So, you want to be a coach? Or maybe you’ve already started helping people and want to turn it into a business?
Coaching seems like a modern phenomenon but in reality, we have always had business consultants and we’ve had therapists and lifestyle gurus. However, with the cultural focus shifting to a better more balanced work and lifestyle, as well as a more diverse range of the population finding entrepreneurialism is accessible to them, an arena has opened up for professional and personal advisory services and coaching businesses have been successfully filling this space.
There is a hunger amongst professionals, business owners and freelancers for coaching that aims to assist clients in building their businesses/careers whilst staying true to their values and taking their lifestyle aspirations into account. I’ve seen this firsthand - as a business owner myself involved in various networking groups, I know many people who have benefited from lifestyle and business coaching. I also know many people who have launched coaching businesses and found themselves busy and buzzing with fulfilling work. Coaching businesses are making a real difference to entrepreneurs and professionals. Due to the holistic approach to lifestyle and work, this is really positive for mental health and it’s ultimately good for the economy, because good coaches elevate and support business leaders, helping them to grow and ensure their success is sustainable.
This is why I’m so passionate about working with and advising coaches. Hence, this legal guide to setting up a coaching business.
Starting A Coaching Business - The Legal Low-Down
I want coaches to succeed and be able to focus on what they do best, providing essential advice and coaching, but too many great businesses make mistakes when setting up that can leave them vulnerable. When you’re setting up a coaching business, you’ll need to:
Register your business with Companies House or set up as a sole trader with the HMRC
Open A Business Bank Account
Register a trade mark (if you wish)
As you start to build your coaching business, there are a few other things you’ll need to safeguard your business and there are some things you will need to know about to stay legally compliant.
Insurance For Your Coaching Business
Insurance isn’t a legal requirement in the UK but it’s standard for most businesses to have some cover. Apart from the protection it should give you and your business, you may find some clients won’t work with you if you don’t hold the right insurance.
As a coaching business, you should consider professional treatment liability insurance. This should cover you for any damage or injury that arises in the course, or as a result of, your services. Professional treatment liability insurance is typically for medical professionals, however, therapists and coaches tend to secure this insurance as it should protect them and enable them to cover legal costs should any client claim physical, financial or emotional harm as a result of advice you may have given them.
If you are coaching in a physical location, you may also need public liability insurance which protects you should members of the public sustain any injuries at your premises.
What You Need On A Coaching Website
Most business coaches will have a website to showcase their services and enable enquiries and session bookings. On your business website (or any marketing material) it’s important to describe your services and the impact they may have honestly. Of course, you'll want to focus on the benefits, your credentials and your successes, but it's also important to be transparent, not exaggerate your experience and avoid overpromising.
Every website also requires a privacy policy and cookie consent.
A cookie policy may be a separate document or be part of your privacy policy. You will also need a cookie consent on your website and first time website visitors will need to be able to either accept or reject this. Within this, you should provide a link to your cookie policy which should include information regarding what cookies you are collecting and why.
Your privacy policy should explain what information you collect and store, how you protect it and how it may be used. This is a legal requirement on any website and should comply with UK data protection. For more guidance on the legal practices and documents you should have on your website, please refer to my Checklist For Launching A Website.
Terms And Conditions
Terms and conditions are very important for any business offering services to clients. They serve as an agreement between you and your clients regarding what your services will entail, how they will be provided (remote, face-to-face, group sessions, etc.), your fees and cancellation policy, information about your intellectual property rights, your liability levels, as well as other details and clauses to ensure legal compliance and most importantly to protect you and your business!
As a coaching business, you should also consider a clause on how you will protect your client's privacy and keep any information disclosed to you during sessions private (see next section of this blog for more info).
Whilst there are templates for terms and conditions available online, coaching businesses will need a robust agreement that ensures clients fully understand the services you are providing and how these will be provided. As a business that provides personal and professional advice, it’s important that your terms and conditions also protect you financially, as well as safeguard your professional reputation.
You can find out more about business terms for coaching businesses in my guide - 5 Essential Legal Protections In Business Terms For Life Coaches.
One of the most important things you must make sure you do, in regards to your business terms or terms and conditions, is make sure you give them to your clients and that they get signed. Many new business owners and freelancers can feel awkward about providing contracts to clients, especially after being so elated to have been entrusted as a coaching professional. However, this agreement must be formalised. Not only does it lay out your terms (including payments), but it also protects your clients and acts as a guide for them to know what to expect and what is expected from them in order to get the most from your service.
Data Protection Compliance
Data protection compliance is important for any business, particularly those who might be dealing with sensitive information.
Firstly, it’s important to establish whether your business needs to register with the Information Commissioner’s Office. Registering as a data user is a requirement of most businesses collecting and/or processing personal data and this involves an annual fee. However, there are some exemptions (find out more).
Aside from this legal requirement, compliance with data protection guidelines is essential. Currently (publication of this guide was in January 2024), the UK has adopted into UK data protection laws, the EU’s General Data Protection Regulations (GDPR), in the form of the UK Data Protection Act 2018. GDPR guidelines dictate how businesses should collect, process and store personal data in a responsible and legally compliant manner.
Once you have a good understanding of data protection guidelines (see my blog on Data Privacy, GDPR and Data Protection to learn more), then you should draft or check your privacy policy. Your privacy policy is where you make the public aware of your data protection practices. This should include how you collect data, what data you collect, what this is used for, how this is processed and how this will be protected and ultimately disposed of.
Even if you use a lawyer (which I’d recommend), or a template, to create your privacy policy, you will still need to have a good understanding of what is in it and what it means. Essentially, your privacy policy dictates how you handle personal data as a business and so your business practices must mirror and comply with this.
Finally, if the type of coaching you offer means you’ll be collecting sensitive data about your coachees (so things like health data for example), then you will need to make sure you have the appropriate data consents built into your client on-boarding legal documents. Take a look at my blog about data consents. This relates to psychology practices, but the legal principles relating to data consents will partially carry over for coaches collecting sensitive data.
Considerations When Setting Up A Coaching Business
As someone who is, or is thinking of becoming a coach, you probably feel you have something to give back - some experience to share, a listening ear, some constructive advice. It’s important when starting a business that you approach it with positivity and focus on the difference you can make.
It's important to recognise that putting provisions in place, having and supplying formal client agreements and risk assessing then protecting your business is not a negative act. It’s knowing that, for all the wonderful things that might happen and how brilliant your business might be, simple mistakes or client disputes can deter you from your mission if you've not taken steps to prevent this from happening. That’s why it’s important to learn about proper business practices, swot up on data protection and put the right contracts in place.
My free coaching business checklist will be able to help you with this and, for something more specifically tailored to you, download my Coaching Masterclass recording for just £25.
For an expert-guided start, you could also look at a Coaching Legal Package. This includes the Coaching Masterclass recording, bespoke business terms for your business, website terms, your privacy policy and your cookie policy for just £149.
Alternatively if you are going to be providing services to corporates then take a look at my Business Coaching Toolkit (priced at £250), which is a toolkit offering an end-to-end pack of documents including all the legal documents you need to put in place with your client (the sponsor) and their employees (the coachees) as well as a really helpful budgeting spreadsheet tool and proposal template to help win your corporate client before you get to the contracting stage.
Whether you are setting up a new coaching business or you’re here to check if your existing coaching business has the right provisions in place, I wish you all the best in your venture. Coaching businesses are elevating entrepreneurs and helping all kinds of businesses - let's make sure yours is protected too. Get in touch for advice.
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