Setting Up Your New Coaching Business

So you're thinking of starting a new fitness or nutrition coaching business? How do you setup the business / financial side? Follow these steps first and reach out to me to let me know you've done it! I'd love to cheer you and offer you next steps.

1. Register your business with your state Secretary of State

The steps to do this vary by state. But once you are approved you’ll receive a document showing your Business Registration or Articles of Organization or a similar name.

It is a good idea to check with a lawyer or CPA on which business entity type to choose. There are tax implications for your choice, and possibly tax savings. There are also liability coverage considerations. The only general comment I will make on this (since I don’t offer entity choice consulting) is that choosing an LLC offers some liability coverage while still allowing you to be a sole proprietor (self-employed individual) for tax purposes.

Lastly, consider what you call yourself. Some states have requirements on which credentials you must have to call yourself a “nutritionist” vs a “health coach” and there are always scope of service considerations with any role in health or fitness. Don’t name your business something you’re not allowed to within your state!

2. Register your business for a Federal Employer ID Number

Once you have your business registration completed with your state, you can register with the IRS to receive an Employer ID Number (also called EIN, Federal EIN, Tax ID Number, or TIN). The benefit of registering for this is you’ll be able to open business banking accounts and if you are hired as a contractor, you will be sharing this EIN instead of sharing your social security number.

3. Setup a business bank account

Choose your favorite bank if you have one! I like to recommend Relay Bank (<- affiliate link - I only recommend services I use and love) because it integrates very nicely with QuickBooks, makes it easy to move money in and out of personal accounts, and offers the ability to setup automated cashflow management (full blog post on that coming soon!). But whichever you’re most comfortable with is great.

All customer payments should deposit here, all business expenses should be paid out of here. This is the #1 way to make it easy for yourself to track your business finances.

One caveat – most credit unions do not sync nicely with QuickBooks and end up requiring you to re-sync your bank accounts frequently. If you plan to use QuickBooks now or down the road, you may want to avoid a credit union.

4. Track your income and expenses

If you are starting very small and have only a handful of customer payments and expenses each month, it is totally possible to manage this in excel – no fancy format needed.

Start a new spreadsheet and make one tab for income and one tab for expenses. Once a month look at your bank account and record everything in your spreadsheet with notes about what it was for.

If you’re starting with a bang and have a lot more financial activity, drop me a line. I offer a QuickBooks setup and training program and host the Cash Fit Community to help nutrition and fitness coaches DIY their bookkeeping. I also offer monthly done-for-you bookkeeping.

5. Plan for taxes and savings

Remember that you will have to report your self-employment income! The amount you will need to pay will be dependent on your overall tax picture, so PLEASE talk to your tax pro as I do not give tax advice, but it is a good idea to set aside at least 30% of each dollar you earn for taxes and business savings. That may end up being different than what you need to pay – especially if your startup expenses are high and you report a net loss – but worst case scenario you’re building up your business savings and not spending money you may end up owing in taxes. The thing you want to avoid is assuming if you earn $1,000, that it means you get to pay yourself $1,000.

Are you a nutritionist, coach, or personal trainer wanting help getting your business finances better organized? Let’s talk!