As a business coach, you’ve invested time and money in your personal growth and coaching accreditations. You’ve worked hard to attract your ideal clients, and your reputation means EVERYTHING to you. But don’t let it all go up in smoke for lack of the concise communication of your terms of engagement that a coaching contract delivers, writes Shalini Nandan-Singh, founder of Love Your Legals.
Four reasons why every business coach needs a coaching contract
1. Building trust
A well-written coaching contract means disputes are far less likely to occur. If a dispute arises, you have a legal platform for negotiation.
Trust is built via open and transparent communication. A well-drafted contract will show that the coach understands the client’s journey, and build the know, like and trust factors critical to the coach’s success.
2. Managing expectations
Business coaching relies on clients taking action to achieve outcomes. Therefore, managing expectations about both actions and outcomes are vital to reducing the likelihood of disappointment (and being sued).
Expecting the client to read your mind about what is expected of them and how you work is unrealistic, and a recipe for confusion and mistrust that will affect your business coaching reputation.
A coaching contract will be upfront about client expectations and your service limitations. It will protect your reputation from claims of poor service or substandard delivery.
3. Ensuring payment
Chasing money is stressful. A coaching contract with clear information about fees and payment terms means less money-chasing – your client has terms to refer to.
Importantly, a coaching contract provides legally binding and enforceable terms without having to engage in difficult conversations that take the fun out of business.
4. Protecting your business
Business coaches help clients grow their business, get more clients and make more money. If you are making these promises in your coaching business, well-drafted disclaimers about the extent of results your business coaching will provide will protect you from unrealistic expectations and claims of misleading advertising under Consumer Law.
The Business Coaching Contract – key clauses
A coaching contract documents the legal agreement between a coach and their clients and must be written in compliance with Australian Consumer Law.
Key clauses in a legally drafted coaching contract include:
- Accurate information about the parties – legal entity that is your coaching business and your client’s business
- A description of the exact business coaching services your client is paying you for
- Client responsibilities – what you expect from your client to achieve results
- Fee information – including payment plan information
- Payment terms – deposits, milestone payments, payment plans, late payments
- Session cancellation and rescheduling terms
- Refund terms – remember that a blanket ‘no refund’ policy is illegal, and refund terms must comply with Service Guarantees under Australian Consumer Law.
- Termination – how the relationship can be legally terminated between the business coach and client
- Professional disclaimers about the level of promised results in the context of the client’s efforts and ability in the coaching relationship
- Confidentiality and intellectual property rights prevent your bespoke coaching content and material from being copied and/or disseminated.
Every business coach-client relationship is different, so your coaching contract should be tailored to each client. If you use a coaching contract template, pay particular attention to modifying the template to accurately reflect your business and the service you are providing.
Remember to give your business coaching clients time to consider your coaching contract BEFORE they commit to working with you. Giving clients time and space to peruse the coaching contract demonstrates professionalism, integrity and confidence in your coaching business practices.
Contracts are negotiable until accepted by both parties. Therefore, carefully examine any alterations your coaching client asks of the contract. Of course, you are not obliged to accept any changes, but a request for changes may indicate an opportunity for improvement in some aspect of your business coaching service and delivery.
Consider negotiation an opportunity to strengthen the relationship with your coaching client and grow as you learn ways to improve your coaching service.
Not only does a coaching contract legally protect you, but it also protects your clients. Another way to think of a coaching contract is as relationship insurance – clearly stating your business practices and processes, what your client can expect from you and what you expect from them, in clear and relatable terms means no nasty surprises and seamless service.
Not to mention, a good coaching contract shows you take your business coaching seriously, are professional and well organised.
The good news is that you don’t have to start from scratch with expensive legal documentation. Instead, protect your reputation, business and clients with templates you can customise to suit each client.
Being diligent can save you from heartaches and financial stress down the track. If you’re unsure about any aspects of your contracts or policies, talk to a legal professional to ensure you’re covering all bases.
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