Episode 309: Stop Paying Yourself Last with Ben Pickard
Feb 12, 2024
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Ben Pickard, an expert in helping gym owners grow their businesses, discusses topics such as maximizing profits, allocating funds properly, consistent marketing and sales systems, creating positive impact, and the importance of revenue and personal wealth in the gym industry.
Consistency in implementing marketing and sales strategies is crucial for driving revenue in a gym business.
Allocating money wisely, following a profit-first model, ensures proper support for the team, reinvestment in the business, and an enhanced client experience.
Deep dives
Step 1: Create Revenue
The first step is to generate revenue in your gym business. This involves having effective marketing and sales strategies that are consistently implemented. Consistency is key in driving revenue, and it's essential to explore various marketing channels and techniques. Investing time in improving your business, marketing, sales, and financial skills is crucial, especially for gym owners who often come from a fitness background. By focusing on driving revenue, you create a solid foundation for building personal wealth.
Step 2: Allocate Your Money Wisely
After generating revenue, it's important to allocate your money wisely. This involves giving every dollar a specific purpose in your gym business. A recommended approach is the profit-first model, where you divide your revenue into different buckets, such as people expenses (25-40% of revenue) and non-people expenses (20-35% of revenue). The total expenses should ideally not exceed 70% of your revenue. Allocating your money properly ensures that it supports your team, reinvests in the business, and enhances your client experience.
Step 3: Pay Yourself
Paying yourself is a vital step in building personal wealth as a gym owner. This involves breaking down your pay into three categories: regular salary, profit, and owner perks. Your salary should be a fair market value for your work, and profit distributions should reward you for the risks of entrepreneurship. Owner perks allow you to use pre-tax dollars for business expenses that benefit you personally. Creating a strategic pay structure ensures that you are fairly compensated and enjoy the benefits of being a gym owner.
Step 4: Maximize Your Savings
The final step is to maximize your savings by utilizing business strategies. This includes using before-tax dollars to pay for personal expenses that are permissible within your tax jurisdiction. By doing this, you can take advantage of tax deductions and reduce your overall expenses. However, it's essential to consult with a local professional to ensure compliance with tax laws and regulations. Maximizing your savings helps you retain more money within your business and increases your personal wealth as a gym owner.
Looking for help with raising your rates? Get BFU’s playbook for raising prices so you can charge what you’re worth while minimizing client pushback. Includes step-by-step instructions and email templates you can copy and paste. Get it HERE.