All posts by Dean Carlson

DaVinci, Michelangelo, and You

Now you may not be in the same breath with the greats, yet, but it's a worthwhile goal.

And while you may or may not be a master sculptor or painter, you are really good at what you do, right?

The question to ask yourself is "Am I (and my company) SO good at what we do that we not only are first in the minds of prospects looking for our service, but price isn't all that relevant in their decision?"

You've probably seen this ad and laughed...

Not only do you not want to have this guy doing your surgery, you don't want to BE this guy in the minds of your prospects and customers.

Need #5 on the Order level of the Business Hierarchy of Needs is Mastery Reputation.

Question: Are you known for being the best in your industry at what you do?

Being considered a master of your craft most likely means you are going to have to narrow down your focus and commit to serving a specific target market. The individuals who are considered greats usually niche down pretty tight. It's hard to have a reputation as "all things to all people" and attract the best clients, whom I'll describe here as hungry for your services and willing to pay for them. 

In the fitness industry the foremost example that comes to my mind is Eric Cressey and Cressey Performance. I have been at Cressey Performance in Massachusetts a number of times, and heard Eric speak when he was an "up and comer." He has always been dedicated to athletic performance, but it is his focus on baseball players, and particularly pitchers, that has made him the "go to" for many in the baseball world when it comes to arm and shoulder health and mechanics. The work he has put into to faithfully and consistently master his craft has reaped huge dividends. When I think of Eric, I think "Baseball". If my son was a pitcher, that's where I'd want him to train.

It's common to think that by adding more services you are are attracting more people. And while that MIGHT be true, the flip side is you are often lumping yourself into a crowd it's very hard to compete with. In the gym world, most businesses we serve are not going to outspend and "out-equipment" the Planet Fitnesses and YMCA's of the world. The Globo gym down the road offers everything from Aerial Yoga to Zumba, do you really want to try to compete with that? 

And it's not just gyms. The best Barbecue restaurants don't serve sushi, know what I mean? 

So think about it. Who can you and your business be the "go to" for? Who do you really enjoy serving, and how do you enjoy providing those services? Is there something you are doing now that you probably shouldn't be? 

How can your business be the masterpiece you've always wanted?

But Nobody Can Do It Like I Do!

Admit it. Even if you don't say it out loud, you rehearse it in your mind. After all, you are the one who started this business, and without you it would all fall apart. 


NOBODY AROUND HERE CAN DO IT LIKE I DO!


Well whose fault is that?

You see, there's a big problem (or two or ten) with this line of thinking, and even bigger problems if it's actually true.

What happens if suddenly you aren't around? 

If 2020 has taught us anything, it's that "stuff" out of our control does happen. We get sick, we have an accident, we need to take care of our kids or our aging parents. Or maybe, just maybe everything is going really well and we just want to take a nice vacation to somewhere warm. (It's possible this could be autobiographical, as parts of the state where I live, NH, just got dumped on with 4 feet of snow. Just saying.)

This brings us to Need #4 on the Order Level of the Business Hierarchy of Needs; Linchpin Redundancy

Question: Is your business designed to operate unabated when key employees are not available?

In his book "Linchpin", author Seth Godin describes this role as somebody in an organization who is indispensable - who simply cannot be replaced because they are just far too unique and valuable. The point of the book is to teach you as an employee how to become that in the organization you work for. 

Most of us know who the "linchpin" is in our company. As described before, many times early in our business it is us as the owner. As the business grows often it is the office manager or "admin" who is the glue that holds it all together. 

This is a dangerous place for a company to find itself in, for the reasons described above. When "stuff happens" in your business and pulls a key person out, what happens? Does the work just pile up waiting for that person to come back, if they ever do, or is there someone else in your organization that can step up and get it done? The bottom line is that no business should have a dependency on any one person that is so critical things come screeching to a halt if they are out for more than a couple days.

And that's why it's so important to have documented systems in your business, and more than one person trained on those systems. The key words here is "documented" and "trained". If you have been following this series you'll recognize every business has a way of doing things, those are their business "systems". But not every company has documented those systems so best practices can be followed by everybody, every time. And it's not very fair (or productive) to ask someone to take on a task they know nothing about or maybe didn't even realize someone else did. Training and cross-training takes care of that problem.

There are many ways to document systems so they can be easily taught. You don't have to write huge step-by-step manuals. One of the most effective ways is to record video walkthroughs and screenshots of everyday tasks, and then make them available on a shared drive.

So think about it. Who are the key people in your company you just can't imagine not having there? What would happen if they walked into your office today and told you they needed some time off? Or quit? Is your company prepared for life without them? 

And what about you? Are you able to take some time off when you need to without things falling apart? If it's true that "Nobody Can Do It Like I Do", you have some work to do taking care of that. I promise that the short term pain of creating "linchpin redundancy" in your business is more than made up for when it hits the fan. 

Start small. What's one system you could document and teach today?

Now Make it Happen!

It’s Time To Let Go

There comes a point when you can not and should not be doing everything in your business. When you have to let your inner "control freak" go. You have most likely heard this referred to as "Delegation".

Here's the problem when many, if not most, business owners start "delegating". We hand off a task or responsibility to someone on our team and then proceed to stand over their shoulder and try to make sure they do it exactly the way we would. That's not delegation, that's micromanaging. You don't like it, I assure you, your team members don't either.

You know what else frustrates your employees? When they have responsibility without authority. If someone has to come running to you to get your permission to do something all the time, you haven't delegated. You've simply given a job to do without all the tools to get it done.

Which brings us to Need #3 on the "Order" Level of the Business Hierarchy of Needs (BHN) - Outcome Delegation.

Question: Are the people closest to the problem empowered to resolve it?


When a team member is truly empowered, that means that you give them leeway to not do it exactly like you would, and also to accept the outcome. If the problem wasn't resolved in a fashion consistent with existing guidelines or values, that is a conversation you can have to help decision making in the future. But unless they did something that is illegal or jeopardizes the business in some way, you need to stay out of it.

Another key phrase is "people closest to the problem". As your business grows, that won't be you anymore. For instance, if you own a gym and are consistently hearing from your admin that the check-in process isn't working, you have two choices:

1) Insist that it's not being done because of X, Y, Z, and tell her to just "get it done".

2) Ask her why she thinks this is happening and how she thinks it could be made better.

I think we can agree number one isn't going to win you any "boss of the year" awards. The second is probably more powerful than you realize. When an employee knows you are willing to listen to ideas, they feel good about themselves and about you. It brings out creativity and problem solving, and often the solution is much better than the current process and better than the one you would have come up with.

It would be no surprise to those who know me and those who worked for me that I struggled with this as we added team members. I like things done my way, and it caused conflict until I realized that just because the idea wasn't mine, or wasn't like I would do it, didn't mean that it was a bad idea. Usually just the opposite. They were closer to the problem, which meant they had perspective I did not have. And it can work the other way. Sometimes explaining (or reminding) why you do things the way you do them brings your team a better perspective and you get better cooperation. Just don't get caught in the trap of "that's the way we have always done it". That leads to stagnation and frustration.

For the business owner, it all starts with the willingness to listen, learn, and when appropriate, let go.

How are you doing with that?

The Right Person For The Job?

One of the biggest challenges I have had in my journey as a business owner is hiring. It's this weird dance of the applicant trying to convince you they are THE most qualified, THE most enthusiastic, with THE best work ethic you have ever seen.

And you are trying to figure out all the reasons why they aren't. In my experience it often comes down to making a gut decision. I've been right on those, and I've been wrong. 

But if your hiring process is solid, and you know how to filter through the pretenders, there are gems to be found. Really good people, with great work ethic, who put in their all to grow and get better. When you find someone like that, it's your job to keep them!

And the key to accomplishing that is to the second step on the "Order" level of the Fix This Next Business Hierarchy of Needs (BHN).

Need #2: Role Alignment:

Question: Are people's roles and responsibilities matched to their talents?

Another way to ask it is this; Do you have the right person doing the right job?

When you hire, you hire for need. It just makes sense. If you need a coach in your gym, you put the word out in the marketplace that you are hiring a coach. 

But what if you find out later that this particular hire is an absolute superstar when it comes to sales? And has the ability to lead? And is hungry to learn and grow?

You see, it's usually not until weeks and months after you bring on a new team member that you actually know who you really hired. Get rid of the ones who don't fit, and help the ones that do fit, shine. 

The "superstar" I mentioned earlier is a real live person, and her name is Meagan Sbat. I hired her as a very part-time coach, but she didn't stay there long. She eventually became the GM of one of our gym locations, and a couple of years ago she bought that location from me. Good decision, Dean. I have watched her flourish and navigate this pandemic as well as anyone could. She even just recently moved the entire gym into a bigger location so she could serve her clients better. Truthfully, she is absolutely the right person at the right time for owning and operating that gym. I am pretty sure I would not have had the guts to do what she has done. Under her leadership Get Fit NH has thrived.

In her case, I got it right. By recognizing and developing her skills and talents, the whole business got better. And she isn't the only success story at that business. About a year before we sold the business, I started working with one of our coaches, Adam Gray, on program design and development. That was harder than you think because I am very protective and picky about program design. But he too has stepped up and developed a world class coaching program. And again, the business is better for it.

Sometimes that story won't have a fairy-tale ending. Sometimes the hire doesn't work out and you need to let them go. Other times you will end up developing a person only to have them leave because they have outgrown your company. I am not saying that's easy to take, but you can and should take pride that you helped that person flourish and succeed. 

Here's your action step for today. Take some time to think about your team and if they are really enjoying and flourishing in the role they currently occupy in your company. Would someone be better suited in a different role? Is it time to create a role that would benefit both parties and drive the business forward? Is that task you are holding onto really something "only you can do", or is ego getting in the way of letting it go?

When you have the right people doing the right jobs they are happier, customers are happier, and you are happier.

Who can argue with that?

Create Your Own Easy Button

Remember the Staples "Easy Button"? We keep one around the gym so after a grueling set of squats or KB swings I can go over and press it, with the cheery voice saying...

"That Was Easy!"

Clients love it, really!

Seriously though, Staples was on to something. They were communicating to their customers that doing business with us is better. Simpler, hassle free, pleasant. Easier. It was a big brand promise, and you can decide for yourself if they live up to it. 

I was reminded of the Easy Button as I worked my way through the "Order" level of the Business Hierarchy of Needs (BHN).

Need #1: Minimize Wasted Effort

Question: Do you have an ongoing and working model to reduce bottlenecks, slowdowns, and inefficiencies?

In other words, are you actively looking and working to make things easier?

This applies to both the way your customers do business with you, and the way your team delivers your services. As we discussed last time, documenting and following systems is important. The danger is we get caught in the "that's just the way we do it" trap. Look, I don't like change any more than the next person, but when you discover a way to do something that makes someone else's life easier and it still accomplishes the end result, try that instead!

And remember it's not all about you and your team. Sometimes in our attempt to make things easier for us, we make it harder on the client. Not a good idea. For years in our gym we took attendance manually, you know, on actual paper. That meant the client never had to do anything except walk in the door. Sometimes we would check them off as they made their way in, or make a mental note and check them off later. It worked pretty well, but it wasn't perfect. We would invariably miss one or two throughout the day. Eventually we moved over to a new software that had attendance built in. This would surely make things better! We explained to our clients it had an app for your phone, so when you walked in the door all you had to do was open it up and check that you were here. Easy peasy, right? People are used to using their phones for all sorts of things, surely this would not be a problem.

Except it was. Clients left their phones in the car, "forgot" to do it, or just didn't care. We had added one more thing to their plate in order to get it off ours. The new system ended up being less efficient and less accurate than the old one. After a few weeks, we tweaked the system so we were doing the input again, just using software this time. The important take home here is we listened to what clients were saying. If we were stubborn and insisted it be done our way, it would have just led to bad feelings on top of it not getting done.

Often reducing bottlenecks and being more efficient is amazingly simple, if you are willing to listen to what your clients and team are saying. Sometimes "complaints" are key insights into what is causing friction with the way you do business, and wisdom listens, not dismisses.

If you want a happier team and happier clients, what is the one thing you can do today to make them want to press the "Easy Button"?

What’s the Big Deal About “Systems”?

If you've been in business for any significant length of time, you've probably heard and read it over and over - you have to have "systems" in your business. Systems for sales, and marketing, and service delivery. Systems for finances, and hiring, and team management. 

What you may not realize is regardless if you have all these things documented in a fancy manual, you already HAVE systems for each of these. As Mike Michalowicz writes in "Fix This Next", these systems are "In many cases...simply the routines you and your colleagues follow."

The question then becomes "Are the routines we are following efficient and predictable, leading to reliable outcomes?"

If so, the work becomes documenting those systems. You can write them in a manual, take screenshots, do video screen captures of the task being performed, or all of the above. The important thing is that the system is documented and able to followed by anyone.

On the other hand if your systems aren't working, the job becomes to find out why and work on improving it. 

The goal here is not to take hours and hours to write fancy manuals that nobody ever looks at and are hard to understand. 

The goal of creating (if necessary) and documenting systems is to help you Achieve Organizational Order.  

And not coincidentally, that is Level 3 on the Fix This Next "Business Hierarchy of Needs" (BHN). 

The way we define "Order" in this context is important. Order is not only about efficiency, productivity, and getting stuff done faster.

It's about creating a company that is not dependent on any one individual. Including you. Maybe especially you. 

A business that achieves organizational order is a business that runs smoothly when you take a vacation, or your admin is sick, or a key employee has to rush out of town on an emergency.

Here's a challenge for you. The next time you walk into a Starbucks, or Dunkin Donuts, or whatever your favorite place to get coffee is, ask to speak with the owner. Chances are, the team member standing at the counter won't even know who that is, never mind run out to the back to get them. How is that possible? Because these businesses run on systems, not on any one person. That is organizational order.

As we discovered on the Sales and Profit levels of the BHN, there are 5 key questions and needs on the "Order" level as well. Over the next few weeks we will cover each one in, you guessed it, Order.

See you then!

Cash Reserves for the Business Win

Cash reserves in your business are what will not only keep you afloat but also ensure that you have what you need to prevent an inevitable crisis should…I don’t know, a pandemic hit.

It’s something we need to…we must talk about.

If you have a copy of “Fix This Next,” go to page 115 and read (or re-read) that section. In fact it is so powerful that I am going to include the first paragraph here:

“Desperate people do desperate things. This is not a position you want to be in. Cash will help you avoid it, and generally speaking, more cash will help you avoid it more. An adequate reserve of money enables you to navigate unforeseen circumstances with confidence. To allow business operations to continue unabated, or to take advantage of an unexpected opportunity, your business needs two to six months of your average monthly revenue reserved in a VAULT account.”

The last question on the Profit level of the Business Hierarchy of Needs is:

“Does the business have enough cash reserves to cover all expenses for three months or longer?”

Most businesses we start working with would have to answer “no,” even before the present crisis hit.

For many business owners, these are desperate times. And while we can’t change the past, we can learn some lessons in order to help us prepare better next time.

And keep the ensuing panic at bay a bit.

Trust us, there will be a next time. It may not be pandemic level, but even the normal business cycle can cause a cash crunch on our businesses. And we can’t and shouldn’t count on the government to bail us out every time.

The good news is implementing the Profit First cash management system systematically and reliably starts building this long term savings (VAULT) account, month-by-month, by creating the good cash habits your business needs. The initial goal is to be able to cover three months of Operating Expenses, and then three months of Sales Income, into that account.

You may be thinking “no way can I do that,” and frankly you need to check that thinking at the door. Instead, start thinking how life would be different if you had been working on this before 2020.

I’ll wait while you think that through.

It’s not all negative, either. Your VAULT account has two primary functions: to cover expenses in case of unexpected business disruption and to take advantage of an unexpected opportunity. Imagine having the amazing property you have had your eye on forever come up for sale cheap, and you could pay cash for it, or even just put a huge down payment on it. Or paying cash when a closing business has a fire sale on their equipment. It’s a great feeling and so worth the effort.

Now that we have had THIS talk, give me a call and let’s talk about how to set it up in your business. Click here to tell us a little about your business and schedule an appointment.

Dancing With Debt

One of the most frequents subjects/question that has come up with my clients and peers recently is:

"What should I do with my EIDL loan?"

My observation is that many gym owners have moved on from the mindset of using the money for what it was intended - a short term solution to keep the business afloat due to decreased revenues from Covid-19, or as a cash reserve as we move into fall and the unknowns of a "second wave". 

Instead the thought process has evolved to "how can I spend it?" New equipment, building renovations, signage and marketing campaigns are all ways I have seen it being spent. In many cases credit was not previously available through normal channels prior to the assistance programs the government is now offering. Think about that. Your business could not support additional debt pre-pandemic. Revenues are down which triggers loan assistance under new government guidelines, often very large loans for a small business. What makes you think you are going to be able to afford to pay that loan back? 

All too often we are in the "monthly payment" mindset. We've been "taught" by those who are in the business of selling on credit - car dealers and real estate agents come to mind. It's not about what you need, it's "what monthly payment can you afford?" Look I have been sucked into this too. The whole point of the dance with the credit manager is to see what the maximum monthly payment you can "afford" is, and then find a house, or car, or refrigerator that stretches the upper limit. 

I've heard it more than once about the EIDL loan as well. The argument goes "It's only about $700/mo to pay back the $150,000 they gave me." Yes, that's true. Over 30 years and total interest of over $100,000! That's like buying another house. No thanks.

This is a relevant subject as we work our way through the Fix This Next Business Hierarchy of Needs.

Question #4 on the Profit Level is;

"When debt is used, is it used to generate predictable, increased profitability?"

Answering this question requires some discipline and work. When choosing to take on debt in your business, there needs to be a clearly defined and achievable increase in profits in a clearly defined time frame. There also needs to be ongoing measurements so when that isn't happening, you can take action by either adjusting the plan or pulling the plug on any more money being flushed. It''s the difference between "spending", and "investing". When you invest, you expect a return. I would suggest that every dollar you use be approached with this mindset.

My job is to help businesses create cash management systems that guide strategic thinking and decision making around their money. Dancing with Debt is Dangerous. You have to take the lead, not let debt take control. Know what you are getting into and why. Run projections that prove the debt you are taking on is an investment, not just a spend. Know when it's time to cut your losses. And always have a plan for paying it back. 

Are You The Only Choice?

Over the last few weeks we have been digging into the Profit Level on the Business Hierarchy of Needs. Question #3 relates to Transaction Frequency.

"Do your clients repeatedly buy from you over alternatives?"

As I considered how this question related to the fitness industry, I realized there are some layers to work through when it comes to answering that question.

It's no secret that there are many different options and modalities of training in our industry. Weightlifting, Powerlifting, Crossfit, Yoga, Pilates, HIIT; just to name a few. Attracting clients is one thing - keeping clients is a different thing altogether. We as consumers have pretty short attention spans, and are prone to chasing the "latest and greatest". In the fitness business it seems like there is some new fad coming out all the time. How do you keep clients from jumping ship and heading across town to the newest shiny object?

1. Know Who You Serve.

We have talked about finding the "sweet spot" in your business. Sometimes this is called a "Niche", but it's more than that. It's knowing what you do best and why, and finding clients who speak that same language. When you walk into our gym it looks very much like a Crossfit, but a dedicated Crossfitter would be very disappointed after a very short period of time training with us. That's ok. It's just not what we do, and trying to put a square peg into a round hole just isn't going to work. You can't be the only choice to everybody, but you can be the only choice to your ideal client.

2. Think Long Term Relationship

Relationships take work. It's not just a matter of signing up a new client and "setting and forgetting." Live up to your brand promise. Listen to what clients are saying. Genuinely care about your people. Remember details. And educate, educate, educate. If you don't want people "gym hopping" on you, you must be prepared to tell them why you do what you do, how that benefits them, and why alternatives may not suit them. You don't have to bash a competitor to explain why loaded box jumps might not be good for 60 year old knees. And it doesn't cost extra to care.

3. Build In "Longer Term"

There has been a move away from longer term contracts in the industry. "No commitment" is attractive to the consumer, after all. Now I am not saying you have to beat your customer over the head and try to force them to stay because they have a contract, but it does provide you some leverage. And it's more than that. From a training standpoint you know your clients need consistency over the long term to see results. Does it serve them well to offer punch cards and class passes, or would educating them up from about the importance of a training program be more beneficial? I can't answer that for you, however I believe the gyms that are setup for success long term don't just have random classes, they have a unified training philosophy. Yes, this requires more effort from the training staff and commitment from the client. That is a good thing because the client gets better results and you can charge more for those results. 

4. Find Ways To Do More Business With Current Clients

What other ways can you serve the clients you already have? What are they purchasing elsewhere they could be buying from you? Supplements, equipment like foam rollers and bands, and nutrition coaching are just a few of the things you can bring in house and increase your revenue. 

Creating a business where you are the "only choice" in the minds of your prospects and ideal customer will attract better clients, reduce churn, and put more money in your pocket. There are four ideas in this article. Which one can you put into action today?

Your Clients Care If You Are Profitable. Do You?

I'll bet that you have clients that really love what you do. They understand the hard work you put into serving them, appreciate it, and prove it by sticking around and paying you month after month. Those are the clients you want and need more of, right?

And they may not say it, but they really do care if you are profitable. Why? Because these clients also understand that if you aren't, you won't be around very long to serve them and to keep them happy. 

In the midst of the Covid-19 pandemic, businesses that were running on razor thin margins are disappearing by the hundreds. Where I live, we have seen restaurants and shops close down because they just can't make it on current income, and they had little to no reserves built up to withstand the current economic reality. 

It's happening in the gym industry too. Gyms are closing down, never to reopen. That stinks for the owner, but it also stinks for the community they served. People NEED the service you have now more than ever. It is your responsibility to make sure you are here for the long term.

It is your responsibility to operate a business that is as profitable as it can be. 

Question #2 on the Profit Level of the Business Hierarchy of Needs is:

"Do you have healthy profit margins within each of your offerings and do you continually seek ways to improve them?"

In other words, are you charging enough for the service or services you provide?

When I am working with a client who is going through the "Pumpkin Planning" process, we analyze each service to determine how much it is really making the business. Some gym owner's I work with have multiple service offerings; group training and semi-private for instance. All too often the pricing is really random, without understanding how it's affecting the bottom line.

For instance if my group training offering is $99/mo and I can train 15 clients with one coach, that's $1485 generated. If my semi-private is $300/mo and I can train 4 clients per coach, that's $1200 generated. Even though semi-private costs 3 times as much it's not generating as much income per session. And that's not the only factor to consider. For example what is the time it takes to write semi-private programs vs. group? Are group instructors compensated differently than a semi-private coach? What other overhead considerations are there?

Often we set our prices based on what others in our area are doing, or what we perceive the market will bear, or based on some head trash we are dealing with around our value. Sure, you can consider those (the first two anyway), but they can't and should not be the only way you determine your prices. Build your profit margins in right from the beginning. The Profit First system includes percentage targets for your Profit based on your sales income generated. For instance a healthy business doing between $500k and $1M a year should be generating 15% cash profit. Between $250k and $500k the target is 10%. If they aren't there now, what is your plan for getting them there? Do you even know what your overall profit margin is, and then have you broken that down?

If you haven't, you are not alone, and this is not an indictment on your character or your ability to run a business. The truth is that almost none of us have taken the time to figure it all out, because we are running around doing a thousand and one other things in our business.

And at some point, it's going to come back to bite us. Like it has so many businesses over the past 6 months.

Here's why healthy profit is so important in the context of the times we live in. When you have a healthy profit margin you can create a greater "business viability and survivability" margin. How much less stressful would your life have been over the last few months if you had 6 months of living and operating expenses saved up? That's doesn't just "happen". You need a cash management system that puts every dollar you earn to work in the right places at the right time, and a plan to help you reach your targets. You really can't afford to not put your Profit First any longer. It's time to take action and build the profitable business you (and your clients) always wanted. We can help.

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