How to Start a Financial Coaching Business

Research done by Ramsey Solutions shows nearly half (49%) of Americans say their mental health has been negatively impacted by their finances. That means there are way too many people out there who don’t have hope because they don’t know what to do about their money problems.

Starting a financial coaching business of your own means you can be part of the solution.

You can bring the hope and guidance people need to start living their lives the way they’ve always wanted.

And there’s never been a better time than now. If you’ve ever considered being a financial coach—aka a trained guide who helps clients change their money habits to ultimately set (and crush) their money goals—this quick how-to will walk you through the steps it takes to start your own financial coaching business.

How to Start a Financial Coaching Business in 9 Steps

1. Determine your why.

Your why is your purpose—your reason for doing what you do—so you have to start here. Your why carries you through tough stuff and keeps you going when things get hard.

And since helping people win with their money can definitely be hard sometimes, your why must be something you really believe in.

2. Get trained as a financial coach.

If you want to become a coach, you’ll need training! The best financial coach training offers:

• Curriculum that trains you in coaching’s best practices
• Real-world methods and strategies taught by actual coaches
• A rundown of the myths and truths of financial coaching
• Support and guidance as you learn
• Ongoing support and community after you graduate (including access to leads!)

Here at Ramsey, we should know—we’ve been training financial coaches for decades. (We’ll dive deeper into that in a bit.)

3. Name your business.

You can name your coaching business (pretty much) anything you want. If you use your name and the words Financial Coaching (or something pretty close), you’re creating immediate clarity. Who are you? What do you offer? Boom—right there in your business name!

Now, could you name your business after your favorite flavor of ice cream? Sure. But then you’ll be explaining that all the time and possibly creating cravings instead of clients.

If you’re going to launch a financial coaching business, it’s better to keep it simple, direct and professional. You’re the person who’s going to help people, so let the name of your business reflect that.

4. Choose your business entity and get a license.

“Business entity” may sound a little snooty (or boring), but it just refers to the legal structure you decide to use (which is mostly handy for the government).

A business license can cost anywhere from $50–500 depending on where you live, and it’s a necessary investment.¹ Just search how to get a business license in your state to see exactly what you need to make this happen.

As far as picking a business entity goes, these are your four main options:

• Sole Proprietorship: This is the simplest solution. You’ll report your business’ income on your personal tax return. It's a great option if your business is simple and low risk. 
• Partnership: Since this type of entity is for a business you create and run by sharing liability and responsibility with others, there’s more risk—and less flexibility—from the get-go. For lots of reasons, it’s not the best fit for most coaches.
• Limited Liability Company (LLC): You may choose to form your practice as an LLC if you have a boatload of assets you want to protect and keep separate. You may also choose this structure if your business is particularly high-risk (like running a school for fireworks technicians or blimp pilots).
• C-Corporation and S-Corporation: Both of these are more advanced structures that best serve well-established companies. If you’re planning to scale significantly in the future, you may benefit from a conversation with a tax pro about the best time to go this route. 

5. Open a business checking account.

Once you’ve picked a legal business structure, you’ll want to open a checking account specifically for your business. Keeping your personal finances separate from your business finances makes bookkeeping a lot easier, helps you avoid blurring the lines of business and personal expenses, and means less stress during tax season.

6. Prep now for business taxes.

Speaking of taxes (specifically small business taxes), you need to leave room in your business budget for both income tax and your self-employment tax (which covers Medicare and social security). Go ahead and set aside 25–30% of your gross income so you won’t be ambushed by a huge bill come tax season.

Lead others to financial peace! We will show you how. Click here.

Here's a heads up: If you expect to owe at least $1,000 in taxes from your self-employment income, then you'll be required by the IRS to make quarterly estimated tax payments.

7. Set your hours and prices.

A flexible schedule is a huge draw for lots of coaches launching their own practices. The flip side is that you need to be realistic about what’s best for your business (and your clients).

Most new coaches work part time, coaching on evenings and weekends as they build the momentum they need to go full time. But you’ll need to balance your desire to serve with your need to establish healthy boundaries.

A big part of that is making sure you’re charging what you’re worth as a coach. Your practice needs to make enough money to sustain itself. And it’s your job to make sure what you’re bringing in is enough, not just to keep the lights on but to grow your practice—and help more people. 

8. Find your first client.

You’ll find prospects all around you. They’re people who shop with you, handcraft your latte with love, or cheer alongside you at the game. The fact that so many people struggle with their money goals means your potential clients are everywhere—and they could be one conversation away from working with you.

You might be thinking, “I don’t do totally random conversations with strangers!” Don’t freak out. The best coach training teaches you everything you need to know about having conversations that create clients.

9. Grow your coaching practice.

Growing a thriving coaching practice requires everything we’ve already talked about here: a solid why, great training, smart and timely admin decisions, and connections with your fellow coaches and trusted referral partners.

Listen, this is where it gets exciting! If you’ve been looking for work that matters, this is it. Coaching is a noble profession, and it is hugely fulfilling to unlock life-change for people who need help. As it turns out, we have a great example of that coming right up.

A Financial Coaching Business Success Story

It wasn’t even two decades ago when Mathew Paul found himself down to his last $20. He came to the United States from India seeking opportunity. He spent his nights sleeping on a mattress he’d pulled from a dumpster while working his way through graduate school.

He walked all the steps above, beginning his journey with Financial Peace University, where he learned how to get out of debt and take control of his money. Then he decided he wanted to help others do the same. So, he became a coach through Financial Coach Master Training.

His tiny financial coaching business grew more by word of mouth than anything else, at least at first. One happy client led to more happy clients, which led to more opportunities for growth. Mathew hired pros or bartered with vendors when he could—and was eventually able to rent office space and improve his marketing.

Today, Mathew is a full-time Ramsey Preferred Coach. His business recently crossed the $2 million milestone for all-time revenue, and his clients have paid off more than $14 million in debt. He says, “It all started with $20 in my pocket 24 years back.”

Isn’t it amazing what a little resource, awesome training and a really solid why can do?

Start Your Own Financial Coaching Business Today

If you're still wondering how to start a financial coaching business, remember the nine steps we talked about above. Step one: Have a good why (like Mathew and so many other great coaches). And the very next step is to get the best training out there.

Financial Coach Master Training is a cutting-edge training program that gives you a dynamic, interactive, front-row seat to coaching’s best practices. Plus, you’ll learn from the best in the business—Ramsey Solutions.

Financial Coach Master Training comes packed with powerful, practical tools to help you launch your coaching practice:

• Don’t just learn about coaching, put it into practice as you go with a curriculum purposely built to get you coaching right away.
• Learn real-world coaching techniques in live, interactive development calls with our senior Ramsey coaches.
• Get access to 30 years of learnings, resources and world-class coaching content through Ramsey Solutions.

There’s so much more, and you can start right now! Get the training and support you need with Financial Coach Master Training and begin building your very own successful coaching practice today.