Professional Transitions: How to Finance Your FreedomKnowing that financial security is a top concern, what can we do to mitigate the risk of shifting from a stable 9-to-5 to the wild, freelance world of coaching? How do we stay in the 19% of gym owners who stay open past the first year and make a successful living?
Professional Transitions (Part 3): How to Finance Your Freedom
By: CJ Gotcher with Adam Skillin
Although you may feel uncertain about your skills in platforming or platform coaching right now, they likely won’t be your biggest challenge. More likely than not, what’ll keep you awake at night and gray your hair is figuring out how to stay afloat long enough to develop the skills and learn the lessons you need.
Simply put, money matters. Just like a patron frees the artist to pursue their craft, income frees the coach to coach.
Knowing that financial security is a top concern, what can we do to mitigate the risk of shifting from a stable 9-to-5 to the wild, freelance world of coaching? How do we stay in the 19% of gym owners who stay open past the first year and make a successful living?
• Keep Overhead Low: In business, “overhead” is what it costs for you to stay open. As a solo professional, your personal expenses are your overhead. Be thoughtful, keep them reasonable, and you’ll be able to meet those expenses with fewer clients, helping you kickstart your transition earlier and on a more stable footing.
Think outside the box here, as well. If 81% of small studio owners failed in the first year before COVID, do you need to start with a gym, complete with a lease and utilities? Can you begin as an employee, coach out of your garage, rent space from another facility, or share the costs with other coaches?
• Don’t Go into Debt to Coach: Expensive business coaches and college programs are appealing to those looking to make the leap, but unless you can afford them at your current income or with grants and scholarships, don’t bother for your first step. Even good college programs and sincere business coaches can’t guarantee success, and debt is a crippling overhead cost. Stay under your current earnings, or start with one to three steady clients, and use that revenue to save or start your education.
• Know Your Number: Know what you need. Jonathan Goodman popularized the idea of the Freedom Number, and it’s a good exercise. Find out what you need to cover your “life overhead,” subtract steady income you’ll continue earning as you coach, and you know the minimum you have to make to meet your needs. This knowledge brings clarity to the ambiguous question: “How will I know when I’m ready?”
• Mind the Gap: The biggest financial mistake transitioning professionals make planning their finances is failing to consider lost benefits. Taxes are being pulled from your paycheck automatically, and you might be getting health insurance, retirement savings, paid leave, or other benefits from your employer. You’ll have to manage those independently when you’re earning as a coach. In making the switch, identify these costs (especially taxes), factor them into your freedom number calculation, and consider adding a 10% buffer for unexpected gaps.
• Take Steps, Not Leaps: Although some coaches manage the wild leap into a new career by living on savings, Top-Ramen, and hope, there are often other options. Maybe you can reduce hours on your day job or go from full-time to part-time, so you need fewer starting clients. Maybe you limit your first coaching to technique sessions on the weekends while you get your footing.
Even if you think that you have the money and time to take a wild leap and pick up thirty online coaching clients or open a 1200 square-foot studio space, it’s usually the better choice not to if you’re going it alone. Unexpected startup costs, in both time and money, are often much greater than it takes to sustain the business once it’s already going. You don’t want to be completely overwhelmed at the start when you’re trying to build your reputation, systems, and business model.
A Coach with a Mind for Numbers
I hate to blow his cover, but for years, Coach Adam Skillin was basically Superman. A mild-mannered manager at a bank’s home equity department by day and a submission-grappling barbell lifter by night, Adam was ridding the world of weakness one choke-hold at a time.
But after coaching for free out of a jerry-rigged lifting space in his condo, then getting certified as a coach and getting paid for it, he recognized the potential to leave his 9-to-5 and be a full-time superhero—if he managed the transition well. Adam was uniquely suited for this kind of planning—“My wife says my brain’s structured in spreadsheets”—and he provides an excellent example of how to make the transition work while staying financially stable.
First, he and his wife identified their family income and mapped out what he would need to earn—factoring in taxes and benefits—to meet their needs. He had some clients, but he was limited by his work hours and knew the value in diverse types of income, so he started coaching online with BLOC in 2016.
Like many coaches who start down this path, he went through a rough phase where managing his day job, family life, growing online client base, and in-person coaching was, in his own words, like “working two full-time jobs.
But he was able to keep going because he had clarity on the finish line. Because he knew what he needed to earn, kept expenses low, and ramped up his coaching in stages, Adam could see the day approaching when he’d hit his target and quit his day job.
Adam retired August 1st, 2018.
In the process, he bought himself the flexibility to choose his schedule, take vacations with his wife, and take on work because he wants to, not because he needs to. Regardless of how many “figures” you earn or what milestone you reach, that’s financial freedom, and it’s possible with care and some smart forward-planning.