As a fitness business owner, you may not have heard of Profit First yet. Or, maybe a fellow fitness biz buddy told you about this awesome book they read that changed their life. No, joke some people really say that! Well, Profit First is not just the title of some book! It is a method that when implemented correctly could be a life-changer in your business too with one flip of an equation.
Instead of taking your profits after paying all of your expenses, and therefore always having an excuse as to why you can’t draw an income, you should be taking your profits before paying for those expenses. Once you begin utilizing this equation for the finances of your business, you will know where your money is going each month, while seeing a profit and even growing an emergency fund.
How the Profit First Method Can Position You to Withstand Changes in Your Market
When you create the Profit First percentages for your business, you will be going through and cutting all unnecessary expenses. This step will already put you ahead of your competitors if there are any changes in your market. While other fitness businesses might start struggling, because they still have those extra expenses to cover, you will still have money in the bank.
Since you are always set aside a percentage of your income for taxes with Profit First, you will never need to know where your next tax payment is coming from. You simply just add a percentage of your income to this account each month and use it when it comes time to pay your quarterly taxes.
Utilizing Profit First will ensure that you are always setting aside a percentage of your income as profit. While you won’t want to use this money for anything else, and I don’t recommend using it as a rainy day fund, it can help if there are changes in your market.
If you want to truly protect yourself when there are changes in your market, you need to create an emergency fund. This will ensure you have money set aside for when you aren’t bringing in the income you need to. While you will want to always have different income streams, an emergency fund can buy you a little time to create a new one if necessary.
There are so many other ways that Profit First can help you withstand changes in your market. I would love to set up a time to chat, so we can get Profit First implemented in your business. And if you are utilizing Profit First already, we can make sure you are doing everything you can to ensure the best results when changes in your market do occur.
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