Business Fundamentals Overhead

Business Fundamentals Overhead

Posted on 11. Apr, 2012 by in Marketing Fitness


[spoiler]
Sam Bakhtiar: Hey, what’s going on? It’s your main man Seven-figure Sam here. I’m with my boy Erick Salgado. Erick, what’s happening?

Erick Salgado: keeping busy.

Sam Bakhtiar: Awesome, man. Now Erick is my partner here in Riverside, the Camp Boot Camp location. Erick is already – how long have you been in business already?

Erick Salgado: It has been about four months.

Sam Bakhtiar: Four months?

Erick Salgado: I think so.

Sam Bakhtiar: And he’s already killing it. One thing about – the reason that Erick is killing it is the most important thing. He has the fundamentals of business right from the beginning. OK?

Like today, I’m actually visiting Erick and I’m actually visiting another friend of mine in Culver City that – totally different. When Erick first came to me, I said one of the most fundamental things in business is to make sure that you keep your overhead and control your overhead.

Now anybody can go spend money. It’s easy to go spend money. It’s hard to earn money. OK? So when you’re beginning your business, it’s so important to keep your cost as low as possible, build up your clientele, get the cash flow going before you start investing in a $5000 lease space or all these equipment. But Erick, you started this whole set up.

Erick Salgado: Yes.

Sam Bakhtiar: This whole setup. How much equipment did you put in here?

Erick Salgado: Oh man, I mean just a couple of thousand dollars. I mean you want to get your basic mats, some dumbbells, sandbags, medicine ball, stuff like that. But we definitely didn’t start off with anything extremely expensive.

Sam Bakhtiar: OK. And then how big is your space here?

Erick Salgado: It’s around 26,000 square feet.

Sam Bakhtiar: Twenty-six hundred square feet.

Erick Salgado: I’m sorry, hundreds.

Sam Bakhtiar: OK. Whoa.

Erick Salgado: I’m sorry about that.

Sam Bakhtiar: OK. So 2600 square feet. At 2600 square feet, how much do you pay for rent? I just want to know about – what is the rent?

Erick Salgado: Rent is about $1500.

Sam Bakhtiar: Fifteen hundred dollars?

Erick Salgado: Yes.

Sam Bakhtiar: Holy – this is exactly what I’m talking about. So here in the Riverside location, we pay $1500 a month. And altogether out the door, probably what? Less than $2000?

Erick Salgado: Yes.

Sam Bakhtiar: OK. Every month is going out.

Erick Salgado: Yes.

Sam Bakhtiar: Now you need like 10, 15 people to break even.

Erick Salgado: Yes.

Sam Bakhtiar: Now if you’re not able to get 10 or 15 people, then you got bigger problems than I can help you with or anybody else can help you with because it’s only – your $2000 worth of overhead, that’s what you want and that’s what I’m talking about. You want peace of mind.

Now I’m visiting a good friend of mine. She’s a dear friend of mine in Culver City after this and she’s from Brook [0:02:35] [Phonetic] Body Boot Camp [Indiscernible] and she was told that it’s OK to go get a $5500 a month rent space and she’s busting her ass and she’s one of the greatest people in the world. I mean she has great energy and when I sat down and she hired me as a coach, I sat down. I’m trying to figure out why she’s not making any money.

I figured out that she has a $5400 rent and that’s just ridiculous. I mean that’s not the business model. The business model for a boot camp is low overhead and high return and that’s why you got into this because you wanted to have group training, low rent, not one-on-one training that your revenue, your payroll chases your revenue. So, great job. You have a peace of mind.

Erick Salgado: Yes.

Sam Bakhtiar: You know if anything else – you need 15 people to break even. I know you got way more than that. So again, this is Seven-figure Sam here in Riverside, California with The Ab Pro, my boy Erick Salgado. He’s one of my really good friends. He used to work for me and now he has his own business and we’re now partners.

Erick Salgado: Yes.

Sam Bakhtiar: Erick, thank you so much man, and I got to go fix some problems in Culver City. Thanks. Bye-bye. Take care. Bye.
[/spoiler]

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One Comment

Eirith

18. Apr, 2012

Broke body boot camp that is fucking awesome Sam.

Irma’s situation was so fucked up. She needed to make six figures just to break even.

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