Most small business owners consider hiring a coach at some point in their journey. According to a former bank director and small business owner, here is what to look for when hiring a small business coach.
Companies Don't Hire a Business Coach or Board Because They Like Giving Away Cash
If you've been on the fence about reaching out for help, consider the fact that there are ZERO public companies without a board of directors. It's actually a legal requirement for a corporation to elect a board. No one creates a large company without some help.
A CPA put it this way:
“My coach helped me double my income this year! Coaches get bashed all the time, and it's not fair. Almost all of my clients who make more than 300K HAVE a coach- especially the ones that are really young!”
An Eye-Opening Experience
The first time I sat on a Board of Directors, it was eye-opening. There were fifteen of us in the room, and no one was working for peanuts.
The company didn't hire us because they liked handing out wads of cash. No, they invested in that because they knew that having external accountability and ideas would earn them far more than what they spent.
A top-notch business coach is like having a mini-board at a fraction of a full board cost. That's why coaches are normally used for small businesses that can't afford to shell out $50k a month for a single board meeting.
Coaching Should Go Beyond Getting More Business
Most business coaches can help you get more business. A good coach will also know the rules and help set your business up with a firm foundation. The best ones will help you refine your offerings and processes to improve your bottom line and create a steady revenue stream.
You Should Have Clear Action Items From Each Coaching Session
Have you ever left a meeting wondering what the next step is? Good coaches will leave no uncertainty about that next step. You should have clear ACTION items to be completed before the next call.
Your Business Coach Should Help You Refine Your Processes
My sales process for business coaching is crystal clear. My clients visit my coaching page. There is ONE action for them to take, repeated in various ways. Sign up to move to the next step. The next step of the sales process is clear as well, and most people who take that first step end up becoming clients.
A good business coach should help you refine your own processes so they are clear. Clear processes make it so that your business can scale because you can automate it or train other people once you have those nailed down.
Your Coach Should Help You Lay the Foundation
I was visiting with a small business owner who owns a moving business the other day. We were talking about expanding his business beyond him, and an analogy came to me. Growing a business without a firm foundation is like stacking a heavy dresser on top of a wobbly glass end table in a moving truck.
“Growing a business without a firm foundation is like stacking a heavy dresser on top of a wobbly glass end table in a moving truck.”
If I dumped an extra 5,000 orders on you tomorrow, would you be able to handle that? A properly set up business should be able to expand to accommodate new business easily. Don't start with a flimsy glass table as your foundation, or your business is going to shatter into a million pieces when you add something heavy.
Your Business Coach Should Encourage You to Cover Your Assets
Things are relatively simple when it's just you, but following the rules gets more critical and complex as you grow and add people. That's where a good business coach can help. I've seen multi-millionaires go bankrupt virtually overnight because their business was built like a house of cards, and when the wind blew, all came tumbling down.
Your coach should help you follow the rules and make sure you have things like a proper LLC operating agreement, subcontractor agreements, policy manual, and insurance to cover yourself in the event of a problem.
Business coaches are not lawyers. On the other hand, your coach should speak intelligently about at least some legal and liability concerns.
Run if Your Coach Tells You Not to Worry About the IRS
I've seen far too many small business owners go pale as they find out that they owe many thousands in back taxes plus fines. You cannot continue to operate a growing business out of your household checking account or ignore the regulations without eventually facing the consequences.
If you don't think the IRS is watching, think again. If your business coach is advising you to ignore regulations, run.
Regulation Violations are Expensive
I remember asking during one board meeting the consequences of ignoring a violation cited on an audit report. It required us to hire additional people to stay in compliance, which meant costs would add up quickly. The answer was approximately $2.3 million every year. We voted unanimously to hire the people necessary to satisfy the regulation.
A business coach isn't your accountant or attorney, but they should help get your business set up with a solid foundation so you can grow.
A Good Business Coach Capable of Building Their Own Business Isn't Cheap
A Lodestone Global survey that evaluated 331 companies reported that the average board of director member has a total annual compensation of about $36,000.
Though a board of directors' pay pales compared to that of CEOs, compensation for board service can inch into the half-million-dollar range—and in a few cases, much higher. Below is a list of the highest-paid boards of directors at large-cap companies according to Equilar data.
The Best Aren't Cheap
|Company Name||Annual Director Retainer|
|The Goldman Sachs Group||$575,000|
|Valeant Pharmaceuticals International||$475,000|
|Everest Re Group, Ltd.||$447,030|
You want to hire someone who has actually built a business and managed people, not someone with only second-hand knowledge. A person like that isn't likely to get out of their cozy bed for $100.
A Small Business Coach Isn't the Same as a Board Member
Most reputable small business coaches won't charge as much as a director on a board because they don't have the same responsibilities.
A formal board of directors has legal responsibilities and voting rights on what happens in an organization. They can even fire the CEO if necessary. Going to jail, while unlikely, is a possibility if they mess up.
With a coach, you are in charge and make the final decisions. There is little to no risk to your coach other than their reputation, which means they normally don't demand the same level of compensation that high-powered board members do.
Industry-Specific Knowledge is Overrated
When I was hired to be a bank director, I had never worked in the industry. That's the reason they hired me; they wanted fresh ideas from a successful small business owner. They didn't need another banker.
I have worked with many businesses across a wide variety of industries. Management problems are often the same because people are the same. Sales are sales, although there are differences between retail and high ticket sales. Service is service, again with minor differences between industries.
Hiring someone outside your industry can bring in fresh ideas. Just make sure they have run a successful business personally and managed people.
Hire a Business Coach Who Has Run an Actual Business
TLDR: When looking for a small business coach, make sure they have run a business, and managed people. Ensure they know how to lay the proper foundation so you can grow and aren't simply pushing lead generation. Expect to pay well and ask more questions if they are really cheap; this is one area you usually get what you pay for.