Part 3: A Different Business Model

The business model for a therapy practice has two main aspects: Service Delivery and Client Accounts. Service Delivery for therapists is based on the “medical model” of mental health and requires a diagnosis, a treatment plan that addresses “symptoms,” and then a series of therapy sessions to decrease or eliminate the symptoms. Clients schedule 45-minute full sessions, 25-minute half sessions, or an extended initial session. That’s it for options, and it’s easy to understand.

Life coaches have much more freedom in defining their service. But that freedom means a lot of decisions have to be made. Some coaches offer 45-minute phone consultations and some prefer 25-minute focused sessions. Some have teleseminars to teach groups by phone, and some offer live training. A coach can put together a package of workbooks, e-mail support, group coaching, and teleseminars and charge one fee for the whole thing. A person entering this field can be easily overwhelmed deciding what to offer. I’ve been struggling with that myself.

The second part of the business model for therapists is Client Accounts, but most therapists don’t have to deal with business operations. They work for a practice or agency that pays them a salary, a flat fee per session, or a percentage of money collected.

Life coaches are nearly always in a solo practice, so they have to learn to manage Client Accounts. They usually set up a credit card merchant account for clients to pay for sessions, workbooks, e-books, or teleseminars. For a therapist who owns her practice and already manages or oversees Client Accounts, it’s not that different. For the small number of practice owners who refuse to be on health care panels and don’t deal with insurance claims, it’s nearly identical.

But for a therapist working as an employee or an independent contractor there is a huge difference. There is no agency to hire a life coach for a salary and set up his appointments. There is no large practice with referrals waiting to sub-contract with a life coach and pay her a percentage of money collected. There is no group to join where referrals come in, new clients appear, and other people collect the money. For a person unaccustomed to handling business operations this part of self-employment can be strange and scary.

There is another major reason therapists can find it hard to start a coaching practice. In my next post, A Different Marketing Method, I will explain the comfort zone of therapists when it comes to marketing and networking and why the life coach marketing model frightens off therapists.

May You Find Your Calling and the Courage to Follow It,

Steve Coxsey