Category Archives for Fix This Next

The debt load in your business has everything to do with the Profit you can achieve, which is why question #1 on the Profit level is;

"Do you consistently remove debt rather than accumulate it?"

Answering "no" to that question usually reveals a business that has a pretty short runway when it comes to both stability and viability.

It won't surprise you debt is one of the very first things we work on when implementing Profit First into your business. First we look at what the sources and amount of debt are, then create a plan to systematically pay it off. And we also record total debt at the end of every month. Without this awareness and keeping it in front of you, it's easy to ignore. 

At the same time we are going to take a good hard look at expenses. I know, I know, you are running "lean", but are you really? I can tell you first hand that you alone cannot be objective when it comes to reducing expenses. If you didn't "need" it, you wouldn't have purchased it in the first place, after all. Reality check. We ALL spend money on things we don't really need. And as Mike says, "If you can't pay your bills, you can't afford your bills". Having an outside advisor who can be non-emotional and objective about expenses is critical at this stage. 

The beauty of the Profit First system is it puts an automatic debt reduction strategy in place using your Profit Account. If you have outstanding debt, we use most of the funds in this account to accelerate your debt payoff. Why the Profit account? Because you are not truly profitable when you have debt. 

The freedom you will feel when you get out of debt is worth the short term pain of cutting expenses and running lean. Spending money is fun, I like doing it too. I racked up thousands in credit card debt for stuff I "needed". And it took years to get out of debt when I finally woke up to how foolish I was being. 

You can't change the past. But you can make better decisions now that affect your future and the future of your business. Think about it. How will your life change when every dollar you are paying in debt becomes a dollar that goes into your Profit account? 

Make It Happen. We can show you how.

Do you have a visceral negative reaction to the word "Profit"? Do all the stories of companies who maximize profit at the expense of quality, or people or the environment give you an icky feeling when you think about making profit in your own company?

Let's get real. You have to get over it. Don't let the negative stories about what other companies do block your pursuit of owning and running a profitable business. It's your choice how you are going to run your company. The vast majority of companies are run ethically and responsibly. Be one of them, and feel good about it.

Contrary to popular opinion, I am not cold and heartless. I care about my clients very much, but I am not a charity. And even if you operate as a not-for-profit, you still have bills to pay.

Remember, fulfillment of the terms of the agreement by both parties is included in and an integral part of the sales process. Selling to the right people matters. 

Here's a review of the Sales Level of the BHN.

1. Know what your sales level target is in order to support your personal needs as the owner.
2. Attract enough quality prospects to support the needed sales.
3. Convert enough prospects to clients to support needed sales.
4. Deliver on your commitment to clients on time, every time.
5. Every client pays on time and in full. 

Is your company fulfilling every component of the Sales Level of the BHN? If not, it's time to Fix This Next.

Let's Make It Happen.

After I got out of the service in the early nineties (1990's, not 1890's wise guy) I got a job as an assistant manager at a Domino's Pizza.

Back then Dominos had a very specific brand promise - Deliver your pizza in 30 minutes or you get $3 off (it used to be 30 minutes or free, but that only lasted a couple years, as it turned out to be a very unprofitable strategy).

This was a huge differentiator in the marketplace. Instead of waiting for what seemed like forever, you could ring up Dominos and you knew you were going to be chowing in 30 minutes. And if they didn't, you could tip the Pizza Driver $3 more, right you cheapskate?

So what's that got to do with your fitness business? 

Well you have a brand promise too, even if you don't formally call it that. People seek your services based on your advertising, or even better, word-of-mouth because of all your raving fans. There is an expectation every customer has when purchasing your service, based on what they have seen or heard about you.

Need #4 on the Sales Level of the BHN is Delivering on Commitments, and the question we ask is;

"Do you fully deliver on your commitment to your clients?"

The quickest way to lose business reviews and get a poor reputation is to let your customers down - to not fully deliver on your commitment to them.

There are subtle ways this can happen. If you advertise high energy, high intensity group fitness classes and play polka music, not only are you going to let people down, you are probably going to have someone suggest counseling.

Seriously though, this is part of the sales cycle we don't tend to think about as much, and we tend to be "either/or" rather than "both/and".

As in, either I am focusing on sales or I am focusing on service, rather than having the systems in place to make sure both are being done, all the time. 

One way you can identify if you have a problem delivering on your commitments is by measuring your churn rate. If you have as many people going out the door as you do coming in, you have a problem that you need to hone in on. Customer acquisition is a huge time and money suck when this is happening, and it can be pretty emotionally draining as well.

As an aside, we were always pretty pleased with ourselves that our retention rate was about 97%, until we realized that even at that, we were losing over 35% of our clients a year. Ugh.

Delivering on your commitments means doing what you say you will do, every time. and if for some reason you can't, you need to communicate why, every time.

Are you delivering on your commitments? Do you have the feedback system in place to prove it? Do you have systems to make sure sales and service are not mutually exclusive?

Make It Happen!

In the book Fix This Next, author Mike Michalowicz writes "Conversion is consideration of both sides. What do they want and what do you want." When those two things are in alignment, conversion naturally becomes easier.

We tend to focus on what the clients wants, which is natural. But have you put as much consideration into what you want out of the deal?

When we work with our clients using our Pumpkin Plan tools, one of the things we determine is your Sweet Spot. Do you get the most joy out of selling on price, convenience or quality? (hint: you can't successfully do all three).  What type of clients do you really enjoy serving? What products or services do you really love delivering? 

Is that what your company is doing, right now? 

It may seem strange to introduce the "joy" component so deeply into a discussion revolving around sales and client conversion. But life is too short to serve customers you don't like with an offering you hate delivering at a price point that you know is too low. You didn't start your business to get the life sucked out of you, but that's sure to happen if you don't nail your Sweet Spot down, like right now. 

I'll come out and say it. I strongly dislike delivering personal training, I like semi-private better, but I love coaching group fitness. Don't be a hater, it's just what I like doing. We'd been open a few years and were being encouraged by a coaching program I was in to start doing more semi-private and personal training, and I let myself get pressured into it.

The result?

We failed to get any traction, and it's not a secret why. I didn't like personal training, and I was convinced our group training was just as high quality as anything I could do semi-private. My heart wasn't in it, I didn't feel good about marketing it, and it didn't get the attention it deserved. 

Bottom line. I found no joy in it, so I self-sabotaged the effort. What a baby, huh?

Now you may love training clients one-on-one and have the most incredible semi-private offering ever. That's awesome. You do you. And don't let some expert tell you otherwise.

And once you find out what "doing you" means, ask these questions:

• Is my company story consistent with it?
• Is my pricing consistent with it?
• Is the experience I deliver consistent with it?

When these consistencies are achieved, when you have found your Sweet Spot and are living by it in your messaging, marketing and sales process, converting prospects into clients becomes a much, dare I say it, sweeter process.

And I'll go one step further. If you don't find alignment between the customers needs and your needs, you will continue to waste money on marketing that doesn't work, a muddled sales message, and a stagnant business. 

And life is too short for that too.

Make It Happen!

Remember when you were getting ready to launch your business? The excitement that you felt? All the hard work you had been doing was finally coming to fruition. Your space was setup and ready to go. Your equipment was gleaming. Your programming was the best you had ever crafted. Website up and running - check. Billing system ready to go. Time to open the doors!

And people did show up. And it was all good. Until it wasn't. 

You see the problem with people showing up is that they are, well, people! With all their quirks, problems, likes and dislikes and personalities. We human beings can just plain be hard to deal with sometimes. 

Which is why it is so important that we focus on getting the "right" kind of people through our doors.

Need #2 on the Sales Level of the Business Hierarchy of Needs is Prospect Attraction

But not just anybody will do. 

The right kind of person for your business doesn't mean that they are a good or bad person. But they might be a less than ideal fit for you and your gym. Every gym I have ever been in has its own unique personality. I'd fit in some, others not so much. It is crucial that you get this right, or you are going to be wasting a lot of time when it comes to selling. If you are a power-lifting gym, and you are getting a lot of interest from prospects looking for Yoga and Pilates, your messaging needs to be tweaked, just a bit. 🙂

In the beginning we just want bodies in the door, I get it. But as your business grows, you'll want your message to be laser focused on the clients you serve best, AND the clients that will serve your business best. If your space is high energy, with lots of laughing and smiling and joking around, don't be afraid to show that personality in your marketing. You'll get more of those type of people in the door, which will only add to your already rocking place.

Look I know this isn't a new concept. Client "Avatar's" have been around forever. That's not in question.

What IS in question is have YOU done the work to create YOUR ideal client? The client who has that specific need that for who your company is the perfect solution?

When you do, and you craft your marketing so it speaks to that person, you'll attract the right kind of people to your business, save yourself a lot of time and money, make more sales, and create more profit.

Attracting prospects with that "Certain Quality" matters. We can help.

What are your company's sales goals?

You have one, right? Ok, I am going to go out on a limb here and say you do have a sales goal for your business. If you don't, no problem. I am going to explain to you the best way to set it.

For those of you who do have a sales goal, how did you arrive at that number? Was it based on past or current performance? What you have seen others achieve? What you thought sounded good? Something else?

I'll be totally honest. When I set the revenue goals for our gym, it was driven by nothing more than ego. In fact, in the beginning, it wasn't a revenue goal at all, it was the total number of clients. I figured when I hit 100 clients I'd be golden, never even taking the time to think what that actually meant revenue wise for the business. Or even more importantly, for me. (Yeah, I like to eat too). 

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...

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?

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.