How to Budget for a Business Coach: A Sydney Owner’s Guide

You’ve decided business coaching makes sense for your situation. But now you need to figure out: how much should you actually budget for this? And if you have business partners or need to justify the expense, how do you make the case that coaching is a smart investment rather than discretionary spending?

This guide shows you how to calculate an appropriate coaching budget based on your business size and goals, walks through industry benchmarks for professional development spending, and gives you the tools to justify coaching investment to yourself or others.

The Quick Answer: 1-5% of Revenue (Or 2-3% of Profit)

Industry research suggests that organisations should allocate 1-5% of annual revenue to professional development and training, depending on business size, industry, and growth goals. For business owners specifically, investing 2-3% of annual profit in coaching and development is a practical benchmark.

What does this mean in real numbers for Sydney business owners? If your business generates $500,000 in annual revenue, a professional development budget would be $5,000-25,000 per year. If you’re at $1M revenue, that’s $10,000-50,000 annually. If you’re making $2M, it’s $20,000-100,000.

Those ranges are wide because needs vary. A mature business maintaining steady performance might sit at 1-2%. A business in growth mode or facing challenges that coaching could address might invest 3-5%. The key is viewing this as an investment that should return more than it costs.

For profit-based calculations, if your business generates $200,000 in annual profit, allocating 2-3% means $4,000-6,000 per year for coaching. That’s roughly $330-500 per month. If profit is $500,000, the budget would be $10,000-15,000 annually, or about $830-1,250 monthly.

These benchmarks give you a starting point, but your actual budget depends on several factors we’ll explore.

Factors That Should Influence Your Coaching Budget

Your Business Stage and Maturity

Businesses at different stages need different levels of support. Startups and very early-stage businesses (under $300K revenue) might not be ready for significant coaching investment yet. The business needs basic traction first. A small budget ($300-600/month) for group coaching or targeted workshops makes more sense than premium one-on-one coaching.

Growing businesses ($500K-$3M revenue) typically get the most value from quality coaching. You’re past survival mode but hitting growth challenges around team, systems, and scaling. This is where investing 2-4% of revenue in coaching delivers strong returns. BGB clients typically fall in this range.

Established businesses ($3M+ revenue) might budget coaching for specific executives or divisions rather than just the owner. Total investment might be higher in dollar terms but lower as a percentage of revenue.

Your Specific Challenges and Goals

If you’re facing acute challenges that are costing you money or opportunities, budget more for coaching. A business losing $50,000 annually due to poor team performance should easily justify $20,000-30,000 in coaching that fixes the problem. The ROI is immediate.

If you’re pursuing aggressive growth goals (like doubling revenue in 18 months), budget for the support you’ll need to achieve that. Ambitious goals warrant higher coaching investment because the stakes are higher.

If you’re mainly maintaining steady performance and want incremental improvement, a modest coaching budget (1-2% of revenue) might suffice.

Your Current Profit Margins

Be realistic about what you can afford based on cash flow and profitability. If your business generates $1M revenue but only $80,000 profit (8% margin), allocating $30,000 to coaching might strain cash flow. Start smaller and increase investment as profit improves.

If you have healthy margins (20%+ profit), you have more flexibility. A business making $1M revenue with $250,000 profit can comfortably invest $15,000-20,000 in coaching without cash flow stress.

Expected ROI Timeline

Coaching isn’t an expense that pays back immediately. Budget for 6-12 month engagements because that’s how long meaningful transformation takes. Don’t expect month one to generate enough return to cover the investment—look at cumulative returns over the full engagement.

That said, good coaching should show ROI within 3-6 months that makes continuing obvious. If you’re not seeing measurable returns by month four or five, something’s wrong.

How to Calculate What You Can Actually Afford

Here’s a practical framework for determining your coaching budget.

Step 1: Calculate Your Professional Development Allocation

Start with your annual revenue or profit. Multiply by 1-5% to get a range. For $1M revenue, that’s $10,000-50,000. For $300,000 profit, that’s $3,000-15,000. This gives you guardrails.

Step 2: Assess Current Profitability

Look at your last 12 months of profit. Can you afford the coaching investment from current cash flow without creating stress? Or would you need to make other adjustments? If monthly coaching of $2,000 would strain cash flow, either budget less or commit to increasing revenue/profit first.

Step 3: Project the ROI

Industry research shows business coaching delivers a median 700% ROI (7x return). If you invest $20,000 in coaching, you should reasonably expect $140,000 in value creation over 12-18 months. That value might come from increased revenue, improved profit margins, time savings, avoided mistakes, or a combination.

Ask yourself: if coaching helps me increase profit by just $30,000-40,000 this year, does a $20,000 investment make sense? Usually the answer is yes. The break-even threshold is low because the expected returns are high.

Step 4: Factor in Tax Deductibility

Remember that business coaching is tax-deductible in Australia. If your marginal tax rate is 37%, a $24,000 coaching investment costs you $15,120 after tax. That changes the affordability calculation. Your actual cash outlay is 63-70% of the headline price, depending on your tax rate.

Step 5: Determine Your Comfort Level

Some business owners are comfortable with aggressive investment in their own development. Others are more conservative. There’s no single right answer, but don’t let excessive caution prevent you from getting help you need. If coaching could genuinely transform your business but you’re hesitating over budget, you’re probably being too conservative.

Monthly vs Annual Budgeting: What Makes More Sense?

Most coaches charge monthly, so monthly budgeting aligns with how you’ll actually pay. If you budget $2,000/month for coaching ($24,000 annually), you’re matching expense to cash flow.

The advantage of annual budgeting is that you can see the total investment and make a deliberate decision about whether it’s justified. Setting aside $20,000-30,000 for coaching feels more significant than $1,700-2,500/month, which forces you to think seriously about ROI expectations.

Many business owners do both: set an annual budget to establish the commitment level, then break it into monthly amounts for cash flow planning. For example, “We’re committing $24,000 to coaching this year, which means $2,000/month for 12 months.”

How to Justify Coaching Investment to Partners or Stakeholders

If you have business partners, investors, or a spouse who shares financial decisions, you might need to justify coaching investment. Here’s how to make the case.

Frame It as ROI, Not Expense

Don’t present coaching as “I want to spend $30,000 on a coach.” Frame it as “I want to invest $30,000 that should deliver $150,000-200,000 in value based on industry ROI data.” The investment language shifts the conversation from cost to return.

Show Specific Problems Being Solved

Connect coaching to concrete business challenges. “We’re losing $40,000 annually in team turnover and inefficiency. Coaching focused on team development should reduce that by at least half, which pays for itself plus delivers net benefit.” Specific problem-solution framing makes the value obvious.

Propose a Trial Period

If partners are sceptical, propose a three-month trial. “Let’s invest $6,000 for three months of coaching. If we don’t see measurable progress by then, we stop. If we do see results, we continue.” This reduces risk and builds confidence.

Use Industry Benchmarks

Point to research showing that 86% of companies saw ROI on coaching engagements, and the median return is 7 times investment. Show that professional development budgets of 1-5% of revenue are standard practice in well-run businesses.

Highlight the Cost of NOT Getting Help

What’s the opportunity cost of staying stuck? If your business has plateaued for two years, what’s that costing in missed growth? If you’re working 65-hour weeks because you can’t delegate effectively, what’s that costing in burnout risk and quality of life? Often the cost of inaction exceeds the cost of coaching.

Common Budgeting Mistakes to Avoid

Mistake 1: Choosing Based Only on Cheapest Option

A $1,000/month coach who delivers no results is more expensive than a $3,000/month coach who helps you add $100,000 in profit. Don’t optimise for lowest cost—optimise for best value and ROI.

Mistake 2: Not Budgeting for Full Engagement Duration

Coaching takes 6-12 months to deliver full value. Budgeting for three months and then running out of budget creates incomplete results. When you commit to coaching, budget for the full journey.

Mistake 3: Skimping on Quality to Stay in Budget

If you can only afford $500/month for coaching, you might be better off saving for a few months until you can afford quality coaching at $1,500-2,000/month. Budget coaching rarely delivers the transformation you need.

Mistake 4: Not Tracking ROI Against Budget

Set clear metrics when you budget for coaching. What improvements would justify the investment? Track those metrics monthly so you know if you’re getting value. If you budgeted $24,000 expecting $80,000 in profit improvement, measure whether that’s happening.

What If You Can’t Afford Your Ideal Coach Right Now?

If the coach you want charges more than you’ve budgeted, you have options.

Increase Your Budget: Can you cut other expenses or find additional revenue to afford better coaching? Sometimes coaching itself helps you create the money to pay for it.

Start With Group Coaching: Many coaches offer lower-priced group programmes. BGB’s Elite programme includes both group and one-on-one elements at a mid-tier price point, making quality coaching more accessible than pure one-on-one.

Delay and Save: If you need a few months to build up cash reserves to afford the right coaching, that’s OK. Better to wait and get quality coaching than settle for budget options that don’t deliver.

Look for Payment Plans: Some coaches offer payment plans that spread costs over time, making higher investments more manageable for cash flow.

The Bottom Line: Budget Based on Value, Not Just Affordability

The right coaching budget balances what you can afford with the value you expect to receive. Industry benchmarks suggest 1-5% of revenue or 2-3% of profit, but your specific situation might warrant more or less.

Don’t let budget constraints prevent you from getting help that could transform your business. At the same time, don’t overspend on coaching that’s not matched to your needs. Find the level that delivers strong ROI without creating financial stress.

Most importantly, view coaching as an investment with expected returns, not as discretionary spending. When you budget $20,000-30,000 for coaching and it helps you add $100,000-200,000 in profit over 18 months, that’s one of the best investments you’ll ever make in your business.

Book a Quick Fit Call with BGB and we’ll help you think through what investment level makes sense for your situation and what returns you should expect.

Related Reading:

• How Much Does Business Coaching Cost in Sydney?

• Is Business Coaching Worth the Investment?

• What Factors Influence Coaching Fees?

• Professional development budget research: OneRange, American Express Business

• ROI data: International Coach Federation studies

• Industry benchmarks: 2024-2025 coaching industry analysis