Are you aiming for growth or maintenance? Do you have a business plan? Do you know what you need to do to meet that plan? Are you aware of your numbers (profit, income, expenses, cashflow, retention etc) both in terms of what your current business produces and what you need / want them to be?
Whilst it is possible that your business is sustainable without having these things in place if you find yourself constantly firefighting or regularly going through financial crises then you need to change things if you want a long term future in the business.
Like an unsustainable nutritional approach, an unsustainable business approach might be ok, unavoidable or even desirable for the short term but for the long term it’s never going to work. Similarly to the diet, the key for long term success is in recognising that what you are doing isn’t sustainable and having a plan to transition to something that is.
Firstly, you need to acknowledge where your business currently sits on the sustainability scale. There are two main areas which regularly cause fitness businesses to intentionally or unintentionally find themselves at the problem end: Finances and Time, so let’s look at those in more detail.
If your turnover doesn’t cover your costs then you’re not going to last very long in business. If this is you then you need to get clear on your numbers really quickly and implement a focused plan to increase turnover and / or decrease costs.
Linked to this is cashflow, ensuring you can cover the costs when they need paying not based on when the next client gives you money. This involves looking at your finances as a whole on a proactive basis, not on an ad hoc responsive basis. Work out your numbers, capture the information, create forecasts and monitor how they match the reality. Get used to holding on to money that comes in rather than assuming it’s available to spend. Make sure you are aware of future demands on your finances, think about tax, insurance, client acquisition and onboarding costs, gym rent, travel costs and anything else you incur within your business.
However, it doesn’t stop there, breaking even is not an end goal and doesn’t represent a sustainable business model longer term. You need to be earning enough to cover the lifestyle you want to live and have money in both business and personal bank accounts to cover the inevitable unexpected costs that crop up from time to time.
If your business isn’t financially sustainable then:
- Calculate your numbers: know your turnover, costs and profit
- Calculate your required profit (realistically). It can be good to have a few targets here. e.g. what do you need to survive, what do you need to relax a little and what is the desired end goal.
- Work out what you need to have to be where you want to be in terms of your services. How many clients do you need? What service level will the be on? When will you fit them in? Will they cause any additional costs? Are there any costs you can reduce or remove?
- Create a plan to get from where you are now to where you want to be. What’s your marketing strategy? What’s your expenses strategy?
- Take Action!
Being on top of your finances isn’t boring, it’s the key to a successful business.
Working all the hours available is an easy situation to get in to. After all we generally start off with no clients and are willing to take on anyone and everyone. Alternatively, even if there’s not a problem with the total number of hours you’re working, the specific hours you do work could be an issue. With the majority of our client base working in “9-5” type jobs that leaves their available times for training early or late. Whether this is an issue or not depends on your life outside work but if you have a partner or friends who do a “normal job” or children then you’re probably going to want to plan a working week that allows some time for the significant others in your life at some stage.
If lack of time to spend on the things you want to do or with the people you want to spend it with is an issue then:
- Identify how you are currently spending your time.
- Work out what you would like your work week to look like (realistically).
- See what you can move easily.
- Take action! Work towards the planned week – ensure any new clients taken on fit into those times, ask existing clients to change time slots / give them options that work for you, consider taking on help / sharing the work, don’t be afraid to turn people down or stop working with clients that don’t fit your schedule.
- Note: Even if it all works ok for you short term start thinking about longer term and have a plan so it stays manageable and you can work towards so you don’t hit a critical point where it all becomes a big issue.
Whatever the current state of your business there is no reason it has to stay like that. Being honest about whether it is sustainable, whether it is overly reliant on particular people, certain technology, understanding partners or your own health and energy levels, or whether there is anything else that could necessitate a change is the best starting point.
Next is knowing where you are aiming for. Closely followed by coming up with a plan to get you there, noting key points and setting triggers such as targets where you will reduce hours, or the maximum time you will try something before making a change etc.
Then take action and keep focus on the plan. The most easily avoided cause of derailment of plans is being distracted, dazzled by some shiny thing that you can use to legitimise your procrastination. Don’t let that happen to you. Keep going back to your plan, make yourself accountable to someone if you need to and make it happen.
Whilst no business is ever stress free, if you have it set up in a way that is sustainable it makes it, and life, a lot more manageable.
The Time Management Course is a great one for helping you identify how you are using your time and making improvements to it and the Marketing Checklists (on the downloads page) and Growing a Client Base course are brilliant starting points for the attracting new clients side of the financial equation. Non members can access the courses, along with all the other resources, as part of the trial membership here. LTB members may also find an upgrade to LTB Essentials level membership can help with both situations giving you a solid basis for your business.