The ROI of a Business Coaching Franchise [CASE STUDY]
If you didn’t know, business coaching can be one of the most lucrative jobs out there. About 20% of the 10,000 registered coaches earn six figure incomes, according to approximations from industry experts. Not only do you get a highly flexible work schedule (bonus!), you also get a nice pay cheque at the end of it. Did you know that the total annual revenue from coaching in Oceania is around $154millionUSD. There’s a huge market just waiting for your knowledge and expertise.
Once you’ve decided that business coaching is right for you, the next question most people ask is: should I start my own business? Or should I buy into a franchise?
Chances are, you have the passion and vision, and you want to make a business out of it. The problem is, so many small business owners end up working in the business and not on it.
In this article, we are going to explore the benefits of investing into a franchise. A lot of people can initially be scared off by the initial start-up costs, and we understand that. The truth of the matter is that the potential income and profit from a successful business coaching franchise far outweighs the initial start-up costs.
The advantages of buying a franchise
Before we delve into the ROI of a business coaching franchise, let’s talk through the advantages of buying into any kind of franchise.
1. The franchise is already successful
The great thing about investing in a franchise is that the company you’re buying into has already created a successful business that produces results. Otherwise, they wouldn’t be offering you a buy-in. They’re also required to provide you with a whole lot of information about their company, so you can verify results before deciding whether or not you want in.
2. People know the brand
Good branding is vital in any business, and one of the biggest advantages of buying a franchise is that your potential customers most likely already know the brand. And, a brand of regional or national status is generally highly valued by consumers.
3. They have training programs
You may have countless years of experience in your field, but do you know how to run a business? A good franchising company will have a training program to teach you the most successful methods to run your own business.
4. You receive ongoing support
It’s hard to build a business alone, which is why franchising companies have staff specifically dedicated to provide you with ongoing support. If you ever hit a rough patch or need a sounding board, you’ll always have access to an experienced and supportive team to help you build and run your business.
What are the potential profits and ROI?
Now that we know the amazing advantages of buying a franchise, let’s get into the figures.
Average Revenue for Year One = $100,000, *net margin = 62.4%
Average Revenue for Year Two = $210,000, *net margin = 75.8%
Average annual revenue, lifetime = $258,000, *net margin = 75%
* Net Margin is after Standard Loan repayments and Franchise support payments.
Hourly Rates: Programs are via monthly retainer rather than hourly rate however rates can be calculated at between $275 and $550 /hour
ActionCOACH case study 1
ActionCOACH Business Coach Steve Leach, based in Queensland, Australia, is more than just a well-seasoned ActionCOACH—he is the first ActionCOACH ever, and still practices 22 years later. His experience begins with what he refers to as the “ActionCOACH Ice Ages.” Prior to becoming an ubër-successful franchise, ActionCOACH, founded by Brad Sugars in 1997, had advertised for business coaching positions. They were looking for “people with passion and heart,” to join the firm as employees. When Leach, among a crowd of three hundred applicants, saw the crowd slowly dwindle with each group interview, he ended up one of ten hired for a coaching position. ActionCOACH began to sell franchises the following year.
“Brad didn’t just start a business,” Leach said, “He started an industry. Business coaching really didn’t exist. You might have a consultant here or there—or a mentor, someone who would take you under their wing, but Brad really pioneered the idea of business and executive coaching as a lucrative, viable business.” Indeed, ActionCOACH now boasts approximately 1,000 franchisees in 62 countries worldwide.
When asked why people should consider becoming an ActionCOACH franchisee, Leach explains that he believes every successful business should have a coach, just as most businesses have accountants. “I believe within the next ten years, a business coach will be just a necessary as an accountant for all companies, large and small,” he said.
Leach, relaxed and leaning back in his chair in the two-story library of his office, revealed that besides helping people, the fact that he has amassed great wealth and built the lifestyle he and his wife, Melissa, have always wanted, working just three and a half days per week is why he is ecstatic about becoming an ActionCOACH. With a very satisfied smile on his face, he boasted, “I haven’t worked a Friday in a decade!”
Leach’s background began with a dangerous job in counterterrorism in the Australian Army in the early 1990’s, then became a photojournalist after being injured, and finally becoming a typist for the army. Learning to type gave Leach a special knack for being able to quickly digitize a multitude of important government documents.
Finally, Leach became a founding member of the ActionCOACH business consulting team, being the first ActionCOACH to be inducted into the Global Hall of Fame. He says he has amassed enough wealth to retire anytime, though he is not planning to do so in the near future. “But this is it for me,” he said, “After ActionCOACH, I really don’t need to work again. I’m a multi-millionaire. I make a lot of money coaching, and then give to my wife to invest in properties.”
Leach is also one of the few “Master Coaches,” ActionCOACH franchisees, which means half of his business comes from training new ActionCOACH franchisees, and half comes from coaching business owners and executives. In all, Leach said he has spent 6,200 hours on stage giving seminars, and has had over 600 clients during his tenure with ActionCOACH. Currently, he keeps his clientele to approximately twenty at one time—still sticking to that three-and-half-day workweek to spend time with his wife and three teenage children.
“The ActionCOACH environment allows you to have the lifestyle you want,” Leach said, pointedly, “If you want to build mobile bikes (a hobby of Leach’s), travel, and have fun, definitely look into becoming an ActionCOACH franchisee.”
ActionCOACH case study 2
North Carolina-based ActionCOACH franchisee, Mary Ann Hauser is a living testimony that with ActionCOACH franchisees, the “coaching of the coach” never ends. This is one of many things that truly sets ActionCOACH apart from other business or executive coaching franchises.
When Hauser worked as a successful executive in the pharmaceutical industry, she became a casualty of the company’s redesign process. As she searched for a similar position in the pharmaceutical industry, she realized she would either have to uproot her family and/or travel extensively.
“I refused to move my family. My son was in junior high school, and I just wasn’t going to move,” she said. Then, she didn’t find ActionCOACH, ActionCOACH found her. Master Licensee, Steve Brock, saw her resume online and felt she would be a great candidate to be an ActionCOACH business coach.
“I did my homework for about two months, read everything about ActionCOACH, the good and bad, and spent hours on the phone with Steve. He put me completely at ease about any of the negative stuff that you always see about successful companies, and I was excited to become part of this franchise,” She said. “Everything I looked at spoke to me and said, ‘ActionCOACH!’”
Hauser’s favorite coaching success story since she became a franchisee in 2010 is helping a young married couple fulfill their dream to travel the world while running a virtual business. She explained that the wife had an online furniture business that just didn’t work. Hauser tried to help her make it succeed by getting other suppliers, but, as a coach, she realized the business wasn’t going to be viable. Hauser was actually able to help the couple sell the business. “It was only a few thousand dollars,” Hauser said, “but they didn’t think they would get anything.” As for the husband, Hauser advised that the couple would have to save enough money via the husband’s employment before he could quit his job and fulfill their dream lifestyle. In the meantime, Hauser helped the wife build a completely virtual creative agency the couple could manage from anywhere.
“One year after the date we set the goal, they got on a plane to Croatia, then Italy, and then I think they went to Greece, with the online creative agency having generated around $1 million in revenue,” she said. Several years later, her clients are still living the dream, and the business she helped them start is still growing.
One thing that makes Hauser a successful business coach is that, as an ActionCOACH franchisee, the learning never stops. Her advice to new or potential ActionCOACH franchisees is to go to every seminar, get on the forum, and read everything. She, herself, recently felt she needed to brush-up on her skills, so she enlisted the help of a senior ActionCOACH business coach. “Last year, my goal was to double my business, and I achieved that after my ‘reboot camp,’” said Hauser. “This year, my goal is to double that, and I have just about done it.”
Finally, Hauser quoted ActionCOACH founder and chairman, Brad Sugars, “’If you stop learning, you stop earning,’” and having that ActionCOACH support and continuous reeducation has helped Hauser be and stay successful helping other business owners thrive. “I just love it,” she said, “I’ve always been known to be the kind of person to help people, and this is just so fulfilling for me.”