The Industry’s focus has been misdirected for far too long. Focusing on how many clients you have and not the bottom line is holding you back! When running a fitness business, your number of clients doesn’t reflect the true health of your business. It can be a smoke screen. Not knowing your business numbers can be the final nail in your coffin. This is not some scare tactic. It’s the truth. We have compiled the way that we run our numbers on a weekly basis. It gives us the pulse on our businesses at all times.
If you don’t track every single number in your business, you are setting yourself up for failure! We know you don’t want to be that 60-year-old personal trainer who will never be able to retire because you wasted all your money on sneakers and other dumb stuff…
EVERY SUCCESSFUL BUSINESS IN THE WORLD KNOWS THEIR NUMBERS!
What gets measured gets done. “Anyone who doesn’t want to measure doesn’t want to be held accountable.”
Key Performance Indicators
Your Key Performance Indicators (KPIs) are your basic fitness business numbers that will give you a pretty good idea whether your business is healthy or if it’s on its last legs.
What we use for KPIs:
- Total # of leads this week
- Where did the lead come from?
- How many assessments/orientations scheduled?
- If they didn’t make an appointment, why?
- Total # of sign-ups this week
- How many didn’t sign up?
- Why didn’t they sign up?
- Total # of Active EFT Clients
- Total # of Clients Lost
- The total amount of EFT Last Week
- The total amount of EFT This Week
We use this weekly for our businesses. Turn these numbers into your accountant or financial advisor at the end of each week.
The main goal: NEVER ALLOW THE EFT TO GO DOWN!!!! You will be surprised by how focusing on real numbers affects your business. We have both doubled our monthly EFT since starting this exercise, and we know that you will too!
If you don’t have a financial plan for your business, you are setting yourself up for failure, and a lot of stress! Security is one of the most important things we can do for ourselves. You should have a weekly and monthly budget for your business and personal expenses. A great tool that can help you with this is a free resource called mint.com.
You should break your budget into:
Fixed Costs – Costs that occur every single month
- Recurring billing for programs, coaching, etc.
Misc. Costs – Be careful with these!
- Office Supplies
- Uniform Expenses (We have seen trainers with 100 pairs of shoes but no retirement set up)
- Marketing / Advertising
You need to set a specific amount of money allowable for ALL expenditures in your business and personal life. Whatever is left over at the end of the month should be invested, saved, etc.
“The Richest Man in Babylon”
“The Richest Man in Babylon” is a book about the richest civilization in world history, and how these people became so rich. The main theme of the story is to save at least 10% of every penny you make. You won’t miss that 10%! As a matter of fact, you won’t even know it’s gone. After 10 years, you will have accumulated a small fortune without even trying. The easiest way to set this up is to have your bank deposit it into your savings automatically, or set up a money market account. ING Direct is a company that does money market accounts, FYI.
We do the same thing with our business money and our personal money. 10% is placed into an account we can’t get to easily. Remember SECURITY is the priority, not having a bunch of sneakers.
“The Compound Effect”
“The Compound Effect,” a book by Success magazine owner Darren Hardy, is about how what we do now affects us 10-20 fold down the line. Every penny we spend now on dumb stuff will basically affect you 20x more than you think. He also explains how this “Compound Effect” can alter personal relationships, routines, and ultimately our lives. If you haven’t read this book, we recommend picking it up asap!
Profits (Gross vs. Net)
The fitness industry is notorious for talking about the number of clients and gross income (pre-tax and pre-expense). Gross Income is all great and wonderful, but it doesn’t really matter. The only thing that matters is what you put in YOUR POCKET at the end of the month. We know of “Big Players” that make 40k, 50k, & 60k + per month, but only actually profit 10k from that. Does that make them better at what they do than someone who makes 20k per month and keeps 10k? Nope, it makes them dumber. Because they have become caught up in the “Build it Bigger” competition, and not in the “Acquire Wealth” game. At the end of the day, your job is to support your family and get as much money as possible out of your business and into your pockets. Yes, it’s that simple.
How do you do that?
By keeping overhead LOW, and profits HIGH!
What’s the point of building 3 or 4 locations if the expenses outweigh the profits?
What matters is how much money you have in your bank account, savings, and investments.
***Disclaimer: We are not accountants or tax attorneys so take this advice at your own risk. This is how we have our businesses set up through advice from our accountants.***
If you don’t have an accountant and financial advisor, STOP READING THIS and go get quality people that can help you. A legit financial advisor is also a must-have; just make sure that this person makes more money than you. You don’t want to take advice from somebody talking “theory”. Make sure they make bank on their own investments.
A Good Move to Make:
S-Corp – A simple way to save at tax time. You pay yourself as an employee, but you still own the company. Plus, you can bonus yourself out whatever you profited the year before. For example, you can bonus yourself extra money each month on top of your salary. You can basically write yourself checks and they only get taxed on your personal tax return. Another added benefit of the S-Corp is that if by some awful chance you are sued, they cannot come after your personal belongings, only the corporation itself.
This portion of the mixtape is short but SUPER POWERFUL! These are the things that NOBODY else wants to teach you or talk about. Take action on these things first and watch your business explode. Remember to consult a tax accountant, attorney, and financial advisor. These people are a must for a legit business. If you don’t have them, you are not doing your part to make your business successful and sustainable.