5 common legal mistakes all business coaches make.

Every day I see a new business coach pop up on my Facebook news feed targeting me with ads. Unfortunately, most of these businesses have either targeted me incorrectly or their marketing plans are just way off. Having worked with a number of business coaches over the years, I have seen how the industry has failed to support
coaches in properly setting up businesses and how coaches Australia wide are constantly facing a legal and financial battle in their businesses.

The importance of being legally set up and the ramifications to your business are often misunderstood. Below are 5 of the most common pitfalls and 5 very simple tips any business coach entrepreneur can implement to avoid becoming another business coach with a failed business:

1.Have the right business structure and set up

Choosing the right structure for your business is critical for a number of reasons, including the following:

(a) It determines your risk exposures;
(b) It sets the scene for your growth goals and ambitions; and
(c) It determines your legal and financial obligations and reporting requirements.

Failing to choose an appropriate structure from the outset can impact your business’ growth plans and goals and your risk and liability exposure. It is therefore best to ensure you get the structure right from the beginning.

2.Be employee ready

Hiring employees, and at times ‘outsourcing’ work, is both a challenging and integral part of business. There are a series of key considerations to employing employees for your business. Remember just because you call a marketing coordinator, admin assistant or even another business coach an independent contract – doesn’t mean they legally are. As a result, many businesses fail to adequately prepare for employees and fail to ensure they comply with employment law intricacies such as:


(a) Worker Compensation
(b) Payroll Tax and PAYG
(c) Superannuation
(d) Workplace Health & Safety procedures and policies.


It is important to obtain both legal and accounting advice to ensure you are fulfilling your obligations as an employer.

3.Have clear and concise legal contracts and documents

Time and time again we have business coaches coming to us saying, ‘I had this agreement with a client, and they have not adhered to that agreement’.

When we ask to see a copy of that agreement, more often than not, the terms and conditions have been copy and pasted from the internet and leaves little hope for any enforcement.

Whilst you can download many legal templates online, these blanket agreements ought to be modified and tailored to the needs of your business and your contractual arrangement.

A document that accurately reflects the intentions of the parties is “worth the paper it’s written on”.

4.Protect your brand and its identity

Choosing a business name is one of the most exciting parts of developing a business. It gives your business identity, personality and allows you to develop a brand. Creating a name, logo, brand and identity in a business is critical to the
businesses success, yet often businesses fail to protect their identity. Trademarking your brand and business name can protect you against imitations and, sometimes, even competitors. It will set you a part in an industry full of copy cats.

Trade mark protection will protect your identity and, rather than facing a cease and desist letter from a trade mark holder, either upon launch or immediately following launch of your brand, you can focus on promoting and growing your business.

5.Have insurance and the right levels of cover

Insurance is an integral part of business and having the right cover and understanding your obligations under the relevant policy could be the difference between survival or death of a business in the event a claim needs to be made. Any risk which can be transferred to an insurer should, and your business should have its insurance policies independently audited at least once every three years to ensure the policies are relevant and applicable.

Remember, there is no point paying a premium for a policy that doesn’t cover or protect you and your business. As a business coach, regularly giving advice to clients, your business is highly exposed to potential claims because your clients often implement your advice which may not result in a positive outcome – this advice may be regarded as negligent advice. Be sure your business has the relevant policies in place to protect it!

At Law Squared, we partner with passionate entrepreneurs and businesses who need our technical help and expertise. We’d love to have a chat with you, so feel free
to drop us an email hello@lawsquared.co

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