How to Finance Business Coaching | 5 Options to Consider

In this article, we’ll explore the various financing options available to you, so you understand where you can get financing from and what the best option is for you and your business.

If you're considering working with a business coach and have a realistic expectation of how much it will cost, you may be feeling a little overwhelmed and unsure about how to finance the service. Business owners finance their coaching in a variety of manners, and there's no right or wrong way, you just need to be sure the option you choose is right for you and your business. 

Here at ActionCOACH, we have had the opportunity to help thousands of people make their business and personal dreams a reality. We did this by not only coaching them to success but also by helping answer their questions about business loans and financing and directing them to financial associations that can best serve their needs. There are many ways that UK business owners can finance the cost of business coaching, in this article, we'll explore the top 5 options: 

• Government Funding
• Tax Breaks
• Loans
• Business Expenses
• Pension
  
  

** Top Tip for Financing Business Coaching: One top tip for financing business coaching is to prioritize your spending and invest in coaching that will have the greatest impact on your business. Before you begin your search for financing options, take the time to assess your business needs and identify the areas where coaching can have the greatest impact. This might include improving your sales and marketing strategy, enhancing your leadership and management skills, or developing new products or services.**  

Government funding for business coaching

In the UK, there are various government-funded programmes that can help finance the cost of business coaching. For example, the Business Development Grant Scheme in Scarborough offers up to £5,000 to businesses in Scarborough looking to grow. Additionally, the First Enterprise - Enterprise Loans provides up to £250,000 in government-backed loans for training and development. There is a range of support options available to small and medium-sized businesses across the UK, and this can be a great way to offset the cost of business coaching.

To qualify for government funding, you will need to demonstrate that your business has the potential for growth and that you are committed to investing in your own development. You will also need to find an approved coach or training provider who can work with you to develop a customised coaching plan that meets your specific needs.

Tax breaks for business coaching

In the UK, there are various tax breaks and incentives available to businesses that invest in training and development. For example, the Apprenticeship Levy allows businesses to claim back up to £15,000 per year to fund the cost of apprenticeships and other training programmes. Additionally, the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) offer tax relief to investors who support small and medium-sized businesses.

By taking advantage of these tax breaks, you can reduce the overall cost of business coaching and make it more affordable for your business.

To qualify for these incentives, you will need to meet certain criteria and follow specific guidelines, so be sure to consult with a tax professional to ensure that you are taking advantage of all available options.

Loans for business coaching

Loans are another option that UK business owners can consider when financing the cost of business coaching. There are several types of loans available, including secured and unsecured loans, and the interest rates and monthly payments can vary depending on the lender and the specific loan product. Secured loans require collateral, such as property or equipment, to secure the loan. These loans typically have lower interest rates than unsecured loans because the collateral reduces the risk for the lender. Unsecured loans, on the other hand, do not require collateral but often have higher interest rates to compensate for the increased risk.

When considering a loan for business coaching, it's important to shop around and compare interest rates and repayment terms from different lenders. You should also consider the fees associated with the loan, such as origination fees or early repayment fees, which can add to the overall cost of borrowing.

As an example, let's say you want to borrow £10,000 to finance a business coaching programme. If you were to take out an unsecured loan with a 10% interest rate over a 3-year term, your monthly payment would be around £322, and you would pay a total of £11,581 over the life of the loan. If you were to opt for a secured loan with a 5% interest rate over the same 3-year term, your monthly payment would be around £301, and you would pay a total of £10,837 over the life of the loan. However, you would need to provide collateral to secure the loan, which could put your assets at risk if you are unable to repay the loan.

When considering a loan for business coaching, it's important to weigh the benefits and risks of borrowing and ensure that you have a solid plan in place for how you will use the coaching to grow your business and generate revenue. By carefully considering your options and finding the loan product that works best for your business, you can access the coaching you need to succeed while managing the cost of borrowing.

Business coaching should be self-funding, and very quickly in your relationship, you should start to see an upturn in profits. At ActionCOACH, we usually see this between month 4 and month 6 - we also have a results guarantee in place which will also help towards your loan application. Investing in business coaching should be seen as similar to investing in marketing. If you pay your business coach £5, your business coach, in the long run, should at least be giving you £10 back, if not more.

Business coaching as a business expense

You may have the funds to be able to start business coaching straight away. It's quite common for businesses to invest in coaching and training programmes for their employees or executives as a way to improve performance and productivity. As long as the coaching is directly related to the improvement of skills, knowledge or performance of the individual or team members within the business, it can be considered a legitimate business expense. It's important to keep accurate records of all expenses and consult with a tax professional to ensure that you are following all relevant tax laws and regulations.

Using your pension pot for business coaching

There are several ways to raise finance from a pension in the UK. One option is to take out a pension loan, which allows you to borrow money against your pension fund. However, not all pension schemes offer this option and there may be specific requirements that must be met. Another option is to use a pension drawdown scheme, which allows you to withdraw money from your pension pot as and when you need it. This can provide flexibility in managing your finances, but it's important to carefully consider the potential tax implications and ensure that you have enough funds remaining in your pension for your retirement years.

You could also consider selling your annuity income stream for a lump sum through an annuity purchase provider. However, this option may not be suitable for everyone and it's important to seek professional advice before making any decisions regarding your pension finances.

Is financing business coaching the right option for you?

Investing in business coaching is a smart move for any entrepreneur looking to improve their skills and take their business to the next level. While the cost of coaching can sometimes be a barrier for business owners, there are a variety of options available.

In this article, we focused on the following 5 funding options for business coaching:

• Government Funding
• Tax Breaks
• Loans
• Business Expenses
• Pension 

From government funding and pension schemes to credit cards and crowdfunding (which we haven't covered here), there are a variety of ways that UK business owners can finance the cost of coaching. By exploring these options and finding the one that works best for your business, you can access the coaching you need to succeed without breaking the bank.

The next step after securing funding

Once you have successfully secured funding for your business coaching, the next crucial step is to find a business coach who can guide you toward success.

At ActionCOACH, we understand the importance of finding the right coach who aligns with your needs. That's why we would recommend talking with one of our advisors here. 

Not sure which coaching programme is right for you? Take a look at our recommended programmes page before speaking to a coach.