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For most coaches running a simple one-on-one practice, the stakes around money management aren't as high as you've been told — and the two things you actually need to know are smaller and simpler than you think.
Short episodes about money management for coaches running simple service businesses. I'm Mark Butler. My goal with this show is to convince you of one thing: for most coaching practices, bookkeeping isn't strategic, it's hygiene. You don't need to become your own CFO. You need your numbers to be current and accurate so you're not scrambling at tax time, and you need to be able to answer one or two simple questions about your money. That's it. I've been running a bookkeeping firm for coaches for over a decade, and this is the conversation I have with my clients all the time.
Mark Butler: Hey, this is Mark
Butler, and you are listening to
the "Money for Coaches" podcast.
Bookkeeping is not brain surgery,
and frankly, the stakes in a coaching
practice are not even that high when it
comes to keeping track of your money.
Now, I don't know if that's the most
effective sales strategy to say that
to the people who might work with me.
"Hey, the stakes in this
work are relatively low."
But you're not going to get into huge
trouble as a coach who's running a
simple one-on-one practice where you
maybe mix in some one-to-many offers
like group coaching programs or courses
or memberships, that sort of thing.
In a practice that's as simple as
that one, which my own practice is
as well, by the way, there's just not
that much going on with the money.
Now, why am I qualified to say that?
It's because I've been involved with
coaching in some form since 2004.
in the early years, I was in sales,
then I went into coaching and content
creation myself, and then around
2014, I became a kind of bookkeeper
and CFO guy for high-earning coaches.
And I've been doing that ever since.
Now, these days, I've divided
my business into two main areas.
On one side, I do life coaching and
relationship coaching, where my practice
probably looks a lot like yours.
And on the other side, I do bookkeeping
and money support for my fellow coaches.
And in the 12 or 13 years that I've
been supporting coaches around their
money, something that the coaches of
coaches have said all the time, and
these are the business coaches, the
mastermind leaders, these are the
people who say to us, me and my fellow
coaches, "You have to know your numbers."
And after doing this now for
over a decade, I can say,
yeah, you do, and you don't.
The more complex your practice is, the
more important it becomes that you have
a lot of understanding, even a very
granular understanding of your numbers.
But most of us, including me,
are not running practices that
require that kind of granularity.
For people who run practices like
ours, what we need to know about our
money really comes down to two things
Number one, at tax time, we want to
have current and accurate reports
so that tax preparation is easy.
You don't wanna have to scramble around at
tax time and wonder, "Is this deductible?
Is that deductible?
Where did I track those expenses?
Was it on that personal
card or this business card?
Did the money come from my personal
checking account or that business
checking account I set up?"
I don't want you to suffer
through any of that at tax time.
So in our case, knowing your
numbers throughout the year
saves you from all that hassle.
The only other reason you really wanna
have some sense of what's going on
with your finances in simple practices
like ours, is that you want to be
able to decide what is going to be my
approach to the money in my practice.
For example, am I willing to have the
practice spend more money than it earns?
in the early days, all of us when
our practices are new, are spending
more money than our practices earn.
But at some point, you establish
yourself a little bit, and a little bit
of money starts coming in, and you have
to decide, "What am I going to do with
the money in this practice, and how
am I going to make decisions about it?
What is the role of this
practice in my financial life?
What is the money supposed to do?"
We don't need to do complex budgeting.
We don't need to do complex forecasting.
But when you receive an offer to
do another certification or to join
another mastermind or to travel
across the country for a retreat,
you'd like to know two things.
You'd like to know whether your business
has generated enough money to pay
for that thing, or whether you'll be
using personal funds to support it.
You'd also like to know what else
you could do with that amount of
money if you didn't spend it on the
certification or the mastermind or
the personal coach or the retreat.
Because maybe you wanna do something
with that money in your personal
life, like pay for a family
vacation or a personal vacation.
Like maybe buy a new car,
maybe remodel a bathroom.
These are the decisions we want to
make confidently because we have such
clarity about how much money our practice
is actually earning and spending.
In my opinion, there's no wrong answer
to how you use your money in your
practice or in your personal life.
But what we don't want is to be in
a situation where we're in the dark
about what's going on with that money.
You just wanna be clear with yourself, and
maybe you wanna also be in a position to
be clear with a spouse or a significant
other because maybe they also have
a financial stake, not just in your
personal finances, but in the financial
performance of your coaching practice
I'm not very dogmatic about debt, by the
way, and I'm also not neutral about debt.
I don't encourage anyone, including
myself, to take debt on casually.
But as you have more and more clarity
about how much money the business is
earning and spending and what that
money is actually supposed to do in your
life, you'll be able to decide with more
clarity, am I willing to borrow money to
support the activities of the practice?
As coaches, we tend to be optimists.
That's what got us into coaching
in the first place for many of us.
But something I've encountered a lot
since 2014 is that coaches will look at
big expenditures like that certification,
that mastermind, or that retreat, and
they will say, with all the confidence in
the world, I have total faith in myself
that I'm going to make that money back.
I always get a return on investment.
I'm going to get that money back in
90 days or in 180 days or whatever.
I have plenty of experience
seeing coaches do that.
I have plenty of experiences
seeing coaches not do that.
You will make that decision with more
confidence and you will end up with less
regret in the long run if instead of
just spending the money blindly based
on some hope or some maybe strong, maybe
weak confidence that you'll generate
the money quickly to recoup the expense.
If you actually look at the money
ahead of time and say, is this amount
of money something that my business
can pay for from its own earnings?
And if so, is this how I want to spend the
money would actually rather do with it?
Around our very simple income and
outflow in our coaching practice,
the easier we will find it to
make a grown-up decision about the
next best use of the next dollar.
Bookkeeping supports all of this.
And bookkeeping is really easy,
especially forgive the promotion,
if you hire me to do it.
I would love to keep track of the money
coming into your practice and going
out of your practice and providing
you with very tidy reports that keep
things very clear and very current
for you in just a couple of months.
But whether you have me do it or
whether you do it on your own The
beauty of it is our coaching practices
are simple, and so the clarity
we want is not that hard to get.
It's just a question of whether you want
to take the time to learn to track all
of this for yourself or whether you want
to outsource it to somebody like me who
has built processes that make the whole
thing take about two minutes a month.
In any case, that's what we're
going to be doing on this podcast.
I will be talking about the money
decisions that coaches make, and I will
be talking about the mechanisms and
the processes we can use, you on your
own or with my help, to keep track of
the money coming and the money going
so that we stay clear and confident,
so we sleep well at night, so tax time
is easy, and so that we can spend money
in a way that minimizes our regret and
maximizes our satisfaction down the line.
Welcome to Money for Coaches.
I hope to be your guide, and
I'll talk to you next time.
By the way, if you already think I might
be a good fit to support you as your
bookkeeper, just go to getplucky.io
and look for the button that says
sign up or get started or whatever,
and we will take great care of you.
Talk to you soon.