Ep 31 Associates
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[00:00:00] Welcome to the business of executive coaching. I'm Ellie Scarf, an ex lawyer turned executive coach. Over the last 17 years, I've coached in house, I've been an associate coach, and I've run executive coaching businesses with teams of coaches around the world. My clients have ranged from global brand names to boutiques, startups, and more.
and organizations doing good in the world. I now run the Impact Coach Collective, a community of executive coaches who want to level up their business skills and take action in a community of like minded peers. I'm a traveler, a reader, a mum, wife and dog parent, and I know firsthand that our stories have a huge impact on our businesses.
The executive coaching business is tough. And I've learnt all the lessons through plenty of mistakes, and also with some great mentors. This podcast is all about growing a thriving executive coaching business. [00:01:00] You can build a coaching business that is profitable, sustainable, and that supports your personal goals, whatever they are.
I'll be sharing tips and ideas translated for your context, as well as stories from the field with brilliant coaches and mentors. If you want to level up your executive coaching business skills, Then this is the place for you.
So when you start a coaching business, specifically an executive coaching business, it's kind of like a choose your own adventure book. Did anyone else love those? I did. Although I used to have quite an elaborate set of you know, using my fingers to be able to track back four or five, just in case I did it wrong.
So maybe that's cheating, but in your coaching business, you can choose what you do, whether that is coaching facilitation or consulting, you can choose who you do it with. Right. Your clients, you can choose [00:02:00] how much you want to do or don't want to do. And you can choose whether you want your business to stay as a one person staff set up or grow and scale to being a coaching company that hires other coaches.
And, and employees, you know, employ staff. The typical pathway for coaches goes something like this. First of all, you are working in a corporate job. You either get coached or you do some coaching skills development in your role. You love it. And people tell you that you're good at it. And there's that sense that, Oh, this is this, this might be something that is for me.
You then go about studying coaching formally, if you haven't already done that. And then you might set up a bit of a side hustle. And it could be that you're doing pro bono hours or it could be that you're getting your first paying clients while you still have your, your regular job. After that, the next step is that you step out and you [00:03:00] officially start your executive coaching business.
Now you might be part time or you might do it alongside some consulting work, or you may go full time solo into your business. And that might include doing some associate work for other coaching companies. Or you might choose to go full time, solo, no associate work, build your business right from the start.
The next step for me is where it can get really interesting. I mean, it's all interesting to me, obviously you hear me talk about this week in week out, but if you are building up a good pool of corporate clients you may have some repeat business. There's a point at which you may want to do a less little, less hands on coaching yourself.
You might be overwhelmed and you might get to the point where you decide that your next step is to be able to offer some other coaches so that you can get more traction in with those clients. Of [00:04:00] course, there is overlap and there are interactions between these various steps in the process, but roughly that is the path that you'll go down.
I want to talk about this transition specifically to having your own pool of associate coaches because it can seem easy when you think about it, but in reality, it is not. Easy. It is not simple. It's actually quite complicated, but that doesn't mean you shouldn't do it. And it doesn't mean you shouldn't do it.
Even before you are fully utilized as a coach. So the reasons why you might find having associate coaches are beneficial for you and your business are quite varied. So. Let's think of a few reasons why you might want to have associate coaches. You might want to take an extended break and having someone who you can get to take on your new coaches with your existing clients for a period of time would be really helpful, but you still want to retain those client relationships.
So that's one reason [00:05:00] you might want to offer your clients a choice of coaches. Or your clients might be demanding that, right? They might be saying, Hey, you know, who have you got for us? Who can do this? Or do you know someone who can do that? And they might either be saying it explicitly or implicitly through, through, you know, how they speak to you.
So it might be clear that, you know, they, they, you know, They don't want one person coaching a whole team, for example, and that's totally, totally reasonable. An example of this is that you might be coaching at one level in an organization, but there is an opportunity to coach at another level. And it would be a conflict for you to coach multiple levels within direct reporting lines.
Now. I'm not saying that that is a black and white, but that is generally accepted as a, a boundary that we don't coach both a manager and a direct report at once unless there are, there are some circumstances and it requires a lot of very carefully careful contracting and [00:06:00] transparency. So that's a time when you might bring someone else in and you might want to.
Be able to grow your business, right? You might want to scale, but you only have so much time. And so long as it's you selling your time, there's going to be a limit to how much you can do in terms of growth. And so you may wish to bring associates in. So all of these are great reasons to bring on associates.
But it isn't as simple as just saying, okay, here, here's another coach away we go. So I'm going to share a few things that you need to think about before you dive into this process. So it's a little bit, this is a little bit of a, what to think about. It's a little bit of a guide to how to do it. But I wanted to capture my thoughts and my experiences on this in case it was helpful.
So, the first thing you need to think about is your business model. Now, this is less relevant if you aren't using this as a way to scale your business, but your strategy for what you pay your coaches versus what you charge your clients [00:07:00] is really important on a few levels. Because what you pay your coaches is going to dictate what sorts of coaches will be willing to work with you.
And you need to be aware that if you aren't making a healthy margin, it can quickly be unsustainable to have associate coaches, because you may be doing. All this business development work to get new clients in the door, but you may make very little profit when you factor in all the costs like assessments and the cost of paying a coach.
So if you look around in the, in the market, there are some different models that coaching companies use, and I'm not saying that any of them are right or wrong, just that you need to be very mindful and you should know what your options are. So the big coaching platforms, they pay a pretty standard rate to their coaches.
And that rate is generally accepted to be quite low. So they [00:08:00] have high volume and they take high margins. But they are fueling a big corporate machine. They have got a lot of employees, so they need those high profits in order to be sustainable. Because you are a smaller organization, you have a little more flexibility here.
You also have people bringing on associates and then another, the second model really is when people intend to basically hand the work over to another coach. They just want to keep hold of that client relationship. They want to continue to own the client relationship. So they will pay the bulk of the coaching fee to the associate coach.
So something like 70 or 80%. And this is good. If that associate coach is really doing you a favor you know, you need them to, to hold the fort for you, things like that, but it is not a sustainable model if you want that to be a profitable part of your business. So the majority of you know, the small to [00:09:00] medium sized coaching businesses who might have, you know, one to 20 associate coaches.
And you know, for me, I've, I've been anywhere between having three and 20 associates in, in my various businesses. Often in these businesses, the owners of the business continue to do a lot of the coaching work themselves. And they add associates in to allow them to expand the work that they do with their clients, to be stickier in their clients, if you like, because they have more more coaches who can do work.
They can take. They, their associates might take on the work that these business owners don't have bandwidth for, or don't want to do. And it allows their business to grow. Now, this is where the business model can be difficult because once you have a higher level of cost in your business, like when you start adding support staff, when you start adding tech platforms, which you do when your business grows from that sort of to that small medium bracket It's hard to make associate [00:10:00] coaches profitable in this place.
So in my opinion, and I'm really open to people debating me on this you can't be that sustainable if you are paying your coaches more than about 50 percent of what you're charging your clients. And so generally that means that you need to be charging premium prices to your clients before you can afford to bring on coaches.
Because for me. It's really important that I pay my coaches very, very well. And I usually pay my associate coaches about triple what the coaching platforms are paying. And that is usually about 50 percent of, of what I charge the clients. Now, this is important to me. I think As a small business, I have to get, I want to get great coaches to represent me.
I want the best coaches for my clients. And so that means I have to pay above, above the going rate. And [00:11:00] so then, you know, then the other model that, that people might think about is if you don't want to do any coaching work, right. And you want to just have associate coaches and you want your business to be purely associate coach driven.
Then I think your percentage needs to shift again, because you need to have more margin to cover the extra work that you're doing in sales and business development and potentially again, the backend stuff. So once you have your business model loosely planned, then you, the next step is to actually find some associate coaches and my favorite way to, to start this, or even now, if I'm, if I'm getting associate bringing associate coaches on board.
Is to work with coaches that you know, and you respect. So most independent coaches are willing to do associate work for the right price. So you should always ask if there is a coach that you respect and would love to work with. If you don't have anyone that comes to mind, then you need to go out there and find [00:12:00] people.
And look, personally, I've never gone down the path of advertising. I think you would end up swamped. With applications that may not be what you're looking for. So what I would do is I would tap into my coach networks and I would ask for recommendations or referrals of great coaches open to working on an associate basis.
And there are a lot of great coaches out there. And this is, this is why it can work. There are a lot of great coaches who hate doing sales and business development. So you won't find it too hard to find great coaches who want to do the work. If you're willing to do the business development and they reckon recognize that, that they're, you know, they will take a haircut, not to have to do that.
So once you have someone in mind and you're considering bringing them into your, into your business as an associate coach, you do need to interview them. Now it isn't the same as a typical interview in my experience, but it is a, a best attempt at getting a sense for how they show up [00:13:00] as a coach. Now some organizations will get you to do a coaching session.
And, and I think that that can be a, a great thing to do. Okay. But because I usually bring on people who I have a lot of references for, I know the clients they've worked with. I know coaches who know them. Well, I tend to mostly have a conversation and in my coach interview conversations, I'm listening, not just to what they say.
But I'm also listening to what they don't say, how they interact, how they show up things like, you know, what is the quality of their listening? What questions are they asking? Are they demonstrating curiosity? I will ask them questions too. Of course, I like to know the quality of their training. So I'll ask them a lot about that and what that experience was like for them.
I'm generally looking for coaches who are continuing to learn and develop. So I'm listening for that. I'll also ask them to tell me about their coaching [00:14:00] style and the perspectives that they bring to their coaching. Now, I don't necessarily care what they are like. Lots of coaches bring lots of different frameworks, but I want to hear a certain level of sophistication in their ability to articulate those perspectives because my clients are generally pretty switched on and a coach who can meet them where they're at is really important.
So. I want to get a sort of a general sense of alignment with the way I do things. And a sense that they can operate at quite a sophisticated level. And I also always ask how they like to work with coaching organizations. And if they have done that sort of work before, what works and what doesn't, because actually the relationship.
With your coaches is going to be the single biggest predictor of, of whether you have a successful engagement. And, and, you know, so one thing that's really important to me when I'm hiring associate coaches is to get people that are reliable and also not [00:15:00] too high maintenance. Now, That might sound bad, but what that means is that generally my relationship with my associates is that they are experts at coaching.
I will not be micromanaging them. There will be none of that. All I will do is check in on the progress of sessions, any issues that are arising, and that is what I'm reporting back to the client. So if I have to be hassling the coach to arrange things, if I'm worried about whether they're organized or on top of it, that is too much work for me, and that won't be a good fit.
So my coaches generally are much more organized than me and they are people that I feel proud and relaxed to put in front of any of my clients. You know, I, I always joke that, you know, I hire associate coaches who are better coaches than me. You know, it's a joke, but it's, but it's also not a joke, if you know what I mean.
So, you know, I'm really, it's, it's like being, I don't want to be the smartest person in the room. I don't want to be the smartest, the best coach on my coaching panel. [00:16:00] So I love bringing coaches who, who can, can teach me things as well. So. You know, when I've been an associate coach, that's always what I've aimed to be.
Also, I want to be easy to work with. I want to you know, represent the coaching company, you know, as, as to the best I can. I should also say that it tends to work better in the early days to have a small group of associates that you can give more work to at least in the beginning, but potentially all the way through.
So. You might have had the experience of being an associate where you get blasted onto a website, but you actually don't get any work from them because they've got 50 associates, but they don't have that much work. Now it can look good and it can look impressive for a company to present as though they have a huge team.
But in the early days, keep it small. I think people can see through that to some degree. And the problem with bringing on a lot of associate coaches is that you are going to overwhelm yourself with [00:17:00] administrative work for no real extra reward. So the good thing is that bringing on associates is a process that you can dip your toe in.
You can try it out, try it out with one or two coaches. And that is what I suggest you do in order to start. Now, once you have your small but perfect team of associate coaches, your processes and your systems become super important because it is no longer just you. Now, I could talk for hours about this.
The people who are in my program know that sometimes I do talk for hours about this, but here are some of the things you should consider. When you are setting up your processes to have associate coaches, first and foremost, compliance, does your insurance cover the work that associate coaches do for you?
That needs to be sorted out. Do you have a contractor agreement? That you can then apply to your coaches and why would you, you wouldn't have one yet, but so you need to go and get one. You need to set up a subcontracting agreement that [00:18:00] you can get your coaches to sign. Now you can buy these you can buy templates.
You can get a lawyer to draft them for you. You could potentially use a template that someone shared with you but do it. You, you need to have it in place and don't just use what someone gives you right away. Read through it and make sure it actually accords with what you want. That's really important.
You also need to get documentation in place. And that means things like you need to get their bio and get it branded in, in your style. So it matches your, your brand guidelines. And then you also need to have a very clear process of how you will engage them. And so you know, I've worked through this for many years and our process is.
We get an opportunity from a client. I think about which coach or coaches would be best suited to the opportunity. I check in with them and I check about their [00:19:00] availability, availability and their willingness to do this work. And that includes letting them know. What I think would be included and the fees that I, I think would be, would be, would be payable to them.
Then I send through a proposal and the profile of the coach to the client. Then we arrange any chemistry or introduction introduction sessions that would be required. We confirm an agreement to proceed. We send the associate a statement of work that summarizes exactly the inclusions and the the fees that would be paid.
Then we can make official kickoff and introductions. We can invoice the client, we pay the associate, and we go through a process of regular check check ins and follow ups. That is a lot now that I think about it. You also need to think about how you brief your coach on the opportunity, because typically you will have, you know, a good amount of, of information from the client about what, what the coaching need is.
And you [00:20:00] also need to think about how available you will be to your coaching, your coaches, your associate coaches, if they have any questions or concerns during their engagement. Now. All of my coaches, coach, coaches why, why don't we, coaches and coaches is quite difficult. So all of my associate coaches are highly skilled and have their own supervisors, but sometimes we do some informal supervision as things pop up along the way.
And particularly if I have some organizational knowledge of the client, we might do you know, ad hoc conversations. And I'm always really happy to do that because I want to set my coaches up for success. There are a few things to be aware of when you bring on associate coaches, and probably the most immediately relevant one is payment terms.
So you need to decide whether your terms will be that you pay your associate coach only once you [00:21:00] are paid by the client, or if you will pay at, you know, defined intervals. Now it is generally considered. Unreasonable to make the coach wait for you to get paid when they are actively doing the work. So you might need to have a cash buffer so you can pay your associate coach even when the client doesn't pay on time.
And so the most important thing is to be transparent because if you can't pay them up front, then you need to be clear and tell them that they will get paid once you get paid. And, and some coaching organizations do this and we have done that in, in some scenarios. But generally you know, and, and you can say that that is the terms and then the coach has the right to refuse to, to, to proceed on that basis.
And I've had that too, right? So if cashflow is tight, sometimes what you'll say is I'll pay the coach 50 percent up front and 50 percent at the midpoint of the engagement. And then, you know, usually your client will pay [00:22:00] you sometime between those. So you've fronted 50 percent of the coach payment. And then the second 50 percent will be payable once you've already been paid.
So another thing to be aware of is that regardless of how good your coach is, you as the, the client relationship owner, you need to be across the progress of the coaching. And so where things get difficult, and I have had all of these experiences is when you get a call or an email from the client saying, How come you didn't tell me that this session didn't take place?
Or how come you didn't tell me that sessions have stalled and that, that this coachee is not attending things, or, you know, I've heard this. And, and when you don't know what is actually going on, it can be very awkward. Now it's not an emergency. You can just say, Hey, let me check in on that. And you get in touch with your coach and you find out what's going on, but it is even better.
If you are having regular check [00:23:00] ins every few months to see how things are going, or if you have a portal where your coach can record you know, proposed dates, book sessions so that you can just at any moment to say, Oh, okay, let me see, let me see where they're up to and reply. Because invariably, if you don't know those things, it will be super stressful because it'll feel like the client is, is, you know, accusing you.
Of not having informed them of something, something relevant. So knowing what's going on is very helpful. And I think that's because clients generally really want a heads up if there is an issue with their coaches engagement. And when there is a degree of separation between you and the coach, which is your associate coach you won't always know this, but you need to.
And, and so it might be that you just agree with your coach. What sort of scenarios will be in place where they might give you an alert, right? So you might say, if they reschedule more than once, or [00:24:00] if they don't show up to a session, just let me know. So I'm in the loop. And related to this is before you dive in, I think you just need to know.
That there are going to be difficult situations that emerge. And this is probably the case, whether or not you have associate coaches, but there will be times when things are going to be tough and you have to put out fires. And that will be things like coaches will pull out of an engagement. When the coachee had already met them and wanted to proceed clients won't pay you on time.
So you end up with cashflow issues. Coachees will go AWOL and the client might want a refund for unused sessions, but you've already paid the coach, right? You'll have to normalize that these sorts of customer service challenges are going to come up. It's going to be awkward and you will be entering a world with much more complexity.
And that is the cost that comes with the gains that you hope to achieve. So you need to realize that you're adding, I guess, a [00:25:00] different hat to your business ownership, which is, you know, the lens of being truly a, a leader, a CEO, and almost The customer service point rather than the hands on doer of the work.
And, and that just has different layers of complexity. And obviously there are plenty of things you can do to help you out there, you know, whether it's hiring someone or using AI to help you draft emails, all sorts of things you can do. Now, I really hope that this has been interesting to you. If you are thinking about bringing on associate coaches, just drop me a line, drop me an email, let me know how this landed with you.
Or even if you want to do more work as an associate coach yourself, I hope that this has been insightful, a bit of a look under the, you know, under the hood of, of what coaching companies think about when they bring on associate coaches. Now, last week I mentioned that you know, I mentioned my free pricing masterclass and [00:26:00] it has been so popular.
We've had over 200 people sign up to check it out. So if you haven't already done so, please do. It is a class that is full of my strategies for how to increase your prices as an associate coach specifically. It is how, if you are wanting to increase your revenue ensure your business is sustainable, get more clients.
Through having a great pricing strategy. And so I guess, I guess live a more flexible life. You know, it's all about how you can do that by having great pricing strategies. So if you are keen, head over to www. elliescarf.com/classprice. And I'll make sure that I put that link in the show notes too.
If you want to check it out, I'd love to, I'd love to have you join us. So have a wonderful week. I hope it's I hope it's full of new clients, great work and, you know, taking breaks when needed. That's what I think I'd like for this week. So have a good one and I'll talk to you again next week.
[00:27:00] Thanks for listening to this episode of the business of executive coaching. If you found it helpful, please share it with a colleague or friend on LinkedIn. And don't forget to tag me so I can say thanks. I would be tremendously grateful also if you would leave a review on Apple podcasts. More reviews means more people can find us.
This episode was brought to you by the Impact Coach Collective, where executive coaches grow their businesses in a community of peers with business education, mentoring, deal clinics, and more. If you'd like to contact me or work with me further, all my free resources, courses, and more info on the Impact Coach Collective can be found at elliescarf.com. Have a brilliant week, and I look forward to talking to you again soon.
