012 How to Create a Profitable Health & Fitness Business Model

In this episode, I'm going to introduce you to the Profit First model, a tool that can illuminate the true profitability of your business. Having personally experienced the transformative power of this model in my own ventures, I now share it with my clients to steer them away from the pitfalls I once encountered.

Let me take you through why I consider this the crucial first step for any business owner, and why I'm so passionate about sharing it with you.

I'll explain the Profit First methodology, one that allows you to gauge whether your health & fitness business is set up in the right way.  By right way, I mean... a business that can give you what you want financially. 

Drawing from my own experience, I recount the challenges I faced in my initial fitness training business, which despite a decent revenue, failed to yield enough profit. I discovered that increasing courses and expanding geographically only led to higher costs and more stress. Eventually, I had to make the difficult decision to close the business. It was only later, after stumbling upon Mike Michalowicz's book "Profit First," that I understood where I went wrong. This revelation ignited my commitment to ensuring my clients don't repeat my mistakes.

Key Takeaways:

1. Assess Your Business Model: If your costs outweigh your revenue, it's crucial to evaluate your business model. Determine if it has the potential to be profitable or if changes are needed.
2. Understand Your Cost Percentage: For businesses with an annual revenue under £250,000, operating costs should ideally be around 30% of the income. Assess your own cost percentage to see if it aligns with this benchmark.
3. Filling Capacity: Consider whether increasing clients or members will lead to higher costs or if your existing setup can accommodate growth without significantly impacting expenses.
4. Tax and VAT Considerations: Remember to factor in tax and VAT payments when assessing your profit margin. These additional expenses can significantly impact your bottom line.
5. Build a Reserve: Aim to accumulate a reserve equivalent to three months' worth of operating costs. This buffer provides financial security and better decision-making in times of uncertainty.
6. Customise Your Approach: Every business is unique, and what works for one may not work for another. Tailor your financial strategy to suit the specific needs and goals of your business.

Thank you for joining me on this episode of From Passion to Profit. I encourage you to take a closer look at your business finances and consider how the Profit First model could potentially transform your venture. If you found value in this episode, please leave a review and share your insights. Your experiences may inspire others on their entrepreneurial journey. Don't forget to subscribe to receive future episodes directly. Until next time, take care.

Resource Links:

• Join The Health & Fitness Business Members Club : https://join.thehfbc.com/club-membership
• Book your Business Strategy Call (availability is limited each week): https://join.thehfbc.com/schedule
• Website: http://www.thehfbc.com
• Facebook: https://www.facebook.com/healthandfitnessbusinessclub/
• Instagram: https://www.instagram.com/nicholapageofficial/
• LinkedIn: https://www.linkedin.com/in/nicholapageofficial/

Chapters

• 0:00 The profit first model for creating a profitable business
• 4:05 Financial mistakes in small businesses.
• 8:31 Profit margins and cost management for small businesses.
• 13:46 Business cost management and profitability.
• 18:40 improving business profitability.