The Difference between Consulting and Coaching

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The Difference between Consulting and Coaching

One of the most common questions I receive when I talk about starting your own Alpha 2.0 business based around a service (instead of selling products or information) is the difference between consulting and coaching. A lot of guys are confused about this and I admit that sometimes the distinction is not very clear. 

-By Caleb Jones

Allow me to do my best to clear this up.  

What’s the Difference? 

The bottom-line definition or difference is this: consulting is when you provide advisory services to a company or organization. Coaching is when you provide advisory services to individuals, usually (but not necessarily) one at a time. 

A consultant is someone who helps organizations become more effective as organizations. They focus on techniques that apply to teams or groups of people, large or small. All of their services are calibrated toward that specific objective. 

Coaches, on the other hand, focus on helping particular individuals become more effective as individuals. All of the techniques and/or processes they teach revolve around what an individual is capable of doing all by himself. 

Now here's where the line gets a little blurry. Let’s say you’re a coach, and you only coach high-end business owners or CEOs. Wouldn't many of the techniques you teach your clients apply to organizational levels and problems?  

The answer is yes, but those techniques are still implemented by a single individual managing these groups of people. If you are advising a single, individual person, you are a coach, even if that person runs a company of 5,000 other people. But! If you start working with that person's management team, now you're a consultant. It’s because now you're working with a team to produce team results. 

Who Makes More Money? 

The next point of confusion I see a lot of men experience is they assume coaches don't make that much money, while the big money is in consulting. Statistically speaking this is true in that consultants have a much higher ceiling on their income than coaches in most cases. However, there are plenty of exceptions to this. I know guys who are coaches who make seven-figure incomes. They simply niche toward very high-income and/or high net worth business owners, entrepreneurs, and/or executives like CEOs.  

Is it easier to get to the high income fast as a consultant than a coach? Yes. This is because of:

1. The larger budgets companies have versus what individuals have (again, barring the high-income folks I mentioned above).

2. The fact that you can generate a lot more value-added for companies than you can for most individuals. A good consultant can save a company literally millions of dollars. Hard to do that for an individual person.

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In my case, I've done consulting for over two decades and I've done a lot of coaching as well. I have made a decent amount of money coaching over the years, but to be honest, this money pales in comparison to the sheer amount of money I have earned consulting for organizations rather than coaching for individuals. 

Which Should You Be? 

So, should you be a consultant or a coach? That depends on your skill set and interests. 

Some guys are very good at helping individuals, one on one. Other guys are more macro or big picture thinkers and operators. If you're better at one-on-one focusing on individuals, maybe be a coach. If you’re more of a system thinker or big picture thinker, you should probably be a consultant.  

Neither of those conditions are absolute though. People who are skilled at one-on-one can make excellent consultants and people who are very proficient big picture thinkers can make great coaches. You probably have a pretty good idea already of which of the two you would rather be, or which of the two you would be better at doing. 

And, as always, you must specialize. As an Alpha 2.0 Business owner you must niche. It is extraordinarily dangerous to start a business as a coach and declare yourself as some kind of generic life coach. Stupid. That will make it extremely difficult to get clients, maintain clients, position yourself in the marketplace successfully, and charge decently high prices. Instead of being a coach you should be a coach that focuses on one specific area like fitness, time management, dating, real estate, investing, or whatever.  

The same goes for the consultant. It is difficult to be a generic business consultant who just does “business consulting” or “helps businesses. Focus on one specific area where you can help your clients (meaning companies or organizations) increase profitability or reduce problems.  

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Can You Do Both? 

While it’s not mandatory, the creative Alpha Male 2.0 entrepreneur with a more mature business will look for opportunities to do coaching and consulting, using each of those two things as separate profitable income streams in his business. There's no reason to limit yourself to 100% consulting or 100% coaching unless you absolutely love doing nothing but one or the other 

A good strategic plan for the Alpha 2.0 Business owner is to start with a consulting or coaching business then make a long-term or medium-term plan to add another income stream that represents the other (coaching or consulting). However, you would not want to do both of these things at the start. It would be a huge mistake to start a consulting practice and also do coaching or start a coaching business and also do consulting. Attempting both will dilute your focus and make it even harder to get your new business off the ground. 

So, make sure that you focus on one offering at a time. Get very good at one thing. Get good at addressing the needs of your niche. If you are a consultant, get very good at improving the condition of companies or organizations. If you are a coach, get very good at enhancing the lives of your individual clients in precise and quantifiable ways. Once you have a nice, strong income stream of serving either clients or organizations, then you can look at adding a separate income stream to your Alpha 2.0 business (and should!). 

The Six Figure Location Independent Consultant Course goes on sale tomorrow! Also tomorrow I will do a FREE live webinar on how to be successful as a location independent consultant at noon PST on June 18th, with a live Q&A at the end. Click here to register and join us. 

This article was originally published on June 17, 2020

Comments


  • Leon 2020-06-17 21:59:07

    I always feel that coaching an individual is less ''scary'' than consulting a whole team/company, at least when you first start. It's similar to dating, you often feel more confident when opening an alone girl vs a group of girls. Therefore, consultants usually get higher status and more respected than coaches. Is that correct or just SP? Also, you should tell your staff to automatically email the recorded webinar link to anyone who has registered, or at least have a centralized place for all of them. Many people are interested in your webinar's content, especially the Q&A, but unable to join (due to commitment or timezone issues). Having a chance to catch that webinar for those still on the fence will definitely boost sales.

  • Dandy Dude 2020-06-18 05:40:44

    Interesting. Never thought about the distinction between the two, and in my area (image consulting) everyone calls themselves a consultant, even though 90% of them actually do what you call coaching.

  • Blackdragon 2020-06-18 09:39:59

    Therefore, consultants usually get higher status and more respected than coaches. Is that correct or just SP?
    That is generally correct, yes (with exceptions of course). But if you're Alpha Male 2.0 you shouldn't give a shit about respect. From anyone.
    Also, you should tell your staff to automatically email the recorded webinar link to anyone who has registered, or at least have a centralized place for all of them.
    That might be a good idea. I'll consider it.
    in my area (image consulting) everyone calls themselves a consultant, even though 90% of them actually do what you call coaching.
    Yes, some industries are like that, specifically because "consultant" sounds classier than "coach." 🙂

  • K 2020-06-18 23:14:42

    Interesting. My understanding has been that consulting is about providing/presenting  solutions to your client (whoever they may be and whatever problem at hand) while coaching refers to guiding, especially by asking questions, that will enable the client to come up with solutions best suited for themselves on their own.

  • Blackdragon 2020-06-19 09:08:49

    Interesting. My understanding has been that consulting is about providing/presenting solutions to your client (whoever they may be and whatever problem at hand) while coaching refers to guiding, especially by asking questions, that will enable the client to come up with solutions best suited for themselves on their own.
    The problem is both of those descriptions can be applied to the other (consulting or coaching). Business vs individual is a more clear distinction.

  • K 2020-06-19 10:24:34

    I’m an individual. If I need legal advice, I need a legal consultant - I don’t expect to be coached. I need an expert who’ll tell me what options I have. I’ve never heard of a legal or accounting coach. I like your definition (you can’t coach a business, after all) but it obviously isn’t 100% clearcut either...