Mark Nagel by Mark Nagel

Working as a health coach or exercise professional provides the opportunity to positively impact the health of others. While this can be tremendously fulfilling work and sometimes feel like its own reward, it’s important to determine the best way to earn enough money to keep your business thriving so that you can continue your work. You may choose to become an employee and work for others, or you may decide to start your own business. Working for yourself can present opportunities to have more control over your career and potentially make more money, but, before you make the decision to strike out on your own, let’s discuss what it takes to establish your own business, big or small.  

“Starting a business” can mean just about anything in our modern world, from purchasing land and building a brick-and-mortar training studio, to renting space in an existing facility where you can coach or train your clients, to purchasing equipment to set up a studio so that you can teach group fitness classes from home. The point is, while each unique business will have its own risks and rewards, it’s important to consider every step required when setting up a business to ensure you are matching your resources and abilities with your goals. Let’s walk through the process of establishing a business step by step. 

Initial Considerations 

As part of the initial planning, it’s essential that you conduct market researchdefine your personal brand, determine how you will deliver your services as a health coach, personal trainer, or group fitness instructor (i.e., in-person, virtually or a hybrid of the two), identify your target market and learn how to promote your services

All of these decisions will be very different depending on what type of business you will be operating. For example, a brick-and-mortar gym owner will have to consider location, their marketing footprint, how customers will be reached and whether investors will be needed to provide initial or ongoing capital, while a health coach establishing an online business will have very different concerns, including software options, packaging of services, and how to price offerings to account for face-to-face client time and all that must be done behind the scenes.  

Business Structure 

Once the idea for the business has been researched and developed, the entrepreneur needs to consider what type of business structure will be employed and how best to plan for the short- and long-term success of the organization. Each type of business structure retains certain legal and financial advantages and disadvantages. Even if the business will operate only part-time or as a “hobby,” there are a number of liability and tax concerns that directly impact the business owner. Unfortunately, many entrepreneurs fail to consider the legal ramifications of their business activities. 

The vast majority of for-profit businesses in the United States operate as sole proprietorships. As the name implies, a sole proprietorship is a business owned and operated by one person. Since the individual owner operates the business, extensive meetings to determine strategy and company direction are not necessary, as the owner can simply make decisions. Creating a sole proprietorship does not require any formal paperwork, and there is minimal ongoing paperwork necessary (compared to other business types) to sustain the business. However, financial losses and liabilities are also the sole responsibility of the owner. In a sole proprietorship, there is no corporate veil that shields the actions of the business from the personal responsibility of the owner, even if the owner conducts business under a different company name. Delinquent debts and successful lawsuits against the business can result in the owner being required to sell personal assets to pay the judgment. 

Two or more people who agree to operate a business and share profits and losses may form a partnership. Although partnerships may be created without filing paperwork, any partnership should have legal documents that establish the rules of operation. This agreement should clearly define and explain the structure for authority, the partners’ rights, expected performance and contributions from each partner, buy-out clauses, income distribution and responsibility for debts. The potential legal concerns in a partnership are the same as in a sole proprietorship—business liabilities become personal liabilities. 

In general, a business should be distinct from the individuals involved. There should be no mixing of personal and business funds and the business should maintain its independence. Creating the business name and securing appropriate intellectual property protection, establishing the business with required licenses in pertinent jurisdictions, opening a business bank account and keeping separate business records are very important to establishing the business as a stand-alone entity. 

To better protect the individuals who have started a business from personal liability, a number of alternative business structures can be employed. ACE’s various certification textbooks cover business structure in detail, but the following table provides a brief description of major business types and the main issues concerning liability and tax treatment: 

Advantages and Disadvantages of Various Business Structures




Sole Proprietorship
  • Easily created and managed
  • Flow-through taxation
  • Personal liability
  • Raising capital
  • Easily created
  • Flow-through taxation
  • Potential management dispute
  • Personal liability (except limited partners)
  • Flow-through taxation
  • Limited liability
  • Limited number of potential investors
  • Costs of formation and operation
  • Flow-through taxation
  • Limited liability
  • Operating standards not defined in all states
  • Limited liability
  • Unlimited number of investors 
  • Cost of formation and operation
  • Double taxation

In some cases, an entrepreneur may wish to purchase a franchise from an established company. The franchising model is based on the principle that local business owners will have greater success connecting their outlets to the local communities and more commitment to making them successful if they have an ownership stake in the business. A franchisee (the owner of a franchise) has the right to use an established brand name, trademark, logo and business model. These individuals benefit from being associated with a recognized brand and a central franchising organization that provides operational and marketing assistance. A franchisee can purchase a specific location or the rights to open a number of locations for a specific market. The expectation is that the franchisee will meet certain financial requirements to make an investment in an individual franchise. Most franchise operations charge an individual franchisee an upfront fee and annual fees of a percentage of revenue earned from the business. There are other costs associated with owning a franchise, including the cost of purchasing operational and retail products through the franchiser’s business structure. 

Insurance Coverage 

Regardless of business structure, health coaches and exercise professionals should maintain business and personal liability insurance coverage. This is always important, but becomes even more important as the revenues and profits of the business increase. Unfortunately, potential plaintiffs and their lawyers often “target” successful businesses, since there is a greater likelihood of “winning” a substantial financial reward. Though most trial attorneys will agree to work on a contingency fee basis, some unscrupulous attorneys will take meritless cases simply with the hope that they will be “successful” in convincing a judge or jury that their client deserves compensation. Insurance protection provides some peace of mind, as entrepreneurs can be secure in the knowledge that if someone were to be injured as a result of their actions or if a meritless lawsuit were to occur, insurance coverage would be adequate to recompense that individual for his or her losses. The ACE insurance program offers discounted coverage that can protect you and your business in the even you are ever sued for injury or damages.  

In Conclusion 

Ultimately, not every business will succeed, but profitable businesses typically are created with well-researched marketing, financial, legal and risk-management (i.e., insurance) plans. The rewards of owning a successful business extend far beyond personal income, as most successful entrepreneurs report that being their own boss and finding ways to navigate a competitive marketplace provide a level of satisfaction that working for another person or company could never duplicate.