A Practical Guide for Future Leadership and Business Coaches

The question “How to start a coaching business” is one of the most searched phrases among professionals seeking greater impact and autonomy in their careers. As organisations increasingly embrace coaching to develop leadership capability, the coaching industry has shifted from boutique service to strategic corporate function. To build a sustainable practice, aspiring coaches must navigate not just coaching competency, but business strategy, financial planning, and market positioning.

This article pulls together industry data, research, and practical insight to guide experienced professionals; particularly those transitioning into leadership, executive or business coaching, on the essential pillars of launching a coaching business.

Industry Growth: “How Big Is the Coaching Market?”

Understanding the scale and trajectory of the coaching industry provides important context for anyone considering how to start a coaching business.

• Global coaching market size: Estimated at over US $5.3 billion in 2025, with projections to grow beyond US $9.5 billion by 2032 – reflecting robust demand and steady compound annual growth (8%+ CAGR).
• Growth in practitioners: The number of coach practitioners worldwide has expanded by more than 50% since 2019, surpassing 120,000+ professionals (ICF study, 2025).  Note:  There is a significant discrepancy between formal industry numbers and public listings. For example, while the ICF identifies ~123k practitioners, there are more than 1.7 million individuals listing themselves as “coaches” on LinkedIn. This suggests that over 1.5 million people may be practicing without certification from these major professional bodies.
• Demand from organisations: Leadership and executive coaching are widely used in corporate settings – with organisations reporting high ROI, deeper engagement, and strategic leadership impact.

Executive and Leadership Coaching

Executive and Leadership Coaching in particular, are among the fastest-growing niches within the industry:

• Executive coaching growth: The executive coaching market continues expanding, often valued in the billions with projected steady annual growth.
• Corporate uptake: A significant proportion of organisations embed coaching into leadership development strategy, with executive coaching ROI frequently cited between 5x to 7x or higher.

This expansion reflects a shift in organisational priorities: coaching is no longer a peripheral perk, but a systematic investment in leadership performance.

See the Global Professional Certificate in Executive Coaching.

Personal Qualifications and Experience

A foundational question in how to start a coaching business is whether your background aligns with the demands of professional coaching. Research into coaching effectiveness emphasises that strong technical expertise does not automatically translate into coaching competence.

Coaching Skillset vs Subject-Matter Expertise

Professional experience,  whether in leadership, HR, finance, or consulting, gives credibility. However, coaching requires a distinct capability to facilitate transformation, not just deliver advice. According to thought leaders in coaching psychology and adult development:

• Coaching competence requires disciplined listening, powerful questioning, contracting clarity, and an ability to foster insight rather than simply provide solutions.
• Coaching credentials (e.g., ICF, EMCC) and supervised practice, signal legitimacy and support ethical engagement.

Many organisations expect such qualifications when engaging external coaches. Effective certification and coaching practice differentiate you in competitive markets.

Subject-Matter Expertise

It is argued that coaches generally do not need subject matter expertise in their client’s specific industry, as their primary value lies in expertise regarding the development process, facilitation, and asking powerful, thought-provoking questions to drive personal/professional growth. While industry knowledge can be beneficial, the core coaching role is to empower the client to find their own solutions rather than providing advice. 

Leadership Expertise for Leadership Coaches

While not always requiring technical expertise in a specific industry, effective leadership coaches generally need strong foundational knowledge of leadership principles, theories, and behavioral research. While they do not necessarily need to have been a C-suite executive, relevant professional experience helps them understand the specific challenges and contexts leaders face. 

Key Requirements for Leadership Coaches then include:

• Knowledge of Leadership Principles: Understanding core competencies like emotional intelligence, influence, and strategy.
• Coaching Expertise: Proficiency in coaching methodologies, such as active listening, goal setting, and using assessment tools.
• Industry Context (Optional but Helpful): Understanding the specific industry or organizational culture.
• Evidence of Expertise: Top coaches often have a visible body of work, such as articles, talks, or recognized certifications, ideally in leadership and coaching. 

Ultimately, the role is not to provide answers (as in mentoring) but to guide leaders to find their own solutions, though having a background in leadership helps to facilitate this process more effectively. 

Business Expertise for Business Coaches

While not strictly mandatory for pure coaching, subject matter expertise (SME) is highly valuable for business coaches to provide tailored, strategic advice, and avoid “cookie-cutter” approaches. Coaches with industry experience better understand specific challenges, while those without rely on frameworks to guide clients. A hybrid approach often works best, blending coaching skills with industry knowledge. 

Why Subject Matter Expertise is Valued:

• Contextual Advice: Coaches with experience can offer strategic insights on, for example, marketing, finance, or scaling, rather than just asking questions.
• Faster Results: They can immediately identify industry-specific pitfalls and provide proven solutions.
• Credibility & Empathy: Understanding the niche allows the coach to build rapport and trust quickly. 

Ultimately, the best business coaches often have both; a foundation in coaching techniques and deep expertise in a particular business sector or function. 

Note: Coaching versus Consulting:

A useful (and simple) distinction can be drawn here between consulting and coaching:

• Consultants provide specific, technical solutions and often do the work.
• Coaches guide the client to build their own capability. 

Personal Readiness and the Entrepreneurial Mindset

Learning how to start a coaching business also means evaluating your personal readiness for entrepreneurship.

Leadership Mindset vs Business Owner Mindset

Experienced professionals may excel in corporate environments but struggle with the risk, ambiguity and self-direction that entrepreneurship entails. Key personal readiness considerations include:

• Comfort with uncertainty in income and client acquisition.
• Resilience during early growth cycles.
• Ability to self-manage and self-motivate over long development horizons.

Entrepreneurship research underscores that intrinsic motivation and self-efficacy are stronger predictors of early success than technical skill alone. Planning a realistic timeline, often 18 – 36 months to build sustainable practice,  helps mitigate burnout and frustration.

Resources and Financial Planning

Financial preparation is crucial in the coaching business context.

Financial Realities of a Coaching Practice

While coaching has relatively low overhead compared to product-based startups, it still involves costs that must be planned for:

• Marketing and business development.
• Professional training and credential maintenance.
• Software and operational systems.
• Contracting, legal and compliance frameworks.

Small business data shows that around 50% of new businesses fail within the first five years — often due to inadequate capital or unrealistic financial assumptions.  However, numerous studies suggest that between 80% and 85% of coaching start-ups do not last beyond the first year.

Coaching businesses follow similar small-business patterns: many fail to reach profitability early due to under-pricing, insufficient marketing, or inconsistent lead generation.

Such statistics highlight the importance of financial runway, conservative revenue forecasting, and a phased transition plan.

Systems and Technologies

In an increasingly digital world, coaching practices benefit from scalable, reliable systems, including:

• Video conferencing platforms (Zoom, Teams).
• Scheduling and payment automation (Calendly, Stripe)..
• Customer Relationship Management (CRM) systems.
• Secure data storage and privacy compliance (GDPR/PDPA frameworks).

Technology supports operational efficiency and professional presentation. When clients encounter smooth logistics, this reinforces confidence and credibility in your services.

Coaching Software Platforms

Popular coaching software streamlines client management, scheduling, and program delivery, with top options including Coach Catalyst for all-in-one management. Paperbell for simple booking and billing, and CoachVantage for comprehensive 1:1 or group coaching. Coaching.com also provides a robust platform designed for managing coaching practices, and Kajabi is Popular for combining coaching, course creation, and marketing.

Alliances and Strategic Partnerships

The path of how to start a coaching business is significantly accelerated by relational capital, such as:

• Partnerships with HR leaders and learning & development teams.
• Collaborations with consulting firms or training organisations.
• Referrals from professional networks.

Emerging evidence from entrepreneurial ecosystems shows that relational support is strongly correlated with venture scalability and resilience.

Rather than working in isolation, successful coaches often build networks that create referral funnels, speaking opportunities, and corporate contracts.

Franchise and Structured Entry Options

For some aspiring coaches, franchising or joining established coaching networks offers a structured entry point. Choosing a coaching franchise when starting your business provides a proven, “turnkey” model that allows you to bypass the trial-and-error, brand-building, and marketing development phases of a new venture. Franchises provide structure and support, reducing the risk of failure compared to starting from scratch. 

Advantages of Choosing a Coaching Franchise

Here are the primary advantages of choosing a coaching franchise:

1. Proven Business System & Intellectual Property 

• Ready-to-use Frameworks: Instead of creating your own, you receive established coaching methodologies, tools, and materials to start coaching immediately.
• Speed to Market: Franchises offer a faster, more direct route to securing clients and generating revenue, often allowing for income in the first few weeks.
• Reduced Risk: Studies show coaching franchises have a high success rate (approximately 90%) compared to independent startups, which often struggle with high failure rates. 

2. Immediate Brand Recognition & Credibility

• Instant Trust: Operating under a recognized brand, such as ActionCOACH or similar entities, builds instant credibility, reducing the time needed to gain client confidence.
• Marketing Support: Franchisors typically provide ready-made marketing campaigns, website setups, and SEO, saving you the expense of creating these from scratch. 

3. Comprehensive Training & Ongoing Support

• Initial Training: You receive intensive, often in-person, training on how to run your business, use the systems, and deliver high-quality coaching.
• Ongoing Mentorship: Franchises typically offer continued support, such as weekly, fortnightly, or monthly coaching sessions with experts to help you reach specific financial goals. 

4. Community & Network

• Collaboration Over Competition: You become part of a larger network of coaches, allowing for collaboration, brainstorming, and sharing of best practices.
• Support System: In times of illness or emergency, you have a support team and fellow franchisees who can help manage your clients. 

Disadvantages of Choosing a Coaching Franchise

Choosing a coaching franchise offers the appeal of a “turnkey” business, but it comes with significant downsides, primarily high costs, rigid operational constraints, and a loss of autonomy. Here are the primary disadvantages of choosing a coaching franchise:

1. Financial Disadvantages

• High Initial Investment: Startup costs can be steep, often ranging from tens of thousands to over $100,000 for the initial franchise fee, training, and marketing.
• Ongoing Royalty Fees: You will likely pay ongoing fees (often 10-25% of revenue) to the franchisor, which can significantly eat into your profits, even when you are just starting to build a client base.
• Hidden and Extra Costs: Beyond royalties, you may be required to pay for mandatory annual conferences, specialized software, marketing contributions, and initial training. 

2. Operational and Creative Restrictions

• Limited Autonomy: You are not entirely “your own boss.” You must operate within the strict rules, systems, and brand guidelines of the franchisor, leaving little room for personal innovation.
• Rigid Methodologies: Franchise models often use a “one-size-fits-all” approach, which may not allow you to customize coaching for specific client needs.
• Territory Constraints: You are typically restricted to a specific geographical area, limiting your ability to expand your market or operate outside of those boundaries. 

3. Business and Brand Risks

• No Guarantee of Success: Despite the “proven” model, you are not guaranteed profit, and you must still put in significant effort to acquire clients.
• Contractual Obligations: You are bound by a legal agreement that may include a “restraint of trade” clause, preventing you from operating in the same industry if you leave the franchise. 

4. Potential for Lower Long-Term Value

• Lower Earning Potential: Because of royalties and fees, you may have a lower net income compared to an independent coach, particularly if you are successful on your own.
• Lack of Flexibility: If the franchise’s systems do not work in your specific market, you may be stuck in a difficult situation without the freedom to pivot. 

Franchise models may suit those who prioritise stability and structured support over independent entrepreneurship.

Challenges and Risks in Starting a Coaching Business

Despite strong market growth, coaching businesses face significant risks.

Key Challenges

• Market saturation in generalist niches –  emphasising the value of niche clarity.
• Under-pricing and inconsistent marketing effort – leading to revenue volatility.
• Role ambiguity – especially confusion between consulting and coaching roles.
• Business discipline gaps – including sales, enrolment and client acquisition.

While general small business failure rates are high, coaching businesses face specific challenges, with an estimated 80% to 85% not making it past this initial, critical period. These high rates are largely due to a lack of business acumen, such as inadequate marketing, sales, and pricing strategies, rather than a lack of coaching skills. 

A Structured Step on “How to Start a Coaching Business”

A strategic approach to launching a coaching practice involves three interlinked foundations:

1. Clarity of Identity and Positioning — defining niche, value proposition and ideal client.
2. Capability and Credentialing — coaching competence, business fundamentals, ethical frameworks.
3. Sustainable Commercial / Business Model — financial planning, systems, partnerships, and disciplined growth rhythm.

Rather than reactive tactics, this approach emphasises strategic preparation and disciplined execution… and a coherent Business Model.

The Global Management Academy Coaching Business Readiness Self-Assessment

To support aspiring coaches in this transition, Global Management Academy has developed the diagnostic tool:

“Are You Ready to Start a Coaching Business?”

This self-assessment evaluates readiness across:

• Personal Motivation and Entrepreneurial Drive
• Coaching and Business Aptitude
• Resources and Personal Readiness

Rather than offering superficial encouragement, the assessment helps professionals surface development priorities and design tailored growth plans. The diagnostic is a core component of our comprehensive course: Managing a Coaching Business

This course equips you with the strategic, operational and psychological foundations needed to build a credible and sustainable coaching practice.

Conclusion

Learning how to start a coaching business is not simply about passion for coaching –  it is about building a sustainable enterprise.

The coaching industry is expanding, especially in leadership and executive domains, offering fertile opportunities for experienced professionals. But success requires:

• Strategic positioning
• Operational systems
• Financial realism
• Entrepreneurial resilience
• Network leverage

For those ready to invest in disciplined preparation and structured support, the rewards,  both personal and professional, can be substantial.

Considering a career in Executive Coaching, see the Global Professional Diploma in Executive Coaching.