From: Olly Richards
12th May 2023
Hobbitshire (Isn’t it supposed to be Spring already?)
When you’re scaling a business...
The order in which you do things matters.
A few weeks back, I received an email from a reader who was struggling to shift away from 1-to-1 client work, and into group coaching.
Unfortunately, it hadn’t gone well.
She’s making less money, is more stressed, and is starting to hate her business.
As I explained to her:
“You’re not doing the wrong thing, you’re just doing it in the wrong order.”
If you work 1-to-1 with clients, as a teacher, coach, or expert…
And you've struggled to make group coaching work...
This article contains a lesson that has the potential to save you a lot of time, make you a lot more money, and help you scale faster.
Expanding Beyond Your Means
Let’s begin with the message I received.
The business in question is language teaching, but it’s just as relevant for any coaches or experts working 1-to-1 with clients, as you’ll soon see.
Anyway, here’s the long and short of it…
Jenny (not her real name) has been teaching languages online for years online.
And she’s great at it…
She attracts clients from around the world, works with them 1-to-1, and makes a great living doing something she loves!
A while ago, she saw the potential to grow.
So she decided to add group lessons to the mix.
“I can teach the same number of hours, but make even more money!”
She offered the group lessons to her list, filled out all the spots, and then quickly hired a second teacher to open more capacity!
That’s where things started going South.
As Jenny wrote:
“Olly, I’m miserable. The group classes started so well, but now students are starting to drop out, and I’m struggling to replace them. Every month the groups are getting smaller, but I still have to pay my teacher’s salary! I’m losing money, life is stressful, and I’m starting to hate my business.”
And then came the fateful line…
“I’m thinking of packing it all in and going back to what I used to do.”
Sound at all familiar?
The path of business is strewn with coaches who have rushed to scale their business with group coaching, collided head-on with reality, and imploded faster than a balloon at a cactus convention.
It happens a lot.
But here’s the thing:
It’s not wrong, it’s just in the wrong order.
A Predictable Tale
Here’s what happens in a nutshell:
- You start your coaching business, build your brand and snag some well-paying clients. Life is good.
- But all around you, you see people offering group coaching programmes. You get FOMO, and open your own group.
- You fill the group programme easily using your list. You’re on top of the world, and ready for the big time!
A few months later…
- People are dropping out each month (churn), and the group size is dwindling
- You can’t replace the people who are dropping out (You tapped out your list on launch)
- You start hustling just to maintain the group (forget about growing it)
- You’re spread too thin, you take extra 1-to-1s to make up the shortfall, and you’re stuck on a hamster wheel worse than before you started
Virtually every coach I meet who’s trapped at a 5- or low 6-figure level suffers from this exact problem.
So what’s the solution?
As I said – group coaching it’s not wrong, it’s just in the wrong order.
Okay, time to put you out of your misery…
It’s The Audience, Stupid!
The core problem at play here is simple:
When you’re hustling for 1-to-1 clients, you’re in control.
- You have your conversations
- You send your DMs
- You create your content
And, well-paying customers come through the door.
Need more work? You can hustle as much as you want to, to get new clients.
There’s no pressure.
But as soon as you add group coaching to the mix, the dynamic changes entirely.
People inevitably churn, everyone sees the numbers are dropping, and this puts you in:
An uncomfortable race against the clock!
You had to tap out your list in order to fill the group programme in the first place, so there’s no-one else left to sell to!
So the core problem is:
You can’t expand beyond the size of your audience.
Before expanding from 1-to-1 to group coaching, you have to make sure your audience is big enough to sustain the numbers.
Great, so we’re all done here?
You want to know how to do it?
Oh, well, since you asked so nicely…
Digital Cash Flow
The wrong way:
- 1-to-1 offers > group coaching
The right way:
- 1-to-1 offers > digital products > group coaching
That’s right, the next move after your 1-to-1 offers should not be to group coaching, but rather to digital products.
With digital products, you create net free cash flow, which you can use to grow your audience.
And then – you guessed it – with that new audience, you can fill your group coaching programmes.
This is why I said earlier that moving from 1-to-1 to group coaching isn’t wrong, it’s just in the wrong order.
So, to go back to Jenny…
When she was first considering expanding from her 1-to-1 teaching business…
Instead of starting group sessions, the smarter thing to do would’ve been to create a series of digital products, by asking:
- “What are my clients always asking for?”
- “What would help them learn independently?”
- “What can I make for those who can’t afford 1-to-1?”
- Sell the products to her list
- Invest that cash into ads to build her list
- Use the products she’s built to liquidate her ad cost
- Growing her list exponentially
And then, once she has the numbers, she can go ahead and launch her group lessons…
Secure in the knowledge that she has a system to bring in new leads, that she can use to continue to grow the group programmes.
This would help Jenny grow her business in a much more aligned way…
Remove the pressure…
And make it a lot more enjoyable along the way.
The Purpose Of Revenue Streams
Just to stick a cherry on top of this entrepreneurial cake, let’s look at how these various parts function in the overall growth of the business.
This is a way of looking at businesses that I learned from Scott Oldford, and I find very useful conceptually.
It looks a bit like this…
Consider your 1-to-1 as your bread and butter.
This is what got you started. It’s what pays the bills. It covers your lifestyle expenses. So don’t mess with this.
Next, the function of your digital products is to pay for the growth of your audience. This is not for cash in your pocket, it’s for putting directly into ads.
The function of your group programme (which you can now fill, thanks to your new audience) is for business growth - hiring team, product development, marketing, whatever suits your purpose.
Of course, the reality is never quite this clean, but I’ll tell you what…
Since I started thinking in these terms, it’s made me a smarter entrepreneur.
For example, when I started this newsletter, I set aside $200k explicitly for audience growth. This is crystal clear in my mind, and there’s no ambiguity. It makes it so every time I walk past that new Aston Martin SUV, I don’t even get slightly tempted to dip my fingers in the honey pot.
Well… not much anyway.
Get Things In The Right Order
In this newsletter, we talked about the common mistake of coaches and experts rushing to expand from 1-to-1 client work to group coaching…
Only to find that group numbers start to shrink, and they can’t maintain the numbers.
Before expanding to group coaching, you should make sure your audience is big enough to sustain the numbers.
To do this, build digital products first, to create free cash flow, which you can invest into ads to grow your audience.
With a larger, sustainable audience, you can fill – and sustain – group programmes.
What I find so interesting about this is the question of the order in which you do stuff.
None of us are lacking for information…
(“If more information was the answer, then we’d all be billionaires with perfect abs.” - Derek Sivers)
What makes the difference in business is the experience to know what to do… and when.
That’s where the value of a mentor comes in.
Someone who’s already made the mistakes.
And it’s what I’m trying to deliver with this newsletter.
Hope I’m succeeding.
(If I am, please forward this on to a few friends!)
And if you have any questions, go ahead and leave a comment below.
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