#174 This will protect you and your coaching business
Coaching can be an immensely valuable service for a business owner. Over the years, I've had some fantastic experiences with coaches who made a significant impact on my business journey. However, as the coach, it's crucial to make sure that you are running your business with an unwavering commitment to risk mitigation.
If you’re a long-time listener, you would have heard me talk about why a risk mitigation strategy is critical for small businesses. In today’s episode, I’m focussing specifically on how to protect your coaching business, focusing specifically on your legal documents, often referred to as your coaching agreement.
The Importance of Tailored Agreements
A coaching agreement is a vital document that outlines the terms of your service engagement with clients. It should be specific to you and drafted with your unique business in mind. This contract should include:
Your services: What you do and how you do it.
Exclusions: What you don't do.
Payment terms: How you get paid.
Termination clauses: Your policies on ending the contract.
Disclaimers and Liability Clauses
The most critical parts of a coaching agreement are the disclaimer and liability clauses. These are the sections that will truly protect your business.
Disclaimer Clauses: These clarify explicitly what you are not promising to do, which guarantees you are not making, and what you are not responsible for. This clear communication gives your client absolute clarity about what you are not offering, which helps to prevent misunderstandings and misaligned expectations.
Liability Clauses: These outline what you, as the coach, will not be responsible for. They limit your liability and define very clearly what you undertake to do. Knowing where you're liable and how to limit that liability is crucial.
Why Templates Won’t Suffice
If you’re tempted to use a template or copy someone else’s agreement, think again. Templates do not take into consideration the nuances of your specific business and, in most cases, won’t cover you against risk. You won’t know whether these documents work as intended until you need to rely on them, and by then, it might be too late.
Ask yourself these questions:
Do you have a tailored coaching agreement aligned with your business operations?
Are your disclaimer clauses and liability provisions adequate and correctly worded?
If the answer is no to any of these questions, it's time to consult with a business lawyer or reach out to me for a discussion. Ensuring you have the proper documentation in place will provide the confidence and peace of mind you need to serve your clients effectively.
Full Transcript:
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[00:00:00] Tracey: Coaching can be an incredibly valuable service for a business owner to engage with. I have had some wonderful experiences with coaches over the years and some that have made a real impact on my business journey. The right coach can be absolute gold to a business owner. As a coach though, you have got to ensure that you are operating your business with a rock solid commitment.
[00:00:46] Risk mitigation strategy. If you've been listening for a while, you will have heard me talk about the critical nature of a risk mitigation strategy for a small business owner. I've spoken about the elements, I've explained them, and I've talked more generally to small businesses in relation to risk. In this episode, I'm going to dive deep into what is really important for a coach to think about and ensure they have in place to protect them and their business. So I'm getting really specific for coaches in this episode.
[00:01:24] Long time listeners know that I act for predominantly coaches, creatives, and consultants. So I'm diving in and talking to you out there coaches, because this is really important.
[00:01:36] There are so many different types of coaching businesses and what I'm sharing with you today is important regardless of the type of coach that you are and the type of coaching business that you have. So let's just revisit for a moment the risk mitigation strategy that a coach needs to think about as a small business owner.
[00:01:56] There are three pillars. One is your business structure. Two is your insurance and three is your legal documents. Because each business is so different, each risk mitigation strategy is going to be different. There is no one size fits all in anything that I do. And when it comes to protecting your business, it's so important to know that every business is different and what works for you may not work for the next person. So don't copy what someone else does, thinking it'll be right for you. Dive in and understand what it is you've got in place. Take some time to understand what your risk mitigation strategy is as a coach and make sure it works for you and that is where you get real peace of mind.
[00:02:40] So in this podcast episode, surprise, surprise, I'm going to focus on the third pillar of that risk mitigation strategy and that is the legal documents. Now there's something in particular I'm going to share, but bear with me. I want to just unpack a little bit. Why. The legals are so important. And when I'm talking legals, I'm talking your client service agreement or your coaching agreement. And you know, by now, if you've been listening for a while as a coach that your three core documents your client service agreement or your coaching agreement, your website terms and conditions and your privacy policy.
[00:03:16] But what I'm sharing with you today relates to the coaching agreement. So that's the agreement that you have in place with your clients. That's the agreement that you issue before a client engages you. You've got to get the sequencing, right? So your coaching agreement, you can call it what you like; service agreement, service terms and conditions, or a coaching agreement. For today's podcast episode, I'm going to refer to it as a coaching agreement. I've got several clients who are coaches, different types of coaches, and predominantly, they're referring to these agreements as their coaching agreements. So let's use that. So when you're focusing on developing your coaching agreement, you need to make sure obviously that it's tailored for you, it looks like you, it sounds like you, it's branded for your business. It has your language.
[00:03:59] It doesn't look like something a lawyer's printed out and changed the names because that's not going to serve you. That needs to be tailored to work for you. So it needs to include things like what you do, how you do it, what you don't do. It needs to deal with your payment terms. It needs to deal with the very important consideration of termination clauses.
[00:04:23] Oh, my goodness. This is so important since late last year, November in fact, when there were changes made to unfair contract term laws. I've talked about those changes a lot on the podcast, and I've written about them over on the resources page on the website. So dive over and take a look if this is the first time you're hearing about this. Termination clauses and how they work for you and your refund policy needs to be tailored and considered in the context of how you operate your business and what it is that your clients are engaging you to do. So super important.
[00:04:55] But the most important thing that a coach needs to consider and dedicate appropriate time and energy to getting right in their coaching agreement are their disclaimers and liability clauses. This is the part that is going to really protect you and your coaching business. It's your disclaimers and your liability clauses. Hmm. You might be thinking, "Tracy, this doesn't sound all that exciting. What do they even mean? Isn't that just a legal clause? Aren't they the same for everyone?" Well, I'm going to take you through now and explain to you what they are and what they mean, but no, they are not just legal clauses and they are not just the same for everybody.
[00:05:37] These are so important to be nuanced for your business because the way these clauses are drafted will be determined by what it is you're doing in your business and how you're doing it.
[00:05:48] your disclaimer clause or clauses are the clauses that provide crystal clear clarity on what you are not promising to do, on what guarantees you are not making and what you are not responsible for. This clause, when drafted properly helps prevent misunderstandings and misaligned expectations that typically arise when there is confusion over wording that might be used on a website or wording that's included in a proposal or a service package. By making sure your disclaimers are drafted properly for you, it makes it crystal clear what it is That you're not doing. Sounds a little counterintuitive, doesn't it? When you say, but Tracy, you talk about these agreements all the time. We're supposed to manage expectations and set out all the things we are doing.
[00:06:41] And yes, you absolutely are. But the importance of the disclaimers is to make it clear that you are not guaranteeing a certain outcome, or you are not promising a particular transformation. And this is really important because there's a lot of sales pages that I see. There are a lot of PDFs circulating that include lovely copywriting language around the transformation and identify the client's problem.
[00:07:08] Talk to them about the experience and what their transformation is going to be. And I understand all of that, but the wording needs to be really intentional and mindful of promising or guaranteeing a certain result or outcome when you cannot make such a promise or a guarantee. And you get your protection, not only by making sure that your sales pages and your representations about your service offerings are appropriately worded, i. e. you don't promise to transform somebody's life because obviously you can't do that. Only they can do that. You can assist of course. You can't You can guarantee that you'll do your best, and you can guarantee that you'll work with someone to support them work towards their goals, but you can't guarantee that they will achieve their goals by working with you and you can see the difference.
[00:07:59] I'm sure you're nodding along thinking. Yep. I get it. I get what you mean. Gosh, this is tricky, isn't it? Yes, it is. But when you have That intentionality around what it is that you're sharing with the world on your sales page or your PDF service package offerings. When you're mindful of that, and then when you have properly drafted disclaimer clauses, which set out the things that you're not promising or guaranteeing or doing, you've got adequate protection.
[00:08:27] And this is so important because if there is a misunderstanding, you can quickly see where this could go and how quickly misunderstandings can escalate, particularly when somebody genuinely feels like they've been wronged or lied to or misled. We've all heard stories like that. So your disclaimer clauses as a coach are vital to get right for your business. Can't copy and paste this stuff. Templates don't work.
[00:08:57] Then we've got our liability clauses. Liability clauses are clauses that outline very clearly upfront what you won't be responsible for, what you And you're saying, I will not be responsible for you trying this with me. I'm not going to be responsible for the results you get when we're working together and trying my approach. I'm not going to be responsible if you try my method or my techniques. You're limiting your liability here. So it's very clear what it is that you're undertaking to do and what it is that you will be responsible for.
[00:09:28] Knowing where you're liable and how to limit your liability is so important. You do it in your liability clauses. They're limiting liability provisions. They limit your risk. you're starting to see the nuances that need to be made here and why it is that the coaching agreement is so important, why it has to be tailored and nuanced to suit you because this is the document that's going to give you in your coaching business, the protection that you deserve, that you need.
[00:10:00] There are so many different types of coaching services, and this we're seeing more and more. It's not a regulated industry. It's very easy for people to come into the industry, not necessarily so easy for people to succeed. In my experience, you really do need to be the real deal to make a go of it in coaching and like I said earlier, I've had some incredible experiences with coaches that I've worked with in my business throughout my business journey, but because what coaches do is so unique to them, they get really involved in your business. They have knowledge of personal and confidential things. They have an intimate understanding of what's going on in your business and if we're not talking business coaches and we're talking a life coach or a health coach or a sex coach or whatever it might be, the principles, the same.
[00:10:47] As a coach, you're gaining knowledge. You're gaining intimate details and understandings of the inner workings of a business or of somebody's life or livelihood or personal circumstances. And because you have access to that information, it can be very easy for a client to misunderstand the relationship and think that you are now responsible for working with them to get results. You're now responsible as the coach for the outcomes. When in fact, you're not responsible for the outcomes. You shouldn't be exposed in terms of liability and responsibility and risk for outcomes that your client does or does not achieve. Of course you shouldn't.
[00:11:30] And if you're a coach listening to this, you'll be thinking, Oh my gosh, of course, I don't want to be responsible for that. I can't guarantee that the client has to do the work. I just support them. I just give them the tools. I just give them the knowledge and you're absolutely right. That is what you do.
[00:11:45] But my question to you, dear coach is, is that what your agreements say? Is that included in your coaching agreement? Do you have those adequate protections? Or, did you buy a template or use someone else's agreement, assuming that it'll be right and that you're covered when actually you have no way of knowing if it's right or if you're covered.
[00:12:08] And like I often say, when you're using documents that you've obtained that way, you're not going to know whether they do what they need to do until the chips are down and you need to rely on them. And by then it's too late. If they fall short, it's too late.
[00:12:22] So the takeaway as a coach, do you have your coaching agreement tailored for your business and does it align with how you operate? Do you have disclaimer clauses and liability limitation clauses that work for you? Do you understand those clauses? Are you confident in those clauses? If the answer to any of this is no, it's time to speak to your business lawyer or reach out and have a conversation with me around those clauses, have them reviewed, make sure you've got the right documentation in place so you can go forward with confidence and real peace of mind and continue to serve the beautiful clients that you have.
[00:13:06] chances are there's some real exposure to you and your business and that doesn't have to be the case. So you've heard me say it before. I say it again. There's no substitute for preparation. You can't take shortcuts with these things. That's why I wanted to deliver this episode so that you knew what it is you need to be focusing on in your agreements to get that protection that you need as a coach.
[00:13:29] I hope you have found this episode helpful. If you have a friend or a colleague who's a coach and you think might benefit from this, share this with them, do a service, help people understand how to protect the businesses they're building because as I always say in business, prevention is better than cure. Thank you so much for listening. I appreciate your time. I'll catch you next week.
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