Above every goal you have as a fitness business owner (that is, to grow fast, open new locations, and help people), profitability comes first. And, you can take that to the bank!
Profitability and financial “fitness” are the centerpieces of running a successful fitness business. And there’s no better person to address fitness business finances than John Briggs – an experienced tax and accounting consultant focusing on small gyms and brick-and-mortar businesses. He is the founder and CEO at Incite Tax and Accounting as well as the author of Profit First for Microgyms: A Simple System for Healthy Cashflow.
John Briggs is not only an expert accountant, but he is also the co-owner of GSL Fitness, which gives him first-hand experience in running a profitable fitness business. The insights he shares on this webinar are informative and eye-opening, particularly for fitness business owners.
Watch the webinar below:
Here are the key highlights:
Profit First; Everything Else Second
Most fitness business owners and personal trainers have a helping mindset and they will prioritize supporting and helping their clients to the detriment of profitability. While this may be noble and admirable, it simply does not work if you are running a business.
Advice from an accountant: the bottom line should be your priority.
Running your fitness business at a profit should be your first and most important goal. And that’s because it’s what keeps the business running smoothly and helps you stay motivated as a business owner. So, before you plan on expansion or buying new equipment, make sure you are turning a profit first – and then use that to fund expansion and growth.
The Importance of Cash Flow in Fitness Businesses
Cash flow is one of the key business performance indicators. Quite simply, cash flow is the amount of money received and paid out from your business over a given period.
When you have good cash flow, it means that you have enough money to take care of business expenses without a problem. If you find yourself constantly out of cash when you are trying to pay a bill or an invoice in your business, there’s a problem.
So, understanding cash flow is key to growing your fitness business. It will not only help you better manage the cash in your business, but you will also be able to forecast your future cash flow, which will help in decision-making. Understanding cash flow will also help you focus on the products that generate more revenue and sell more of them.
How to Systemize Cash Flow Management in Your Business
Most fitness business owners find themselves cash-strapped despite having a large amount of revenue coming into the business. One easy way to solve that problem is to have a cash flow management system in place.
You can do that by identifying the different commitments that your business has and creating a separate account for each of them. For a fitness business, the essential accounts that you should have set up to manage your cash are:
- Income account
- Team members’ accounts
- Owner’s pay account
- Profit account
- Tax account
- Operating expenses
- Equipment account
After you’ve created these accounts, it’s recommended that you set aside time (at least twice a month) to allocate money from your income account to each of these accounts.
That way, you will be able to see the true picture of your finances, and you can manage your cash better.
And There’s More…
This conversation is a goldmine for financial management and profitability tips. There’s a lot more John Briggs delves into, including the best revenue streams for a fitness business, how to set your pricing right for profitability, and the metrics that you should be looking at as a fitness business owner.
You can connect with John Briggs on LinkedIn or visit the Incite Tax website for more accounting and financial management advice. You can also grab a copy of his book: Profit First for Microgyms: A Simple System for Healthy Cashflow on Amazon .