Thanks to John Briggs, owner of Incite Tax, for this guest blog post.
Part of this months objective in Hub is that Hubsters will set up and start implementing Profit First into their gym business.
Our goal is to help gym owners in any way we can get to a point where they are quickly profitable in their gyms, and Profit First is a great way to do that. It’s a great way to gain control over your finances and start making them work “for” you, rather than just constantly be a stressor.
But what is Profit First?
Profit First is a book written by Mike Michalowicz. In it, Mike lays out a framework for cash flow management that any business owner can do that will make them immediately profitable. To which you may say, “yeah right… that sounds like a load of crap. He doesn’t know anything about the specifics of every business owner, how can he possibly make the claim that his system can magically make any business immediately profitable?”
As a mastery level certified Profit First Professional, I can tell you that his system DOES make any business immediately profitable. And it’s really simple how. I will tell you how it’s done, but before I do, please don’t minimize or breeze over why. The reason any business can be immediately profitable is so simple that I’ve seen affiliate owners roll their eyes and think because the answer is so simple that the system can’t possibly work.
And the truth is, I know you. I know who I am talking to. I mean, I know I don’t know you personally (well, some of you I do because we have 100+ affiliates as clients), but what I do know is that you run a gym. And that means you know how something simple can be so effective and so hard at the same time. Take a 21-15-9 WOD of air squats, burpees, and push ups. Simple. Effective. Hard.
So how can a business be immediately profitable? The next time you get a deposit, take $1 dollar of that deposit and set it aside for profit, like in a separate bank account. And then you call the $1 dollar profit. Immediately profitable. It is that simple. You see most owners don’t consciously set aside profit. They run their business, work in the day to day of the operations, put out fires, create visions of the future, deposit money, spend money, and then hope at the end of the day there is something left over.
With this approach, nothing is ever left over.
So instead, we say take your profit as the first thing. By already setting that money aside, then as one gets stuck in the day to day, money in, money out, they will have something left over because it was taken and set aside before it could be spent on something else.
There are plenty of gym owners out there who are profitable. And some feel like they don’t need a system like Profit First because they’ve already accomplished “profitability”. But, I have a question… When an athlete hits a fitness goal, does the coach say, “Congrats! You’ll never improve on that so you should just stop now while you are ahead.”?
Nope. Constant improvement.
Profit First can help any gym, profitable or not.
And it doesn’t just focus on profitability. Profit First is a cash flow management system, so it covers every aspect of cash flowing in and flowing out of a business.
Are you saving enough for your tax burden? Profitable businesses pay taxes. And while our 100+ affiliate clients pay much less than others, they still pay taxes.
Or maybe you’ve wondered questions like these…
What should you be paying yourself? Ever wonder if you are taking home enough money? Is it possible you are paying yourself more than your gym can afford right now?
Should you hire another coach? Can you afford that?
How do you cut expenses? If you know that you need to lower your expenses, how do you actually determine which expenses to cut?
The Profit First System answers all these questions and more.
Whatever the state of your business, the Profit First cash flow management system will make it better.
All Hub subscribers have access to a Profit First course we put together. It is a simple, step-by-step course designed to help you get this system up and running in your business. Imagine if after all the time of running your business and being frustrated about your finances that you had a plan to make a profit every month. If you’re not a member of Hub, I hope you’ll join today and make your profitability happen.