The Sherpa Executive Coaching Summary, a large-scale annual survey on the state of executive, life and business coaching, was just released yesterday, with a startling statistic that 10% of all coaching schools worldwide go out of business every year - every year.
I've heard this statistic tossed about in reference to specific years, but now it's becoming an annual trend? This flies in the face of an old coaching myth, that the real money is in coach training, not coaching. That couldn't be further from the truth.
Why are coaching schools going out of business when the profession of coaching is still growing?
1. One theory is that there are too many coaching schools. As Donna Steinhorn mentioned in her recent The Truth About Coach Training post, 10-12 years ago, there were only a few coach training schools, but now there are well over 100 coaching schools, worldwide. Sherpa says there are actually over 300 coach training schools in the world. In fact, peer.ca, which tries to compile all the coach training schools worldwide, lists 508, as of today.
That means around 50 coaching schools will go out of business this year. Will one of them be yours?
2. Another theory is that many professional coaches, believing the myth that 'the real money is in coach training', started coaching schools when their businesses were challenged recently during Depression 2.0. If that's the case, I'm guessing most of them have/will go out of business, because it is actually much more expensive and time-consuming to run a quality coach training business than it is to run a coaching business.
Personally, I made more money per hour as 'just a coach' than I do running School of Coaching Mastery. Education, done well, is labor-intensive and labor is expensive.
Why do I do it? SCM is a labor of love for me. I have a vision of one million master coaches worldwide and I'm just getting started.
3. Another theory of why 10% of coach training schools go out of business, is that coach training has become a commodity. There is so much competition that schools are competing on price, rather that value. This was further supported by the incredibly high unemployment rates of the past few years, when people were desperately trying to start coaching businesses with little or no money.
When money is extremely tight, unlikely promises, such as the promise of one coaching school mentioned by Sherpa, that you can 'Become a Certified Professional Life Coach in Just 16 Hours' for $397 or $497, or whatever the price du jour is, become alluringly tempting. If such a school also brags about their 3000 successful graduates, you have to wonder about their criteria for 'success'. I've talked to quite a few 'graduates' of these 2-week wonders (because eventually they realize they need more training and contact me) and not one of them has told me they ever got a single paying client.
So in the race to the bottom, some schools, even the huge schools that were founded in the mid-nineties, have become less profitable. And if you're not in it for love, you'll get out if there's not much profit.
School of Coaching Mastery is about to turn five years old in March. We've weathered Depression 2.0 and our international Ultimate Coach Training coach-students are spreading their masterful coaching skills to thousands of grateful (paying) clients.
I wouldn't close this coaching school for anything. I've got too much work to do to get those one million master coaches out there changing the world for the better.
What do you think? Do 10% of all coach training schools really go out of business each year? Why or why not? I'd love to hear your thoughts in the comments section, below.