Hope you had fun going through the “article-within-an-article” from a couple of days ago on the site where I talked about how your net profits, ie. the cash you take OUT of your business and put away and don’t touch, is the most important figure to look at in your business life.
I just happened to read through the article again for the first time in a long time, and decided that I needed to come on here again and clarify a little more. Like I mentioned, that article was for PFP, and it was a little too stuffy and low-key for my tastes. I’m going to open up a bit and dig into some more details right now.
Before I do, let me mention the link that was at the end of the article. It was to a new week-long course on how to start a personal training studio related to THE STUDIO START-UP PROGRAM. There’s tons of valuable free content in that series, so be sure to register for it right now if you haven’t yet – here’s where to go:
How To Open A Training Studio
Now the concept of what I was talking about is best explained in the book THE MILLIONAIRE NEXT DOOR by Thomas J. Stanley (take a minute and pick up a copy of that book too). The idea in the book is that even the highest paid people in our society are “under-invested”. That means they have little to nothing to show for their years of work and will end up flat broke at the time of retirement.
That’s what I was getting at in the article. That even if you’re making a lot of money in your fitness business, if all of it is going back into the business and your personal overhead, you’re broke – I don’t give a crap what you’re making.
Now if it sounds like I’m pointing the finger, realize that I’ve been the biggest offender in this area for most of my training career.
I’m lucky that from the time I first went solo as a trainer, I started pulling over $2,000 most weeks because of my exclusive host-beneficiary relationship with a POWERHOUSE GYMS franchise (something I teach you how to do in the SIX-FIGURES IN 67 DAYS BLUEPRINT, free on this site).
I’ve gone on to make much more than that through bigger joint ventures and of course my own studio and current publishing business. The tragedy is I have very little to show for all the years of work since then. It’s only recently that I’ve been putting away money and not touching it? And you know what? Those assets have exploded through the roof!
A good portion of my stocks are tied up in Baidu.com (India’s version of Google), Apple, and the big dog Google itself. All three have exploded since I’ve invested in them (I also invested in property that was eating cash but has recently started bringing me a nice profit every single month).
What if I’d been paying attention to profits very early on in my career, from when I first started really making money? Who knows. So the point of yesterday’s article was for you not to make the same mistake.
Don’t be worried about size of your business – worry about the profits. And for a while, go ahead and blow your cash on trips to Vegas, Miami, clothes, cars, and partying. But get that out of your system QUICK, and start putting it away in appreciating investments.
Here’s are a few ways to get your net up:
- Realize that even after you pay your employees, the money that’s left is still largely eaten up by your other business and living expenses. Keep this in mind in determining your profit margin for your services.
- Decide on a net hourly worth of your time that you want to get out of your business, and divide your income by the hours you’re working and make sure it’s hitting your number. And outsource or eliminate everything that could be done by someone else. If most business owners actually divided their earnings by their hours worked, they’d realize they’d be making more if they worked at Starbucks.
- Look for leveraged, not linear income. If you’re doing any linear income activities, things like one-on-one sessions, stop immediately. Grow some balls, grab a piece of paper, and plan your replacement strategy immediately.
That’s just a quick-start list for you to begin to implement. I wanted to keep this article short and just expand on the last article.
The bottom line is you need to pay yourself first. If not, you’re not really in business – you’re just practicing. The minute money starts to really go away in the bank and into investments, is the minute you get on the road to getting rich. ‘Til then, consider yourself broke.
Oh, and that leads us to where we started – the easiest way to implement systems and leverage time is within a training studio – nothing else comes close. And you’ll get a ton of free information and articles specifically on that subject at the new MyTrainingStudio.com site.
I know everything I just said was common sense, but also admit it’s something you don’t stick to as much as you should. Don’t worry, I was there. But the minute you start expecting your business to bring you a net profit is the minute it turns into a real business. And that’ when it really starts to take off! Talk soon.