Do you need an LLC to start your coaching business? What about contracts—do you really need one for every client? And how do you handle taxes without getting a nasty surprise from the IRS?

If these questions have been stressing you out, you’re not alone.

Most new coaches have no idea how to legally set up their business—but getting this right from the start will save you SO many headaches later.

So today, I’m breaking it all down—business structure, contracts, taxes, and everything you need to start your coaching business the RIGHT way. Let’s get into it!

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Hey there, I’m Moriah Riona, an award-winning luxury brand designer, luxury branding coach, and the host of the Superbloom Coach Podcast, and this is Superbloom Coach Presents: The Ultimate Guide to Starting Your Life Coaching Business!

Every single day this month, I’m walking you step by step through everything you need to build a legitimate and successful coaching business.

If you haven’t grabbed the free workbook yet, head to moriahriona.com/workbook or click the link in the description! It’s designed to help you take action on everything we cover in this series.

Before we dive in, quick disclaimer—I’m not a lawyer or an accountant, and this is not legal or financial advice.

I’m here to share some basic tips for setting up your coaching business the right way, but please be sure to always consult a professional to make sure you’re covering everything correctly for your location and business needs.

Alright—let’s get into it!

Step 1: Make It Official – Choosing a Business Structure

Before you sign your first client, before you take your first payment, and definitely before tax season rolls around—you need to decide on a business structure.

But what is a business structure, and why does it even matter?

Think of it as the foundation of your coaching business. Your business structure determines:

How you pay taxes

What legal protections you have

How professional your business looks to clients

Without a legal business structure, you’re just a person making money on the side. And that can lead to problems—from tax issues to legal risks to clients not taking you seriously.

So let’s break down the three most common business structures for coaches—and which one is best for you.

Sole Proprietorship: The Easiest, But Most Risky Option

What it is: A sole proprietorship is the default business structure. If you start charging for coaching but don’t formally register your business, congratulations—you’re automatically a sole proprietor.

Why people choose it: It’s the easiest and fastest way to start. No paperwork, no fees—you just start taking payments. (You’ll usually just set up a DBA (or “Doing Business As” for your Sole Prop to get a business bank account, etc.)

The downside: There is no legal separation between you and your business. That means if a client ever sued you (even if it’s unlikely), your personal assets—your savings, car, even your house—could be at risk.

Taxes: All of your coaching income is reported on your personal tax return. There are no tax benefits compared to other business structures.

LLC (Limited Liability Company): A Great Option for Many Coaches

What it is: An LLC creates a separate legal entity for your business, which means your personal assets are protected (to a certain degree) if something goes wrong.

Why people choose it: It adds legitimacy to your business—forming it as a formal separate entity, and you have more legal protection if someone ever tries to sue you.

Taxes: By default, an LLC is taxed just like a sole proprietorship—but you have the option to file as an S-Corp later to save on taxes as your business grows.

The downside: There’s a small cost to set it up, and depending on your state, you may have to file annual paperwork.

S-Corp: A Tax-Saving Upgrade

What it is: An S-Corporation isn’t actually a business structure—it’s a tax election that you can file as an LLC or Corporation.

Why people choose it: It reduces self-employment taxes, which can save you thousands of dollars once you’re making $50K+ per year in profit.

The downside: More paperwork, stricter tax requirements, and you have to pay yourself a reasonable salary through payroll.

Which One Should You Choose?

Well, you should definitely consult your tax advisor and/or lawyer to help you decide. 

I’ve actually used all three of these structures in my many years of entrepreneurship. Over the years, my business structure has changed as my business has grown and evolved.

I just want you to know that many coaches I talk to feel super intimidated by this whole concept of choosing a business structure—because it seems so serious. But I want you to know that this should be something that’s holding you back from getting started! Talk to your lawyer or tax professional today to choose the best option for your business.

Step 2: Get a Business Bank Account & EIN

Once you’ve chosen your business structure, the next step is to separate your business and personal finances.

Again, speak to your accountant, by typically that means getting an EIN (Employer Identification Number)—which is like a Social Security number for your business—and opening a business bank account.

Even if you’re a solo coach, having separate accounts makes tax time easier and keeps your finances clean and professional.

Step 3: Protect Yourself with Contracts

Contracts might not be the most exciting part of your business, but they’re a non-negotiable.

A good coaching contract protects you and your clients, making sure expectations are clear from the start.

At the very least, your contract should cover:

 Payment terms – How and when clients pay you.
Cancellation & refund policy – What happens if they want to cancel or reschedule.
Scope of services – What’s included (and what’s not).
Legal disclaimers – Making it clear that coaching is not therapy, medical advice, or legal consulting.

If the word ‘contract’ seems scary or overwhelming to you—don’t worry. I’ve linked some of my favorite contract templates, specifically for coaches, in the description. These include:

Coaching Contract Template

Terms & Conditions Template

Mastermind Agreement Template

Assistant Coach Template

And more!

When you’re just starting out (or even for seasoned coaches), a legally reviewed contract template is a great option! It’s the easiest way to make sure you’re protected without having to hire a lawyer right away.

Then, once you get your contracts figured out, you’ll need a way to send them to your clients and have them sign. (And believe me, you don’t want to waste time mailing them back and forth).

So I use Dubsado. This is my go-to CRM (Client Relationship Manager) for handling contracts, invoices, and client onboarding—all in one place. 

It makes everything automated and professional. Check out my link in the description and use code “moriahriona” to receive 20% off your subscription.

Step 4: Understand Taxes & Set Aside Money

No one loves talking about taxes, but as a business owner, you need to be prepared.

Unlike a traditional job, no one is automatically withholding taxes for you—so you need to set money aside for self-employment taxes and income taxes.

A good rule of thumb? Set aside 25-30% of every dollar you make for taxes, so you’re not hit with a big bill later.

And of course—talk to a tax professional about what’s best for your specific situation.

Now, it’s not all bad news when it comes to taxes… really!

One of the best things about being a small business owner is that you get to deduct expenses from your business. Depending on the situation, this could be first class air travel, your phone, your home office, and a lot more!

Claim things that are actual legitimate deductions—because nobody wants to be audited by the IRS. So just be sure to talk to your accountant. They should be able to guide you through all of your eligible deductions.

And to that point, I want to share a story from my early days of business.

One of the FIRST things I outsourced in my small business was hiring an accountant. After two years of doing tax returns on my own (and ending up in tears both times), I finally decided to hire a professional.

But why had I been dragging my feet for so long? Because I didn’t want to spend the money.

Can YOU relate??

This is a common theme I see—especially among newer business owners. They think they can do everything on their own… to “save money.” Without realizing how much the DIY approach is actually costing them.

The truth is I ended up spending several hundred dollars to hire my first accountant (and that’s when money was really tight), but HE ended up saving me several thousand dollars in deductions that I wasn’t even aware of.

This is how outsourcing actually MAKES you money. Stay in YOUR zone of genius and hire others to work in theirs!

We’re going to get into this even more later in this series.

Step 5: Get Business Insurance (Optional but Highly Recommended)

I personally think anyone running a small business should have business insurance to protect themselves in case of disputes or legal issues.

Check your local regulations, because it may or may not be required for all coaches, but regardless it’s something to consider, especially as you grow your business and start working with more clients.

Now, I know the legal side of business can feel intimidating or overwhelming, but don’t let it stop you from launching your dream coaching business.

So, now that your coaching business is legally legit, let’s talk about the tech and tools you need to actually run it.

Because in tomorrow’s episode, I’m breaking down the best software and tools for your coaching business—from scheduling and payments to client management and automation.

Make sure to subscribe, download the workbook, and I’ll see you back here soon.

And if this lit a fire in you today, help me spread that spark—like the video or leave a review on Apple Podcasts. It’s a small thing that helps in a big way.

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