Here on the blog, I’ve covered a lot of direct sales and MLM opportunities. Heck, I even created a calculator to help analyze the earnings potential for each company on their own. But one thing I haven’t touched yet? The online business coach industry.
Hold up, you say. What do you mean by this? Is this an MLM?
Well, let’s take a look at how the online business coach scam works.
What is an online business coach?
An online business coach is someone who works to help individuals focus and define their business. There are online business coaches in many niches, but each follows a similar structure:
- Free webinar or online group that offers information about building a business in your niche
- A call to join the email list to get a freebie or two
- A strong call to action urging you to invest in yourself and purchase coaching
- Offer of single-session or multi-session courses aimed at helping you achieve a large amount of money online (typically “six-figures” or thousands of dollars per month)
What does the online business coach scam have in common with direct sales/MLM companies?
A lot. In fact, the FTC did a pretty good job of sharing those details in this article. But here’s the short list of similarities:
- Many online business coaches are Utah-based.
- The cost of signing up is high, typically amounting to thousands of dollars. (LuLaRoe, anyone?)
- The online business coach scam promises people will achieve financial freedom. Their told it’s “impossible to fail” and they can earn thousands of dollars per month by following a “foolproof” formula.
- Once a person signs up, they find that the course is disappointing and lacks the real information a person needs to succeed.
- The people who sign up rarely – if ever – earn money after taking the online business coach’s course.
So if it’s this obvious that online business coach scams are prevalent, why do people fall for this? Simple. People love a good story.
The Online Business Coach Origin Story
Each business coach, regardless of industry, has an origin story. And this origin story is designed specifically to make the business coach seem relatable. It’s always a tale of struggle and of being at rock bottom. Each origin story follows the same pattern. The online business coach was struggling financially. They considered other means of earning an income. Then they had a revelation: they could invest in themselves and become a coach.
What’s so dangerous about that, you ask?
The stories are designed to sell…
Whether the online business coach is telling you the truth or not, the fact is a lot of their messaging is designed to make a sale.
There’s nothing inherently wrong with this. But what’s hard to swallow is that online business coaches prey on financially insecure people.
…and target those who can’t afford the cost.
Look, we can see it from different angles. Maybe these coaches genuinely want to help people who are struggling, right?
If that were true, a lot of things would be different. For starters, their price point might be more accessible.
But much like MLM and direct sales recruiting, the online business coach focuses on selling the dream. Their pitch has little to do with reality. And worse than MLM and direct sales companies, these online business coaches are completely unregulated. Literally anyone with a .com or dot whatever can start an online business coach scam. At least direct sales/MLM companies are required to submit income disclosure statements now (even if most people ignore and “follow their dreams” instead of cold, hard facts).
Now, I’m not saying that all online business coaches are illegitimate. I’m sure there are some great ones out there. But the majority of online business coaches are running the same shady model – and most of their “students” aren’t seeing the promised six-figure results.
And that’s the online business coach scam: a motivational message, a promise of a better future, and a pull at your wallet.
How much does an online business coach cost?
The FTC has addressed this recently. Some online business coaches were charging nearly $14,000 for “one-on-one” coaching.
But most online business coaches use a scalable approach. There’s a “starter” price, typically below $500 for initial coaching. Then it gets more expensive from there, ranging from $1,200 to over $10,000 for highly specialized, niche coaching.
As you can see, the online business coach scam is a lucrative opportunity – for online business coaches. And the worst part is they try to sell you the idea that you could, too, become an online business coach.
Ask yourself: do you want to run an online business coach scam? If not, you’ll want to steer clear of their advice.
Shouldn’t it be expensive if an online business coach can really help you?
This is the logic most people apply when considering an online business coach. Of course it’s expensive, you’ll think. This person is going to help me earn six-figures and solve all of my financial problems.
Here’s the big issue: there is no regulation governing the online business coach. It’s basically the wild west.
How do you know if an online business coach is legit? There’s no certification. There’s no seal of approval. You basically sign up for an online business coach on faith. And you make a decision based on what the online business coach sells you.
And that’s always the dream of financial freedom.
It’s the same thing direct sales companies and MLM companies sell to their recruits: opportunity.
The problem with this is that opportunity is already available to you, for free.
And there are many, many other ways to improve your financial status that do not involve paying large amounts of money to start.
How can I start an online business if I don’t have an online business coach?
One of the most persuasive points in the online business coach scam industry is education. Many people are afraid to start an online business and want someone to help guide them.
Here’s something you may not want to hear: starting an online business is very hard.
It takes a ton of work.
But the good news is you don’t need to spend thousands of dollars for an online business coach.
You can learn most of what you need to know for free online.
And you can purchase eBooks or physical books on business to fill in the gaps you don’t know.
Unfortunately, the issue with this is that it’s not a quick fix. That’s why the online business coach scam is so alluring. They’re selling you the idea of a packaged, perfect formula for success. But reality is, even with effective online business coaching, you’ll need to roll up your sleeves and get to work.
Bottom line: Invest in yourself, for real.
You can’t buy an investment in yourself. You need to invest time in building yourself. Even if you choose formal education, you still need to spend time earning that education and learning beyond what you’re taught.
You can’t buy your way to instant online success unless you’re purchasing a profit-making online business. So don’t shell out thousands of dollars for an online business coach scam.
Data Junkie says
Thank you for this Ms. Bottlesoup. I first encountered this business coaching concept from long-time friend who is also a long-time rep for Pampered Chef. She reached out to my wife, and my wife expressed interest, which concerns me. I could not find anything on this at the time (this was a few months ago), so I was curious if this was yet another MLM-style play. I also questioned how this woman could have any credentials as a business coach when her only business experience was selling Pampered Chef, which is an inherently flawed business model leading to failure for 99% of those involved.
Now I see she is probably pushing a “templatized” coaching system from an MLM up-line. I am afraid to ask her about her materials, but she is soliciting participation for some in-person seminars. I don’t want to attend one only to end up sitting through yet another MLM rah rah pitch. Or worse, she uses this coaching platform to recruit folks into her Pampered Chef business!
To her credit, she formed a proper LLC for her business. But her MLM background is very likely to create suspicion about her motives. This is one of the many casualties of the MLM explosion: confusion about which home-based businesses are real and which are actually facades for endless-chain recruiting scams.
Thank you raising awareness about this new twist on the tired old endless-chain recruiting scams of our time.
Thanks, Data Junkie! The online business coach thing is tough, because there definitely are some legit businesses. But the “become an online business coach” industry is quickly becoming “templatized,” as you say, in many ways. Most of the online business coach/lifestyle coach/health coach “opportunities” come in the form of expensive courses or trainings. I’m still doing some additional research for a follow up post or two. From what I’ve learned so far, people who take these courses still need to spend a lot of cash on things like forming an LLC, advertising, purchasing a website and hosting, buying add-ons for sales funnel landing pages, hiring a designer, etc. I think the people running these courses earn affiliate income on top of the course tuition for the services they recommend.
Data Junkie says
Wow. My friend has done all of the things you mentioned (LLC, website with custom domain name, blog, professional designer, ICF training, all of it). The fact that she broadcasts to the world on social media that she has an LCC is a red flag to me. I hope she is keeping a detailed balance sheet. The ICF training alone costs ~$4K! A quick search shows that supply greatly exceeds demand in the coaching space. She has an uphill climb just to cover her costs to date.
But I remain confused as to where exactly you believe the danger lies in all of this. Is it to herself (and others seeking to become coaches)? Do you believe there is someone exploiting my friend (ICF accredited training organizations maybe?) such that she can’t make back her investment since the business coach market is already saturated?
Or is the danger to her “customers”…the folks who would pay for her services? For example, if she targets failing MLMers who are looking for ways to become profitable? When in Pampered Chef, my guess is she coached her down-line at no charge. But now she can charge for this? This would certainly not be the first time someone stood up a “shadow” business to squeeze even more money out of failing MLM reps.
Or maybe it is some combination of the two? Either way, I appreciate your thoughts on this. I remain confused whether this is the same kind of scam as MLM, or if it is just a poor investment for everyone involved.
Thank you again, Ms. Bottlesoup, for raising awareness of this as well as the many scams targeting SAHMs. You and Tracy Coenen are real heroes in the fight against home-based-business scams!
It’s similar to an MLM or direct sales company in that these online business coaching schemes sell people on the idea of financial freedom. They promise huge returns and six-figure income if you just sign up for the course. If you don’t succeed, it’s not because the program is bad – but because you didn’t try hard enough. Which is not actually true. Statistically, it’s incredibly difficult to start any business. And an online business based on selling wisdom to people is the modern day equivalent of snake oil. How do you take a course and become a reputable “online business coach” if you have no success in business? Now, your point about ICF accreditation, I haven’t looked into that. But if there is a program associated with a valid accreditation, then I would assume there’s value in that. The online business coaches I’ve observed and researched offer no accreditation. They just sell you on a dream.