Economics of Coaching 101

Over the past few weeks I have received a number of emails from coaches and trainers worldwide wanting to know what are the keys to operating a succussful sports performance business. And before providing my opinion, I think it is important to first take a look at the bigger picture of business.

Just turn on your television to any station or pick up any newspaper and you will quickly find out that we are in a troubled economy. In fact, chances are that your own bank account is feeling the heat if you are even brave enough to take a look.

And just what is it all based upon? The Law of Scarcity, the Law of Supply and Demand, the Principle of Values, and the Principle of Influence. After over fifteen years of coaching , I believe these same four components apply to running a successful coaching business as well.

The image below represents each of the key success factors needed to sustain a competitive advantage:

1. Financial Capital (money, tangible assets)
2. Social Capital (trust, relationships, network)
3. Human Capital (skills, knowledge, education)
4. Experience Capital (variety, exposure)
5. Values Capital (self-esteem, self-identity)

Lacking in any one of these areas can keep you from operating a successful coaching practice. In fact, name two or three of your biggest competitors and list in which of these five areas are they the strongest and in which of these areas do they struggle the most. Next, perform the same exercise with your own coaching practice.

Over the next few posts I will go into greater detail in each of these areas.