3KEYS
THE
TO A PROFITABLE BUSINESS
Most people aren’t experts in every aspect of running their business. So why try to be?
WORDS: DAVID HAYES
o be successful as a fitness business
owner you need to have a profitable,
competitive business strategy and
then master three key business functions:
T
1. Marketing your business effectively
2. Delivering your fitness service promise
consistently
3. Managing every aspect of your
company’s money.
The challenge for many business
owners is that they spend most of their
time and energy in the area where they are
strongest (delivering the fitness service),
and so marketing and money-management
suffer. In some instances, business owners
don’t spend enough time marketing their
businesses because they are weighed
down by the other demands of running
their businesses, which in most cases are
not their core strengths (e.g. accounts
receivable and payable, BAS (GST and
PAYG), payroll, financial reporting and cashflow management).
28 | NETWORK WINTER 2014
Although you are working hard to build
up your business it never reaches its true
potential. If you’re not effective at marketing,
you’ll never maximise the capacity and profit of
your business. If you’re not effective at money
management and bookkeeping, you might
suffer financial consequences like tax problems
and suffering a reduced business value.
Tax problems can manifest themselves
in different ways. You might be paying too
much tax or you may get an unexpected tax
bill that threatens your liquidity.
Increasingly, as in many industries, smart
fitness business owners and investors are
working in the functions where they are
strong and outsourcing the functions where
someone else can do things better, cheaper
or faster. Some owners spend hours a
week processing accounts, paying bills and
wages, and entering data where that time
would be more profitably spent in marketing
to increase revenue.
Consider the huge growth of franchised
fitness operations. It is a classic case
of outsourcing. The franchisor provides
the brand, competitive strategy and the
marketing for the franchisee to implement
(#1 business function). Some franchisees
work in their business, while some
outsource, and some investors even
outsource all operations to employees (#2
business function). That leaves the multiple
tasks involved in money management and
keeping good books (#3 business function).
If you’ve ever looked at buying an existing
fitness business, the first thing that you’ll
have wanted to see (without delay) are
clean and up-to-date financial statements –
preferably monthly statements that show the
true trends of the business.
Many business sales fall over either
because of the delay in getting accounts,
or because they are shoddy and full of
personal items. The business still might
sell, but for tens of thousands less than its
potential worth.
If you’re focused on growing your
business – or one day selling your business