All posts by Dean Carlson

Fix This Next Fundamentals – Sales

At the foundational level of the Business Hierarchy of Needs (BHN) is the creation of cash, otherwise known as Sales. 

Does that word bug you? If so, as a business owner, you have got to get over it. You can have the best product or service in the world, but until there is an exchange of value - your customers money for your products and/or services, you don't even have a business. 

And there is a lot more to sales than just getting the credit card number. In fact I would consider that somewhere in the middle of the whole process, especially for a service based business. My observation and experience has shown me that most sales and marketing strategies focus on two primary things; attracting prospect and converting them to clients. Makes sense, I mean that is what sales and marketing does, right? Yes, but on the other side of that are two very important "commitments" that must be kept.


1) Your Commitment To Your Client

The Fix This Next assessment asks this critical question: Do you fully deliver on your commitments to your clients?

In other words, do you consistently deliver your brand promise, and is the client getting what they paid for? In a gym setting, your retention % and churn rate are good indicators on how you are doing.

2) Your Clients Commitment To You

Do your clients pay on time, every time? Do you have to chase people for money? Do you have systems in place for getting paid and follow up processes for overdue clients? This is all part of the sales process. A sale is not complete unless and until both parties "keep their end of the bargain".

Remember I said "the sale" is the middle of the process? The back end of the process is the two commitments, so now let's talk about the starting point of the sales process.

You.

The very first question on the Sales level of the BHN is also the one I see answered "no" to most often. Here it is:

"Do you know what the company's sales performance must be to support your (the business owners) personal comfort?"

This is what Fix This Next calls "Lifestyle Congruence", and it's the number you want to know first.

I'm not pointing fingers here. If you had asked me that question when I started my business I would have had no idea, or how to figure it out.

But without that number, your sales goals (and mine) are arbitrary at best. Heck when I started my gym I thought if I could just get reach $10,000 in sales a month I would be living large, without even thinking about how much that put in my pocket. Reality caught up with me pretty fast. Bills are real.

So here's how the Fix This Next sales "funnel" flows...

1.

Lifestyle Congruence

2.

Prospect Attraction

3

Client Conversion

4.

Delivering on Commitments

5.

Collecting on Commitments

Having these 5 core sales needs satisfied is absolutely necessary to create the cash flow every business needs to establish a solid foundation. In fact this blog post is part of that whole flow. We are looking to attract business owners who are ready to take the next step and looking for guidance to solve their biggest business challenge.


If that's you, and you aren't absolutely sure what your biggest challenge is, take the free Fix This Next evaluation here, and I'll follow up so we have an opportunity talk about how to solve it. Let's get fixing!


Creating Confidence During Crisis

Are you confident that you are making the best decisions and working on the right things to move your business forward, especially during these turbulent times?

Face it. The "Coronavirus Crisis" is real. I don't use the word crisis lightly. Small business is suffering. Fitness businesses are suffering. Your business is very likely suffering to some extent. Some of my clients have seen revenues drop 50% or more. I don't care how stone cold you are, that can cause a crisis of confidence. 

The reality is that for many businesses, COVID-19 revealed shaky foundations. For over a decade, we have seen a largely thriving economy, credit has been easy to get and is cheap, and consumers have had a lot of disposable income. Because of that, many of the basics of good business got ignored; keeping a low debt-load, running expenses lean, building an emergency savings fund. All things that would make a big difference now. It is my hope those businesses that survive learn those lessons for next time. Yes, there will be a next time.

It is not my intent to pile on. We can't change the past. But we can chart a better path forward. The question is not "what did we do?", but "what can we do now to create even better businesses as we recover from the present crisis?"


During the best of times the biggest challenge business owners face is not knowing what their biggest challenge is. That certainly has been true in my business. We are subject to the "tyranny of the urgent", running around trying to put out fires, while never getting a handle on what should be the priority. This is called "The Survival Trap".

Does this look familiar?

There is a crisis in your business. You have run into a cash crunch. Your bank account is getting low and you need to raise cash fast. The obvious thing you need is more sales, right? So you try a bunch of different things to generate cash, focusing all your efforts on sales to cover your bills - for now. But you can only run so many sales, or deal with so many crappy clients, or hire so many outside experts. What are you going to do when it happens again next month, or a couple months down the road? Are you SURE it was a sales problem to begin with?

You can be.

A couple of weeks ago we posted an article about the Business Hierarchy of Needs, which outlined the five different core functions found in every business, and every fitness business.

Sales - The Creation of Cash

Profit - The Creation of Stability

Order - The Creation of Efficiency

Impact - The Creation of Transformations

Legacy - The Creation of Permanence

The goal is to have each one of these core functions working together seamlessly, so you can achieve permanent, healthy growth and move toward your company's vision.

In our example above, the low bank account may not have been a sales problem at all, but a cash management problem (the Profit level) or an efficiency problem (the Order level).

So how do you know? How can you create the confidence that the action you are taking is actually solving the real problem, not just covering it with a band-aid?

That's where the "Fix This Next" Assessment comes in. This powerful tool identifies the Next Vital Need in your business, so you can immediately know where to focus to level your business up. THAT is how you create confidence during crisis. Once you have identified your vital need, you can immediately put into action a plan to resolve that need. 

So here's my ask. Take the Fix This Next assessment by clicking the button below. It's a series of 25 questions that covers all the levels of the BHN, and it won't take you more than 10 minutes. Stop guessing what your fitness business needs to level up and take action now.

Summary Guide to Gov’t Resources/CARES Act

Download the PDF for the for the best guide I've seen yet to decipher the CARES Act for business owners. Thank you to Verne Harnish for sending it over, and to Greg Crabtree of Simple Numbers, for sharing this resource.

Recession Response Plan

Produced by our partners at MikeMichalowicz.com, The Recession Response is an action plan for small businesses to implement now to preserve and manage cash flow. I appreciate Mike and the team for responding so quickly to the current conditions caused by the Coronavirus pandemic

Download Your Copy Here

3 Down, 1 To Go

It's hard to believe that we are almost 3/4 of the way through 2019. In the US you just sent your quarterly tax payment in (it was due Sept. 16).

Or did you?

Take it from me, you DO NOT want to owe taxes to the IRS. I have been there, and it's the worst. Talk about sick to your stomach. 

It's crucial you are proactive regarding your tax situation. Here's what you need to do going into Q4. 

1) Check in with your accountant and/or tax preparer today and have them report to you on your tax position for the year so far. If you have grown this year it is very likely you will owe more tax than you have been sending in quarterly. Starting to prepare for that NOW will save on your antacid bill on April 15th. 

2) If you haven't already, separate the taxes you will owe from your operating account. It's too tempting to "borrow" money from your main account and then never put it back. The minimum you should be putting away is enough to cover quarterly payments. Take it out of your Operating Account and leave it alone until you have to write that wonderful check to the tax man. You'll be glad you did.

Those two simple steps will help make sure you don't dread the next tax deadline, by being prepared and having managed your cash well.

Now go do it!

Trust The Process

​But to trust the process, you have to have a ​process that is proven to work, time after time.

​When it comes to making every dollar count, do you?

Better Is Better

In one of Eric Cressey's latest articles, he reminded me that "Bigger Isn't Better, Better Is Better", and went on to state...

"I think you're better off taking home 50% of a $500,000/year fitness business than net 5% on a $5 million/year one."  Do the math. 🙂

Couldn't have said it better myself (no pun intended). A business that is 10x bigger is probably going to cause you a lot more than 10x the headaches, for the same take home. 

Now I am not here to crush dreams. If you want a $5 million company that brings tremendous value and impact to the world, do your thing. All I am asking is you count the cost first. One of the mistakes I see many owners is chasing a big business before they nail down the fundamentals of business. 

I used to think that getting bigger would solve all my problems. More income = more money = more flexibility, right? More stress, yes. More money in my pocket, not so much. As Profit First author Mike Michalowicz says  - It's easier to control a $10,000 a month cash eating monster than a $100,00 a month cash eating monster. 

Here's my advice.

Get REALLY good at what you do when your business is small. Perfect your craft. Develop your systems. Crush your debt. Learn to use every dollar to its maximum potential. You may find nailing down those skill gives you exactly the business you want. And if you do decide to scale, they will give you the foundation to do it right.

Better Before Bigger. 

Because bigger isn't better. Better Is Better.

Live It.

What Exactly Do I Do?

From Merriam-Webster dictionary
coach
noun, often attributive
1a: a large usually closed four-wheeled horse-drawn carriage having doors in the sides and an elevated seat in front for the driver
//On special occasions the queen rides in a gold coach.

b: a railroad passenger car intended primarily for day travel
//Smoking is not permitted in the train's coaches.

The original meaning of the word "coach" was as a description of transportation; a means of getting from Point A to Point B. 

The same applies to a coach as we usually hear it today. A football coach, a basketball coach, a business coach. They all are trying to get their players/clients from Point A to Point B; from a good player to a great player, from flawed mechanics to good mechanics, or from one level of success to another.

My role as a Profit First coach is no different. It's to get your business to next level.

The truth is most of us didn't get into business to crunch numbers all day, and struggle to answer financial business questions like; 

How much should I be making as the owner?
How do I know if I have a healthy profit margin?
Am I going to have enough for taxes this year?
Can I afford to hire some more people?
When is it the right time to scale?
Will I be able to sell my business and retire?

Not knowing that stuff kinds sucks, and usually leads to a lot of second guessing. 

So I help solve that problem by coaching you through a system so you can easily manage your cash and give a purpose to every dollar you make. 

The biggest benefit? The two "C's" - Clarity, and Confidence.

Clarity around your finances; we take the complicated right out of the equation. That clarity in turn creates the Confidence you need to hit your goals, grow your business, and keep more of your money. 

Get from Point A to Point B. Faster and more easily.

If that sounds good to you, let's talk. Just click the button below. 

The Myth Is Real

One of the first business books I ever read was "The E-Myth" by Michael Gerber. And while this book certainly was foundational in the way I thought about business I also believe it is one of the most misunderstood business books out there.

As a brief overview, the concept of the E-myth revolves around the fact that many businesses are started by people who are really good at what they do - the "Technician" - not being able to make the leap to true "Entrepreneur", thereby never allowing the business to reach it's full potential. For instance a genius computer coder who loves programming so much he never develops the skills needed to run a viable business, so his amazing work never achieves any significant market penetration. 

The fact is that it's not always the best products and services that win. It's the company that best communicates what they have to offer, and then delivers that offering efficiently (has good systems - another Emyth core concept) that usually wins.

That's why the book tells us we as Entrepreneurs need to work "on" the business, not "in" the business. The role of the Entrepreneur is to develop systems and processes that answer the question "How will this business work best?" And while this is true, this is also where I see a lot of business owners really screw up.

You see working "on" vs. "in" is not an "either/or" proposition. It's "both/and". 

In other words it's very unlikely you as the owner can be doing nearly all the "technician" work one day, and then the next day handing it all off to someone else so you can go "create systems".

I see a lot of businesses get in financial trouble trying to pull this off. They hire too many people too soon, which almost always results in the owner earning less than they should from the business. The justification is that they need people to grow the business, so they'll take less until sales increase to where they need to. And 5 years down the road they are still stuck.

And selling the business? No buyer is going to touch a business where they can't step in and earn a return on their investment, the baseline of which is what they will make as the owner.

The "Sell to Entrepreneur" continuum will look familiar to those who have seen Fitness Revolution's "5 Stages of a Fitness Business Owner". You can check out Fitness Revolution's work here.

It's better to think of "on" vs "in" as a continuum. You gradually hire and offload technical tasks as sales increase, not hire and hope. You forecast how the additional payroll will affect your profit margin and labor rate, and you leave owner's pay out of the equation. When our clients are ready to add employees, we set up a "new hire" account and allocate into it for 2-3 months before the actual hire is made, which allows us to evaluate how cash flow is affected before a new employee is on-boarded and then "whoops, what happened to all our cash?" That can get really awkward, really fast.

Work on your business, yes. Just keep in mind that it is usually years before a business is mature and financially stable enough to support the owner doing none of the technical work. Do the work necessary to understand what size team your business is able to support and where you currently are on the "on" vs "in" continuum. Then create a plan to get you from where you are to where you want to go, without unnecessary financial risk or stress.

I am here to help.

- Dean

2019 Is Half Over. How Are You Tracking?

One of the things Alwyn Cosgrove taught me is that you need to be constantly tracking progress to goal. Every year he sent out a post at the beginning of July which reminds you that it's halfway through the year, so you should be 50% to your (insert weight loss or fitness performance goal here).

The same thing is true of your business.

By now you should have your Q2 numbers in hand and be evaluating your company's performance over the first half of the year.

Now is the time to compare your actual Year-To-Date progress with the goals you set for your company at the end of 2018 (You did set goals, right?)

At the least you will want to see how your sales are tracking compared to Q1 2019 and also compare to Q2 2018. You can pull a Profit & Loss and Cash Balance report from your accounting software and run those comparisons. You will also want to compare your total expenses for the same periods and evaluate the ratio of expenses to sales. Evaluating expenses on a quarterly basis, and working to increase revenue at a greater rate than expenses, is one of our primary focuses with my FFP clients, as this is how greater profits are created.

One of the other things I do with my clients is make their financial lives easier. The less time it takes to get information that matters (eg. helps make better decisions) the more time you have to focus on other areas of your business.

For my clients using the Fit For Profit Dashboard, there is no extra work involved to comparing their quarterly financial performance at a glance. Every time they calculate and record an allocation, the dashboard automatically tracks performance on a monthly, quarterly and yearly basis, and shows progress to goal.

Here's a (not so) top secret video walkthrough of "Tab 6.0 - PF Allocations", a Fit For Profit exclusive available only to FFP clients.

Please expand the video to full screen for best viewing.

The fact is that if it's not easy to do your financial comparisons, you are probably not going to do it. As a small business owner you are pulled in a hundred different directions, I get it. My mission is to simplify your life and make your cash work for you. This is one more way to make that happen.

Q3 will be over before you know it. Schedule your Profit Maximizer Call today and let's talk about how to make managing your cash easier.

>