Illustrative executive coaching business model

We often get asked, “Can I be successful as a Certified Executive Coach?” and “Once I become certified as an executive coach, how much can I expect to earn?”

Of course, there are no guarantees and we won’t make claims about what you can earn as a Certified Executive Coach. It depends heavily on your background, network, skills as an executive coach (which we provide), and effort.

However, as the Founder of the Center for Executive Coaching, and the principal of my own executive and leadership coaching practice, I can share with you my business model. This is one model that we teach in our program. Unlike other executive coach training programs, we take a market-driven, practical view of the coaching profession. We have methods, systems, and tools to help you succeed — both in terms of getting results for clients and in terms of attracting new clients in the first place.

It took me six months to a year to get my practice off the ground about two decades ago. I made tons of mistakes, and share these openly in our program so that you avoid them.

However, after about six months, I knew that I would be successful. I knew that I could replace my then current income of $150,000 — and achieve a goal income of $250,000.

Here is the business model that I landed on, adapted to the present day…

First, the average coaching client for me pays $25,000 for a six-month engagement. I don’t charge by the hour or month. Most coaches secure a longer engagement, and I recommend you think about a 9-12 month engagement. I prefer a shorter coaching engagement of six months to give both client and myself time to see results and also decide whether we want to continue to work together. Also, $25,000 is in the mid-range and works well for executives and leaders in mid-sized companies. If you focus on senior leaders in Fortune 500 companies, you might charge a higher fee.

About 80-90% of clients renew for a second six-month engagement.

So, from coaching alone, in a single year, each client is worth $25,000 + (.8 X $25,000). That equals $45,000.

But wait….there’s almost always more.

I am not just a coach. I am a strategic advisor. That’s a better positioning statement. I am here to help my clients solve their most pressing problems. I do this as an executive coach, facilitator, trainer, assessment provider, consultant, and developer of custom programs.

With just about every engagement, I end up doing at least one or two of the following in addition to coaching the initial client:
– Coaching other individuals that my client refers my way.
– A team retreat in which we work together to help the team understand each other’s style, tackle performance challenges, and commit to new behaviors for higher performance. This is typically a $25,000 engagement.
– A strategic planning process. The Center for Executive Coaching provides you with powerful toolkits, including an amazing toolkit and process to help clients plan strategy and make sure it gets implemented. This process can be worth $60,000 to a client.
– A leadership retreat to discuss a change initiative that is not progressing as quickly as the client would like, with the intent of developing a plan to accelerate and build new momentum. This can be a $25,000 engagement.
– A training program for managers and leaders, about topics ranging from engaging employees to time management, influence, and communicating more powerfully (all of which are offered in your program as turnkey toolkits ready for coaching and training). For instance, a medium-sized client hired me to train 175 managers about engaging their employees. This was a $25,000 engagement.
– A program to offer assessments throughout the organization. This can lead to ongoing recurring revenue.
– A leadership academy. I can serve as the developer and facilitator of a leadership academy for high-potential employees. The fees for this type of program are at least $35,000 and often much higher.

In general, I can assume that each client will hire me for at least one of the above types of engagements, for an additional $25,000 during the course of a year. In reality, I get hired for more than one by each client, but let’s call it $25,000 to be conservative.

So…A typical client is conservatively worth $70,000 each year. With this model, I only needed 3 clients to replace my income back then, and 4 clients to achieve my goal.

I did much better than that.

In addition, I expanded my business model to include ways to get leverage and passive income, by offering clients products and programs they could purchase, by licensing my content to clients, and by hiring others.

I hope that this illustration shows you that you can be successful as an executive and leadership coach, too. It is not the only business model out there. We share other approaches, and work with you to find the model that works best for you.

The model that you DON’T want is the model that other coaching training programs often teach. They will tell you to charge a low hourly rate and use what I call the “Psychic Hotline” business model. In this model, you are on a never-ending treadmill, working too hard to get a large number of clients that pay you as if you were a low-value commodity. Avoid this model, and training programs that promote it, at all costs. You will never get ahead and you might never get to experience the full potential and joy that a career in executive coaching offers.

Now it is up to you: Do you have the passion, work effort, and desire to become successful in this field? If so, I am confident that the Center for Executive Coaching gives you the practical, results-driven tools, techniques, and processes to be successful.

Join us today. You will be so glad you did!

– Andrew Neitlich, Founder and Director, Center for Executive Coaching

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