Starting a life coaching business is an exciting and challenging time. You invest so much of yourself into your business and so it is important to protect it by considering key factors, such as:
- protecting valuable intellectual property (IP) you develop; and
- protecting your brand.
This article outlines important tips to ensure you cover all of your bases to protect your life coaching business.
Payment is, of course, a key concern in any business. Problems can arise when clients pay in installments or services are provided and clients pay later. If a client forgets to pay for your services, following up payment is a time consuming and frustrating process. There are various payment models you may wish to use for your life coaching business.
Payment Up Front Model
The ideal model is to require your clients to pay up front, before you provide your services. To do so, you should have specific legal terms in place. Such terms should state that you will not offer your services or any material unless you first receive payment. The payment up front model is common for one-off services. For example, a one-off service may include an ongoing course where the total cost is small enough for a one-off lump sum by your clients.
Deposit and Balance Later Model
For higher value services, where it is not feasible for clients to pay the total cost in a one-off lump sum, use a model requiring a client to pay an initial deposit and then pay the remaining balance later. You may use this payment model if you have established, corporate clients, especially if you work closely with the business and provide assistance on larger projects (such as change management).
Monthly Subscription Fees
This model works best if you have materials, such as guides, that you can send to clients on an ongoing basis. Clients might pay subscription fees to tune into your regular webinars, receive daily motivational emails or get a certain number of one-on-one consultations with you per month. This model should involve a combination of great payment systems and legal terms.
Regardless of what payment model you choose to use, your legal terms should state that:
- clients must pay your subscription fees to access the subscription services; and
- you reserve the right to suspend or terminate a client’s account if they fail to pay.
Protecting Your IP
It is absolutely essential to protect your IP in any materials you create, including methods, training videos or guides. To do so, you should understand the difference between assigning and licensing your IP.
If you assign your IP, you transfer it to another party. You no longer have any rights to the IP. It is similar to selling a bike on eBay. Once the bike is sold, you no longer own it. Therefore, it is best never to assign your IP to clients.
Rather than assigning your IP to clients, you can provide them with a licence to use your IP. Licensing, rather than assigning your IP rights, provides clients with permission to use your materials without transferring your IP to them. For example, your clients can watch your training videos without owning the rights to the videos. You should ensure that your licence is specific. For example, your licence may state that clients can use the materials for their own personal and non-commercial use. If your licence is not specific, clients may use your material for other purposes and in ways you may not expect, intend or want.
Protecting Your Life Coaching Business’ Brand
Your brand is how potential clients recognise your business. Therefore, it is important to protect it. You can protect your brand by registering a business name or trade mark. Both options protect your brand in different ways.
You can register your business name with the Australian Securities and Investments Commission (ASIC). Doing so identifies your business within the marketplace. As your business name will appear on ASIC’s business name register, it may prevent others from registering the same or a similar business name. Registering your business name satisfies the legal requirement to have a separate business name if you are not operating under your personal name.
If you already have a business name and logo, you should register both as trade marks through IP Australia. A registered trade mark differentiates your life coaching business from others and provides you with exclusive rights to use your business name and logo for your life coaching services. Trade marks are financial assets and, as they are IP, can be assigned or licensed.
When starting a life coaching business, you should consider payment methods, how to protect your IP and how to protect your brand. Having well-drafted legal terms and a seamless payment system is extremely useful. You should understand the difference between assigning and licensing your IP rights. It is also important to register your business name with ASIC and also register your business name and logo as trade marks for exclusive rights.
If you have any questions or need legal advice on starting your life coaching business, get in touch with LegalVision’s business lawyers on 1300 544 755, or fill out the form on this page.
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