We have been surveying all of you and collecting that data and that is the inspiration behind the tips that we share with you. Here’s an interesting one for you today.
Too Many Of Your Are Not Paying Yourself…
I wanted to discuss a particular response that we got recently because honestly, the goal of every microgym owner SHOULD BE to pay themselves.
Here’s What Happened…
Recently, a gym owner responded to our question asking whether they were frustrated with their cash flow management. To our surprise, despite having told us that currently, after expenses, they do not have the profits left over to pay themselves, this particular gym owner said they were NOT frustrated with their cash flow management at this time.
This Is A Problem!
I wanted to address this mindset because, if you are not paying yourself enough money, you SHOULD be frustrated! As gym owners, I know that you work harder than many other entrepreneurs out there. The amount of discipline and willpower that gym owners have creates that wonderful can-do spirit that it takes to run a gym. However, it is also because of that attitude that gym owners will go years not paying themselves or even take on full-time jobs to keep the gym going.
I want to highlight why this is a problem if that is currently your way of thinking as well.
Cash flow management is not the end all be all to grow a gym, but it is a KEY COMPONENT in creating profitability and long-term wealth. If you are not managing your cash flow, all your other efforts could be in vain.
Steps For Creating Profitability & Wealth
If you are in a scenario where you can’t pay expenses after paying yourself, here are some steps that may help you.
First, start by reversing the statement “I can’t pay myself after I pay my expenses”.
If that is the case, then pay yourself first and THEN look at the expenses that need to be paid.
This is one of the reasons why the profit first system works so well. If you follow the steps you will be in a position where you are paying yourself first while still putting yourself in a position to get your expenses paid.
Ok, But What About Expenses?
If you’re looking at the remaining money and saying to yourself “There is not enough left over to pay my expenses”, that means your gym is communicating to you it can’t handle that load. It is screaming at you saying “Hey, let’s lighten the load a little bit” or “It is time to review your expenses and see what can be cut”.
Ask yourself is this an investment or is this an expense, we want investments, not expenses. Is there equipment I don’t need or coaches that are not performing? Whatever it may be, looking at every single expense and asking yourself if this is a good investment.
If you would like to hear more from me on this topic, click the video below!
We will be offering a lot of advice on our page here, but we also would be happy to help you out on a more personal level. Feel free to hit us up if you need help preparing your taxes.
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