Managing cash flow?
You might be asking “How am I supposed to do that?” “This already feels overwhelming”. And maybe you’re not fully sure what I mean by cash flow.
The good news is, running a healthy gym and making your cash flow a priority isn’t that difficult. By the time you’re done reading this, I can guarantee you will have the direction, confidence, and capabilities to start managing your cash 10x better than before.
I should also mention that having cash flow is the lifeblood of your business. Without it, your business is dead or eventually will be. You don’t want that and I don’t want to see that happen to any Affiliate owners because what you offer to the community is so impactful and positive.
With proper cash flow management techniques and rhythm, you’ll be able to achieve more growth, live with a lot less stress, and take home more bacon!
This simple hack I’m sharing with you right now will start you on that path.
Health then Wealth
I had to learn the hard way about an unhealthy business. A few years ago my cash flow had absolutely no rhythm and before I knew it I was up to my eyeballs in debt! Maybe you are experiencing something similar right now.
I’m not going to get deeper into how I turned things around and how my business health started performing like an Olympian other than to say this hack right here is what all turned things around for me. This was the pivotal moment that changed it all.
And I can tell you, you are not far off from making this overflowing of profit and business health a reality in your gym. The Affiliate owners who have adopted this system are reaping the rewards and are completely confident in their business future.
Right Focus = Right Results
I know when we talk to a business owner we instinctively want to learn the size of their business. How much money did they bring in? That’s because we are creatures of comparison and we are programmed to gage ourselves from others success or status.
The problem with this thinking is skewed.
I’ll tell you why with this example. Which business is healthier?
If a gym brings in $1M in annual revenue but net income is $100K
If a gym brings in $250K in annual revenue but net income is $100K
The latter is the healthier box with a better cash flow. So your goal of making more money is great, but make sure it’s coupled with staying healthy and lean with your costs.
Cash Flow Operations
If you’re like most Affiliate owners you see money come in your box, you pay your bills and that is the way you operate.
The truth is, this method is an unhealthy way to manage your cash. Don’t feel bad though because you’ve been taught to do this since you were in school. Does this formula look familiar?
Sales – Expenses = Profit
You should start to refer to this formula as Frankenstein because it is a monster. This is creating the mindset that as business owners we operate in a way that we get the scraps left over. Profit is the afterthought, the end result.
Your Profit Hack
How about we reverse the formula and take a predetermined amount of profit?
Sales – Profit = Expenses
Take a predetermined amount of profit and set it aside! This is the starting point for your business health to start performing like Michael Phelps swimming the 100m butterfly.
I’ll tell you what I like about toothpaste. When you get a new tube, you don’t waste any brain power thinking about how much toothpaste you’re going to put on the brush, but when you get down to the end you get really creative on how you’re going to get the toothpaste out while paying attention to how much you actually need to get your teeth clean.
Look we behave no differently with our money. We are much more creative and effective when our resources are limited. Even if it’s a perceived limitation.
If you will begin to change your mindset and pay your profits first, the health of your business will begin to increase dramatically.
You now get to pay yourself first and then use what is left over to pay your expenses. Again there are other posts that go deeper into this but as you are starting out with your cash management, ingrain this concept and start paying yourself what you’re worth and start cutting some of your expenses that you really don’t need.