in on a monthly basis or, yeah, all these things.
[00:29:48] We think we effectively tend to really undervalue our services and that will drastically affect your profitability.
[00:29:56] In summary, You need to define what profitable is for you. If you are independently wealthy and you don't care about making money, your profitability is probably more on the satisfaction scale. Or if this is a hobby for you, your profitability is more on an internal, non financial basis. Investment, how much you're going to invest in this how you see that investment and then diversifying your income streams and knowing the challenges of how to sell your product before you actually start selling it.
[00:30:37] These are all of the major points that are going to tie into If your business will be profitable. So before I leave you, I will just tell you my business is not profitable yet. I have invested a lot of money, but I would say that I also know a lot more. And I've only been out, I would say, on my own business for a bit over a year now in terms of really trying to make it as a solo entrepreneur.
[00:31:10] And I would definitely say I know that I've had two big lessons learned, a financial lesson learned and also a time based lesson learned. And just for everybody who's actually still listening to this episode I have ADHD. I was diagnosed as a child and kind of ignored it. as an adult. And let's just say starting a business with ADHD is as my husband says, I'm starting five, five feet back from the starting line than everybody else, because I do struggle a lot with, I would say diversifying my time more than I should.
[00:31:57] Diversifying your income streams is important, but diversifying your time should not be. It needs to be very focused on making... One thing work , and I tend to, I have all these different ideas and I know that the mistakes I have made have been because I have not been focused and see something through to the end and to really give it a try.
[00:32:24] And then my financial mistakes came because I had bad advice when I set up my business so I run my business in Switzerland and I have a limited liability company and very briefly I thought I had to hire myself to work in my company but I didn't and because I made this mistake it was about 10, 000.
[00:32:47] Now the money's not gone because it technically goes into what the equivalent of social security is here but it was definitely not. Something that I was planning for. So if you want to hear more about my story about that, let me know. I can tell you some stories about starting a business, yeah, not in the U.
[00:33:12] S. and the extra effort it takes to do those things and why I did it. Let me know if you want to do that. That's it for me today and I want to thank you for listening and if you have any questions or comments you can head over to becominghealthcoach.ch and leave a comment on the episode for today and let me know or you can email me at becominghealthcoach@gmail.com
I love hearing from you guys. So many of you have emailed me reach out to me and talk to me and I absolutely love it please do not hesitate to send me an email and or drop a comment in the show notes Okay, till later. Bye
