Five red flags to look out for when signing up for business coaching

Thinking of paying someone for business coaching? Here are five red flags to look out for before handing over your money – and what to do if you aren’t happy.

We recently explained how the business coaching industry seems to have become more and more like a pyramid scheme.

So how can you spot a potential business coaching pyramid scheme? And what can you do if you are not happy with a programme you gave signed up for?

In this article we share five red flags to watch out for, advice on how to find an ethical business coach, what you need to do before signing a contract, and what to do if you think you have been miss-sold.

Five red flags to look out for when signing up for business coaching

So how can you spot a a business coach you may want to avoid? One who may be operating a pyramid-scheme-style business model? Here are five red flags we have noticed and been told about.

1) They use conflict to gain trust

If you see someone posting about something horrible someone has said to or about them, or has done to them, it could be a sign they are using virtuous victim signalling to lure you into a pyramid scheme. Especially if this is a repeating theme in their content.

Most professional people don’t gain enemies going about their work. And if they do encounter unpleasantness they are able to deal with it without the need to broadcast the slight and gain sympathy, or use it for engagement.

2) They use attraction marketing

Be wary, too, of anyone using attraction marketing. If they share photos of their holidays, work trips, home life or material possessions on social media, ask yourself why. Would you hire a mortgage adviser after seeing photos of their summer holiday? No. In fact, you’d find it odd and incongruous that they shared such personal photos as ‘marketing’.

This is a strategy taken directly from MLMs, and is used because their offering doesn’t sell itself, or doesn’t stand up to scrutiny. So rather that sell the features and benefits of their product, they seduce you with the promises of an enviable lifestyle.

You should never hire anyone because they show off their (apparent) wealth. Hire them because they are good at what they do, charge an amount you can afford, and provide good customer service.

Most of the brilliant, talented and highly successful people we have worked with and know have a relatively modest lifestyle and certainly don’t need to present the illusion of lottery-win levels of wealth to secure clients. Their money is privately and savvily tied up in investments that may not make great social media posts, but that will give them a healthy return in the future.

3) They have a pack of blindly loyal fans ready to defend them

In pyramid schemes, the people at the top use emotionally manipulative tactics to seduce people into the opportunity and keep them there, and to silence any critics. And we’ve seen this used in business coaching too.

So, if a business coach has an army of loyal fans who will do anything – including attack perceived enemies – for them, or if their sales strategy is to make you feel like they are your friend, be wary.

Business is business. Yes, people should always be friendly and honest, but you don’t hire a business coach because you are looking for a friend. And you should always be able to view everyone in an objective light.

4) They make earnings claims

Both the MLM and the business coaching world are fond of making dramatic income claims. Not only is this tasteless, but it’s also not necessarily true. (Even if someone turns over over multiple figures, it doesn’t mean that this is profit.)

We are always put off by someone claiming to earn six/seven/eight figures, or talking about how they ‘manifested’ extreme wealth. If a business coach claims to have run businesses before, or turn over a certain amount of money, you can always check them out on Companies House. It’s also worth Googling their name and ‘director’ to see if there’s any news about them.

We’ve seen coaches claiming to have run or sold successful businesses, but one check on Companies House shows that not to be true. We’ve even found business coaches with more than one business that has gone into liquidation with huge debts, and one who was struck off from being a director because of fraudulent behaviour!

These are facts that are all easily found online if you do a bit of research before trusting their marketing promises.

We have worked with a number of business coaches and consultants over the years, and not one of them has made income claims, or posted a photo of them in business class or sipping a cocktail in an infinity pool. What they have all been though, is excellent at what they do.

5) They use free or cheap events to seduce you

Pre-Covid, one of the most popular tools business coaches used to recruit people were events. These would often be free or very low cost to attract as many people as possible. You’d attend with the promise of learning, but the learning would be secondary to the real motive – selling places on their courses and programmes.

This can be a powerful way of getting sign-ups, as coaches can use emotional persuasion and even hypnotic tools to seduce you, and create scarcity and FOMO by encouraging you to sign up on the day. This gives you no chance to go away, engage your logic, and properly consider what you are getting and whether it is what you need right now (and whether you can afford it).

A classic is having a table to sign up at the back of the event space, or in another room and having a rush of people make their way to it. Or encouraging you to miss lunch and sign up instead (sometimes positioned as proof you are really committed).

This video shares some of the common tactics to watch out for:

How to find an ethical business coach

Not every business coach is unethical – far from it. There are plenty of ethical, highly experienced people offering excellent business coaching, mentoring and training. But it is important to be aware that there are people out there making persuasive promises they know they’ll never deliver on – and who will happily take your money.

So how can you find a business coach to work with who isn’t likely to drag you into a pyramid scheme? There’s no foolproof method or checklist, but if you avoid the red flags above, you should have some protection.

It is important to always take your time to check someone out before parting with your money. See how they act and what they post on social media. Join their mailing list and read their blogs. Ask yourself whether they share and display good business practices and advice – and not just sales tactics. And ask the questions we share here.

Never be seduced into joining a programme NOW because they’re offering an amazing, time-limited deal. Pause and do your research before committing. If their programmes are good, they’ll open the doors again, and you can join (or not) after making sure you’re not paying money for nothing.

ALWAYS read a contract before signing

Also, check the terms and conditions of your contract with them before parting with your money or signing anything. Make sure it specifies EXACTLY what you will get (including number of calls, duration of calls, content of training and outcomes). If it does not, ask for written confirmation from your coach before signing up. Do not rely on verbal promises – you could regret it later.

Also check your rights on cancelling. What happens if your circumstances change, or you discover that the programme isn’t quite what you hoped? Again, always make sure you get any verbal promises in writing.

Once you have paid your money or signed up to a payment plan, you are legally committed and reliant on the goodwill and integrity of the coach if you wish to cancel. And a very charming coach can turn nasty if challenged on the quality of their offering, or refuse to release you from their programme, whatever your circumstances.

If you refuse to pay the remainder of your payment plan, they may take you to court. And if they have a legally binding contract, you could end up losing.

This is an issue that has emerged a number of times with people who have been in touch with us after a bad experience with a coach, and came up in a podcast we recorded with a lawyer on coaching contracts.

Remember that you have a responsibility to yourself to check that you are absolutely certain about what you are getting before signing a contract and committing to paying someone money. And to make sure that you have it in detail in writing.

What happens if you aren’t happy with your business coach?

If you sign up for a business coaching programme and aren’t happy, what can you do? Your first port of call should be the contract you signed, or written details sent to you. Has the coach delivered on what they promised? Or do you feel you have a case for a refund?

If you are in the UK, we recommend following this advice from the Citizen’s Advice Bureau:

  • Make a formal complaint to the coach or the company you bought the training or programme from, explaining why you would like a full or partial refund, or wish to stop your payments.
  • Check if the coach is a member of any trade association and contact the association if they have violated their standards.
  • Ask your card provider or PayPal to help – they may be able to help you get your money back.
  • Check if you can use ‘alternative dispute resolution’ (ADR). This is unlikely with coaches as they need to sign up to it, but it is worth looking up.
  • Make a claim in the small claims court. This can be stressful and time-consuming, but could be worth doing if you have paid them a large amount of money and you believe they have not delivered on their contractual requirements.

If you are not in the UK, you can still follow this process ,or a similar one, in your country.

Watch out for the red flags and avoid giving the wrong person your money

Of course, the best way to avoid needing to battle for your money back is to watch out for the signs that a coach may not be what you are looking for, and avoid committing and paying them run the first place. So please do watch out for the red flags we have listed here, and the warning signs in this article.

Photo by Jaime Lopes