Is the Coaching Industry a Pyramid Scheme? Setting the Record Straight Once and for All [Ep 64]

Welcome to the Thriving therapyneur podcast. The show for ambitious therapists who are ready to unapologetically make more money, scale their impact and build their dream coaching business. I'm Carly Hill, therapist turned coach turned CEO of a seven figure online business. I created the Thriving Therapeutic podcast because I'm obsessed with helping big hearted therapists outgrow the office and build successful and sustainable online businesses. So if you are wondering how you can continue to make an impact without sacrificing the life you love, welcome. Therapeneur. This is exactly the place for you. Think of it like the business school we never had. I am so excited to dive in with you. Let's get started. Hey everyone, it's Carly Hill, your host. I am so glad you're here today. We're talking about something juicy, maybe a little spicy. It's something that I have made social.

Media posts about in the past.

It's definitely come up. And recently in the past week, my team member flagged me and she was like, carly, I don't know what's up.

But five people to be exact have.

Been asking me, is Carly going to take a percentage of my revenue? Is this a mlm? This seems like a pyramid scheme. Is the coaching industry a pyramid scheme? That's what we're covering today. We're going to talk about criticisms, the nuance, the bullshit, the beauty. I am going to pull back the curtains on what this industry really is, why people say this, that coaching is a pyramid scheme or MLM or feels like it. What I believe about the situation and how to build a truly ethical, sustainable coaching business that's rooted in transformation, not manipulation. So let's dive in. Let's start with the why. Why do people even ask the question, is coaching a pyramid scheme? Because it's a common thing I hear all the time. And maybe you have wondered that in your head as well. But a pyramid scheme encourages existing members to pay to join, then promote and sell the same offer to others. So you're bringing in new recruits and then distributors are paid a percentage of the recruit's sales. Coaching is not like this. Coaching is a service to help people enhance their lives. It's actually the opposite of this. Coaches who get a continued commission from their clients. That's a sleazy revenue share business model in my opinion. I would run if you see this. However, I do think it's smart to have a referral program, but that's totally optional and radically different from being forced to recruit others. So why does this feel like a pyramid scheme? Because many coaches talk about their income and they say, hey, if you get coached by me, you can make money too. But people are seeing that as recruiting, and I have to strongly disagree. People make poor spending choices every single day. But scrutinizing someone for investing thousands in personal development, in their health, in their relationships, their business, that is something I will never understand. I would like to think that people can spend their money. How they choose their big girls, their big boys. What they choose to invest in is up to them. Coaches, healers, therapists, we run businesses. We exchange money. Money is just an energy exchange. Businesses make money. Storytelling and offering support on social media, that's not manipulative. If a client feels empowered to choose support, that's their decision. Sales is not wrong. Again, money is just an energy exchange. So let's zoom in on all of this. Let's talk about the pyramid scheme for a second. Because this isn't a legal business model. It's straight up illegal. You recruit others under you to sell the same thing. It's usually some overpriced product or membership. And the only way to make money is by recruiting more people. That's the only way to make more money. There's no actual transformation, no personal growth, no standalone service being offered that could stand on its own. It's pure recruitment. That's not coaching. That's not what I do. That's not what you do. If you're a coach. That's not not what ethical coaches do, period. Full stop. So what is the reason that people say this? While coaching is new. Ish. And it's not new, but it's unfamiliar, I should say to some people, there's a lot to wrap your head around when it comes to the coaching industry, especially the online coaching industry. And if something is unfamiliar, it often gets villainized. Yes, there are absolutely shady people in this space. I think there's shady therapists too. There is chomps and champs in every single industry. There are people who use manipulative marketing. There are people that post their striped screenshots with zero context. There are people that are just straight up fucking lying online about what they're making and they tell you that you can just be in this energy and poof, make 100k and it's bullshit. There are business models that only sell how to sell coaching. There are people who teach people how to coach, coaches who teach coaching. And you see the pattern, right? You're not wrong if you've noticed this and gone, wait a minute, but that is not the whole industry. What I Teach, to be clear, is teaching wellness professionals to create their own coaching program so that they can have freedom and flexibility and security. I do not teach people how to coach. I believe that therapists actually make the best coaches and they know how to coach already. I took a coaching certification. I didn't learn shit that I didn't learn in grad school. It was good for personal development. But you know how to build rapport and skill building and active listening. You know that already. You can do that in your sleep. What's more important is learning the business skills, in my opinion, so that you can actually monetize and leverage your clinical knowledge and your expertise and the license that you work so hard for. Hey, therapist, quick question.

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All right, back to the episode. So what I teach is business skills to wellness professionals to help them grow their business and create an online coaching business. Some of their niches are business coaches, some of them are business coaches, some of them are therapist business coaches. But that's a very small percentage. Majority of my clients fall in the health and wellness. So that's physical health or mental health or spiritual health or relationships. Hey, so I'm just simply teaching you how to learn business and make money in the online space, leveraging your clinical knowledge. Let me tell you where I started. I was in lcsw. I had the degrees, I have the license. I still hold my license, actually, all the hours, yada yada yada. I felt boxed in financially, creatively, emotionally, I went into debt to hire mentors. I learned marketing, sales, branding, copywriting, curriculum development, the things no one taught me in grad school. I used hypnosis, audios I made for myself. I rewired my nervous system, my subconscious beliefs and what was possible for me. And. And I had to confront very deep, deep fears. What if people judge me for being successful? What if I outgrow my friends? What if nobody wants to work with me once I become a mom? Like all of that was real. I hid my income. I delayed announcing my pregnancy. I played small, not because of the industry, but because of old internalized beliefs around money, gender roles and worth. And I talked about that in a previous episode. But once I healed those, everything changed. And now I run a very successful business. I work with therapists and coaches who are changing lives. And I love what I do. I. I've never asked a client to sell my services in order to make money themselves. That's the difference. Do I have an affiliate program? Yeah, I do. But that's on them if they want to refer a client out of the goodness of their heart, because they're going to do it already and they can make some extra cash off of that. Cool. Yeah. But I'm not asking clients to recruit people. For me, that's not my whole business model. At its core, coaching is helping people change their lives, holding space for transformation. You're offering a perspective, guidance, accountability. Whether you're teaching strategy or mindset or nervous system, tools or emotional regulation or manifestation, or you're a business coach, whatever it is, you're helping people get unstuck. You're helping people move from problem to solution. People are wondering, can I really do this? And you're showing them that it's proof that it's possible. Especially if you were your own ideal client. We want people to rise. You're going to help them rise. You're going to help them make a transformation. That's the opposite of a pyramid scheme. I'm not building a tower of people below me. I am building a ripple effect. And that ripple creates waves and impact. Generational healing, income, confidence. That's real. I'm helping the helpers, I'm helping the healers. I'm helping the agents of change make a larger impact in this world. Quite literally. Together, we're changing the world one person at a time. But it's not just one to one and one person at a time. You're making a larger impact because you're stepping into the one to many model. That's what I Teach. So every single wellness professional that I help helps hundreds and then thousands of people. That's not a pyramid scheme. That's transformation. So let's talk about the critics a little bit more, including those inside the industry. People say that coaching is an mlm, and there's this fall of the coaching industry. They talk about retreat culture, spiritual bypassing. They talk about burnout loops. And honestly, they're not wrong to a certain extent. Like, people are launching way too often, in my opinion. I don't work off of a model of live launching. That's not what I do in my business. That's not what I teach my clients. It is exhausting, quite frankly. It's just a little bit annoying. And honestly, it's hard. There's too much pressure to monetize everything. That's what I see in the coaching industry all the time. And there's people who are saying, like, don't give too much away for free. That's not me. If you're new to my world, then you'll quickly realize how much I give away. I don't try to monetize everything. There's a spiritual rhetoric used to bypass real trauma. There's obsession with vibes over values. But ethical coaching, to me, coaching rooted in integrity, it doesn't look like those things. It doesn't keep you in an endless sales loop like, yes, we want to make money, and we can unapologetically claim that that's fine. I'm here to help you do that. I love making money. But you don't have to be guilted into investing. You don't have to be gaslit. Coaching is there to extend an invitation into a deeper relationship with yourself, whether that be in your personal life or in your business. That's the kind of coaching I stand for, the kind of coaching that I teach. Another thing that people talk about is sales. And so many people say, I hate selling. But selling is not manipulation. Convincing is manipulation. Convincing is, I want you to buy this for my benefit. That's what convincing is. It's for me, it's for my benefit. Persuasion, on the other hand, is helping somebody make a decision that they already want to make for their benefit, for their best interests. It's service, and people love to be sold to when it's done with care. When I tell a story on Instagram, when I invite people into my program, when I offer a breakthrough call, I'm not pressuring anyone. My team is not pressuring anyone. I'm simply providing you with information, opening a door, giving you guidance. And then you get to choose whether you walk through it or not. That's the kind of business model that lasts, one that's in integrity. And when you think about buying coaching, I want you to think about this shift that it's not just coaching. Delete the word coaching even out of your vocabulary if it's giving you all the ick. And I hear this all the time too. Like these therapists that are adding coaching, like they don't. There's such like a stigma around coaching that they just don't want to call themselves a coach. That's fine. Don't call yourself a coach, call yourself a leader, call yourself a mentor, call yourself a teacher, whatever. But when you're buying coaching, you're buying a container where you can finally prioritize you a mirror that reflects your potential. It's a roadmap. When you get lost, you have the step by steps that you can take. It's a space to grow faster in quantum leap and collapse timelines. It's a space to grow in safety. It's a space to grow in support with people who are on the same exact map and roads and step by step with you, they're holding your hand. Not only is the mentor holding your hand, but you have built in best friends. That's valuable, that is worth investing in and people should have the freedom to do so without being judged. So is coaching a pyramid scheme? No. But like any industry, it does have its problems, but it also has potential. And we get to decide what kind of legacy we leave inside of it. You can run a high integrity, high impact, high profitable coaching business. You can walk away from toxic hustle culture. You can scale with ethics and embodiment. That's what I'm about building. If this resonated with you, share it. I'd love for you to DM me on Instagram. Let me know what you're building. Let me know where you are in your journey. I read my dms. It's actually me. I always take requests for this show as well. Scroll through all my other episodes. Leave me a review if it hit your heart in a certain place. Stay tuned. My love is with you. I'm cheering you on and I will see you in the next episode. Thank you so much for listening to the thriving Therapy Neuro podcast. I hope that this episode has inspired you to reduce burnout, work smarter and see the freedom potential you have as a therapist. We would love to have you inside the Therapist to Coach Accelerator Facebook group where we have live trainings and cheat sheets. On all things marketing, sales and adding coaching, ethically and legally. I am here cheering you on and I'll see you around.