Episode #061 The Ins and Outs of Coaching Contracts: What You Need to Include
How to write a comprehensive coaching contract/agreement
A coaching agreement can help you pre-empt trouble and make sure that your clients are well-introduced to what they are about to experience with your coaching.
It’s important to include information that not only protects you in case a client turns sour but especially to help the coaching client understand the nature of the client-coach relationship.
In this episode, we talk about:
The contract protects you
Payment terms are required in the contract.
Flexible coaching policies are crucial for maximizing profits.
Limit liability for the coach; worst-case scenarios discussed
Contract termination, refund, and cancellation fees
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The law is country-specific. And if anything had to happen, your client would have to sue you in your own country. So Make sure you have us reviewed by a lawyer in your country specifically. So with all the legal stuff out of the way, I can actually now Let you know what my true opinion is about the matter. Now I don’t believe that contracts matter so much, if it’s just you working with clients 1 on 1. When you start working with groups and, you know, when you start working with businesses, things can get more complicated. However, generally, You can protect yourself in other ways if you’re just working with clients 1 on 1. And, usually, I would protect myself by making sure that every session I turn up for has been prepaid already.
You also want to make sure that Your clients know exactly what to expect, and I do this by creating, an onboarding call, which I call a mapping call during which I sit with my clients and ask them lots of questions and then outline exactly what’s gonna happen in each session. So they’re really on board with what’s gonna happen. This makes it sort of less required. So we kind of need a contract less in this case because, you know, everyone is clear about what he’s doing. The client knows what they’re doing. I know what I’m doing. We know what’s gonna happen in each session. We know everything is prepaid, so I don’t really need to worry about chasing money.
So in reality, you don’t need a contract that much Because it’s there to protect you. And, you know, if you’ve protected yourself in other ways, then maybe you don’t need so much. You do want people to sign a contract Sort of to to make sure that they don’t share the resources you share with them and they respect your copyright. And, also, that sort of they know all the Small print, unwritten regulations that maybe you cannot share. However, if you’re dealing with 1 to 1 and you don’t really wanna go through the trouble of having a full coaching agreement, you could just work with an engagement letter, which is just 1 letter that states the facts and the regulations and doesn’t need to go into all the legal spiel. But we are here today to explain how this legal spiel actually works and to make sure that you have Everything that you need to share with your clients in your coaching agreement. So let’s dive straight in and start off with the various sections and what needs to appear inside them. So the first thing you need to make sure is in your contract is, of course, your terms of payment.
The terms of payment are probably the most important thing because if not respected, It’s going to cause friction, and it’s gonna cause problems also with the way your workflows. So the first thing you need to talk about is the payment terms. And you may have agreed with a client that they’re gonna pay you in advance or maybe have a payment plan. If you’re risk-averse but want to offer flexibility, you could also offer a payment plan. And you can work it out in a way, this is what I do with my programs in a way that the sessions are always prepaid. So for example, if you’re selling an 8-week program, the client pays 50% on booking, and then 50% after 4 weeks. So this means that You know, when you come to the second half, which is the last 4 sessions, they will have already prepaid the last 4 sessions. So at least every session is paid that way.
This is my favorite way of working. Obviously, I have lots of different kinds of programs, and you can create Payment plans to make sure that you are prepaid, but you’re still giving the client more time to pay. Generally, clients prefer to pay monthly, But, of course, it’s entirely up to you. You are the coach. This is your business. It is entirely your decision. The next section you absolutely cannot do without is the client responsibilities. You want to make sure you have a client responsibilities section because clients need to clearly understand what is expected of them.
And, You know, this is especially important if you have clients who have not been coached before because they need to realize that If they do not take action, they will not see results. So in reality, when it comes to coaching, the bug stops with the client. Of course, the coach is providing guidance, and accountability. They are providing a process and a system that has worked with others before. And if the client doesn’t take action, and it’s not the coach’s responsibility to take action for them, if the client doesn’t take action and they don’t see results, They need to understand that it’s entirely their responsibility. You may also want to have some kind of disclaimer on your sales page where maybe you have testimonials stating that the results may vary and cannot be ascertained because each case is different. Of course, this depends highly on the kind of coaching that you do. I help coaches grow their website traffic and discovery calls.
You know, I help with SEO. I help them launch. One of the systems that I teach is an organic way through SEO and blogging, or other kinds of SEOable content that you can find in search engines. And, basically, I teach a 5 step proven system, which is my signature program. And, of course, I know that if you follow the system, you are gonna get results because I’ve done that with my business. My clients do that with their businesses all the time. But I cannot really assure anyone, 100% that they’re gonna get results. And the reason is because maybe they’re operating in a bit of a different environment.
So maybe there’s something wrong with their website, which is something that we normally look at. But sometimes people don’t want to give you their logins, and they don’t want you to look at their website. So, You know, as a coach, I cannot take responsibility for what you’re like, I’m not allowed to review. So you might have a Similar kind of complication in your coaching business. It’s very important when this happens to make sure that you have a section in your contract that makes it very clear where your responsibility stops and where the client’s responsibility starts. It’s also a great way of starting a coaching relationship because the person who’s going to start Coaching really knows what to expect from you and what they need to prepare. It also brings up certain things like, for instance, Am I comfortable giving someone all the logins to my website or am I not? Because that’s you know, might be a clincher. So it can bring up important things that you need to discuss.
So definitely client responsibilities are a big one, of course. If you’re a life coach or you’re a business coach, there’s going to be a lot of other things as well. So there’s going to be, of course, copyright. So all the tools that you use with your clients and, you know, the PDFs that you Share with them. Maybe you do some meditations. It’s very important to state that this is copyrighted and cannot be shared. Confidentiality is another highly important factor here. You need to make sure that your Clients knows that everything that they share with you is confidential.
And, you know, if you’re working with businesses, you may actually be asked to sign a nondisclosure agreement, which is perfectly fine, and sort of they would protect themselves even more. But As a coach working directly with a single client, it’s very important that you let them know that their confidentiality is going to be respected. And if there are any exceptions in which the information can be shared, what are these special circumstances that allow you to share things as are maybe said in the session. Another important point might be if you provide recordings to A client perhaps you for confidentiality reasons, you may want to delete that particular video or the particular recording that you share with them. So it’s very important to try and put yourself in your clients’ shoes and try to understand what kind of concerns they might have during your specific coaching process. You also want to make sure that you clear about your scheduling policies. So how do clients book and schedule your coaching calls? In my case, I like to give my clients a weekly slot, and we have a date for every session, a date and time for every session that we’re going to meet. Of course, it’s flexible, and clients can move things around if they need to, just as well as I do that sometimes.
But it’s important that there’s a rescheduling policy and a cancellation policy. A lot of life coaches complain about no-shows or people letting them know too late just before the call. It all depends on how flexible your routine is. Myself, I must admit, I am quite flexible with my clients. I do let them cancel late. But if you have a very busy schedule and you’re back to back and you really wanna absolutely maximize the profits in your business, Then it’s important that you have a cancellation policy where people pay maybe just a part of that particular session or that there has to be a cancellation, like, up to 48 hours before or else the session is is paid for anyway. Of course, you need to balance this with the way you chose to do your payment plans or your payment and sort of keep in mind that You don’t want to create a lot of financial transactions. So, you know, if someone has prepaid for sessions And they decided that, you know, they’re not coming to one of the sessions, they told you too late, and you’re charging them a 50% fee, then you might actually have to give them a 50% refund for that particular session.
This gets A little bit too complicated. So always think whether the policies you’re putting in place are actually adding more admin work to your business. For instance, this is one of the reasons why I’m not very strict because I believe that all my clients should get all the time they paid for with me, and usually, I give them a little bit more as well. And I also wanna make sure if they need to cancel, they’re not too worried and sort of they let me know. Of course, I do encourage them to let me know as early as possible. But in in my case, the way I work, it doesn’t really disrupt me too much if a client doesn’t turn up. I just use that hour to create content. So, it it all depends on how you work.
Alongside the rescheduling policy, You’re going to need a refund policy. It’s a very important factor in your business because you need to explain under what circumstances you’re ready to give people a refund if you do at all. In my case, I don’t generally give refunds unless there is a good reason for people To stop doing the calls, I will not refund calls where the client has actually done the session. So that is definitely a no-go For me and that is explained definitely, in my contract. It’s important to know as well that, you You know, in most countries, by law, you do have to offer a minimum of a 15-day cooling-off period, for any course or Coaching program that has been offered online. And this in some countries can actually go up to 30 days. So always ask your lawyer to check The resident countries that you commonly sell to. Because in this case, when it comes to refunds, Actually, the country where they are is going to dictate I mean, they probably cannot enforce it on you, but they are gonna have expectations.
And in my case, you know, I have, like, a 30-day, no questions asked refund, But only if the person has not sort of consumed the services by then. So, obviously, I will give a person a refund within 30 days, but only of the time that they haven’t used, of course, because I’m not going to refund them for for work I’ve actually done. So have a little bit of a think. The way it works with most life coaches, you know, similar coaches, career coaches, business coaches, They would have different refund policies for their b two b and their b two c products. And it really depends on how you work with the client and how they pay you. So have a bit of a think and try to understand what the worst case scenarios might be. For For instance, if you take a while to onboard clients and start working with them, then you need to sort of keep in mind that they could get cold feet and they can ask for a refund. If like me, you try to sort of start quite quickly.
I mean, usually with 1 to 1, people can start quite quickly unless you have to put them on a waiting list. I don’t like to, you know, leave, say, 30 days. If someone has to start in a month’s time with me, what I’ll generally do is actually put them on a waiting list. So I don’t like to take payment early and then sort of leave people hanging because I find that This turns into people getting cold feet or maybe finding another coach because they keep shopping around. And I don’t Think it it makes very good business sense. So I tend to actually close my bookings and go to waiting list when I start Reaching, you know, like, a 30-day lag in how quickly I can actually take 1 to 1 clients on. So have a bit of a think on how this is gonna work For you, the timing, you know, the longer the wait between when they book and when they start working you the more likely people are going to ask For refunds, decide if it’s gonna be 15 days or 30 days, discuss it with your lawyer, and then, you know, make a decision from there. And, of course, Make sure that it goes down in your contract.
The next section is probably best, once again, discussed with a lawyer, and it’s a limitation of liability for the coach, so for yourself. And this isn’t that part of your agreement that basically Explains sort of the scenario of what happens when a client disagrees with your policies and then maybe wants to sue you. So you should ideally have a way of escalating the issue without taking it to, you know, law to the courts in the beginning. Obviously, this is not always gonna be up to you, but what you need to do in this case is create a list of worst-case scenarios of 1st problems that may arise, do this with your lawyer, ideally, or with your attorney so that you can make sure that you limit the damage that can happen to your business in the form of payments or disbursements if such a case were to happen. So an example might be that a client insists That they did not see the results they expected, and they want a full refund for the package purchased. So, you know, they’ve booked this package and have attended all the sessions. And you made it very clear that you don’t give refunds, but this client wants a refund anyway. Another example might be a client who has had to miss a couple of sessions, And they’ve decided that even though maybe they turned up late for these 2 sessions, that it wasn’t their fault and they don’t wanna pay for these sessions.
Or maybe they feel like they need more sessions and they feel that they don’t wanna pay extra that these sessions could be included in the price. So plan ahead for as many scenarios as you can imagine, and then enter a clause in the contract about about it to limit your liability in such cases. So make sure that you state the the maximum you’re willing to pay In such a case, and, of course, if you absolutely, do not want to refund, sort of make it very clear as well. You may also want to explain the steps that they need to take to actually approach you with Their complaints. So it does help to have a clear process. So for instance, you might say something like, if you want to get A refund and you feel that I should have I should not have charged you for a particular session, it’s important that you contact me On this particular email, by the end of that particular month or that particular week, and, you know, let me know what’s your grievance and what’s your problem is. So it’s important also to guide them as to what to do so that you can open up a conversation and hopefully Resolve it amicably. The next step is the termination of the contract.
And, of course, as a as a coach, you’re not gonna see many of these, But there can be unforeseen circumstances, like someone might lose a spouse or maybe A parent might fall ill suddenly, and they really need to stop the session. Now you can obviously offer them flexibility and keep giving them the sessions at a later date, which is what most people are going to opt for. But there might be people who, you know, Because of the problem that has arisen, they also maybe have their bank accounts frozen or, you know, like, maybe they have joint accounts with a spouse who dies or something like that. So you do have to sort of keep in mind that in some cases, the contract termination may be unavoidable. And in this case, you want to make sure that your terms are clear are clear, and they also present sort of the system that you’re gonna process them with. So if you wanna make it clear in advance whether this kind of termination is gonna carry a refund or a cancellation fee. And, obviously, if you’re prepaid and you’re not going to refund them, perhaps you don’t need to charge them a cancellation fee. However, if they were on a payment plan and, you know, they cancel, which means that they’re not going to do the additional Sessions, they have taken someone else’s space there, time that you could you could have got paid for.
So in this case, you may wanna charge a cancellation fee. So the best thing is to just sort of think of these different scenarios and how you would like things to happen. And then once you have done this, I’m actually going to give you a link to a sample contract, which is inside one of my blog posts that you can just copy if you want to to help you have all these sections in your agreement. And It’s very important once you have drawn this up and sort of you you’ve thought of everything by yourself that you also book yourself an hour, with an attorney or with a lawyer, and that you spend an hour just sort of talking and finishing up Your contract. It’s not gonna be a big, long thing. Keep it as short as possible. Remember that this is not one of those contracts where You want to hide things. You want to make sure that the client gets to read everything before they sign it because you want Things to be clear, and you want them to ask you questions if they need to.
Okay. So I hope you found this episode useful. If you have any further questions, you can always reach me at info atstephanifiteni.com. In the meantime, I’m going to leave All the information you might need in the show notes. And as usual, if you’re looking for help with Launching your 1st group program or creating a lead-generation system for your coaching business. You can talk to me on stephaniefiteni.com/call. So that’s stephanie with a p h, and fiteni, f I t e n I, .com/call. And you can book a free discovery call with me, and we can talk about your situation and what’s the best way forward for you.
Thank you very much for listening. To get in touch, go to stephaniefiteni.com/call.
About the Show
In the Profitable Online Coaching podcast, Stephanie and her expert guests answer the most common online coaching and coach marketing questions to help you unravel the facts and take the right next step for your coaching business.
On solo episodes and with guests, she talks about popular topics such as marketing for coaches, blogging, digital marketing strategies, pricing, mindset, and how coaches build successful businesses.
Stephanie is an experienced SEO Content Marketing Strategist as well as a Marketing Coach for Coaches. She talks about online marketing strategies, social media, search engine optimization (SEO), marketing tools, books, and much more.
She learned programming as a fresh graduate and has worked as a trainer, programmer, and web consultant for over 15 years before becoming an online coach. For the last 6 years, she has offered 1:1 coaching and Online Programmes designed for coaches, therapists, and online service providers. She also offers Content strategy sessions and SEO Content Consultancy services to 6, 7 & 8 figure coaches. Contact her on email@example.com.