So financial management.
So first we're gonna start out by looking at kind of what our expectations are
or should be,
and then we'll start diving into kind of the more business side of things.
So expectations when we're starting out. So toga,
this will be for those of you who are just starting your business or preparing
to start a new business in the fitness space.
Those of you that are already running businesses, uh, our business owners,
gym owners, et cetera,
this will be a very quick recap before we dive into the next section later on.
So obviously the fitness industry does not guarantee success.
I know there's a ton of people out there saying how easy it is to make six
figures. For some reason, everybody is, is stuck on, you know, a 10 K month. Um,
but the reality is over 80% of gyms and studios fail in the first year
and over half of the remainder fall within the ne fail within the next five
years. So those are tough models. There's a lot of overhead, a lot of expenses,
and a lot of things to consider when running physical spaces.
But a lot of this also applies to the, in, to the, uh, online space, right?
So it's like because there are, you know, so many people doing online stuff,
especially right now, there's a lot of competition.
We have to understand what our expectations are for ourselves going forward.
Before we kind of, you know, maybe you're already working in nine to five,
before you jump into this head on,
we need to set our expectations accordingly and plan so that we are not getting
in over our head right away. And we set ourself up for more likely to succeed.
The most cited causes for why these fail. And of course,
this transfers right over to, you know,
whether you're doing online coaching or eBooks, what have you,
is lack of a business plan under lack of understanding the business management
or financial side, and then sales and marketing strategies.
So this course we're gonna touch on,
we're touching on kind of the business plan, business management,
financial stuff, sales and marketing strategies.
We talked a little bit about earlier in the previous MODU modules,
just to get you started with it.
Obviously there is a ton more we could go into there. Uh,
and we may at a later time.
This is obviously a highly competitive space.
Getting recognized takes time, uh, or, you know,
some miracle of viral video, uh, that immediately happens,
which obviously is the 0.0,
0, 0, 0 1% of people that that happens to. And when you're getting started,
it may not pay all the bills.
So we need to account for this when we are planning our or
building our business plan.
So the first recommendation if you're starting on your own is have about
one year of estimated expenses saved up.
And that is not just your living costs,
but the expenses you expect to incur while running the business,
right? So that's going to be everything from, uh, you know,
your licenses for your, uh, online platforms and things like that.
And then number two, pay attention in this course.
So now as we're planning ahead, again,
you can quickly review modules one to three as we kind of outlined in there,
what we're going to want to look at before kind of diving in.
And then next we will talk about budgeting.
So when we're kind of putting all this stuff together, uh,
and we'll talk about more in depth on expenses and investments in the next
module, but we need to have some kind of pricing model. How are we, uh,
predicting our revenue?
So we talked about that being dependent on are we using more of a subscription
based thing? How long our, uh, average contract is?
If we have a minimum requirement for months of online coaching,
minimum training sessions, that type of thing.
Are we expecting some seasonality?
Depending on what type of products we're doing. Operating costs,
obviously those are gonna be higher for the in-person stuff, right?
We have our utilities, our rent, uh,
but you could also include things like internet, um,
software licenses and things like that. Simple living expenses for yourself.
Obviously you still need to eat, you need to, uh, put gas in your car,
pay for your car, mortgage, rent, uh, cell phone bill,
all of those type of things. How much are we investing, right?
Not just in the business, but are you saving for retirement? Um,
but we need to be putting, uh,
at least some cash aside from the business side to potentially try and expand
our business. So we need to account for that as well. Again,
we'll cover that in the next unit.
And then the one that makes everyone pull their hair out is taxes.
And don't worry, we will get into that shortly, of course.
So 20 grand in revenue is great,
unless you have 18 grand of monthly expenses too,
then it can, you know, put a little bit of pressure on you.
So when we're trying to build our budget,
we need to have an estimated gross income.
So subscription's obviously a little bit more predictable, hopefully. Products,
uh, I would recommend using like a monthly average. And again,
potential seasonality. So you may see, uh, you're doing some, you know,
get lean for the summer stuff.
Obviously that'll sell better towards the beginning of the year. Um,
nutritional advice around eating around the holidays,
staying lean around the holidays obviously gonna be more holiday dependent.
And then our expenses, like we talked to the fixed versus scalable.
So obviously tax expenses are going to increase.
The more you make more sales tax you have,
if you're having people selling for you, um, commissions are going to go up.
The more revenue that comes in,
that will bring you to kind of your estimated net income once we subtract, uh,
the expenses from the estimated gross.
And then step four is what we want to do with any remaining cash.
Are we putting some away in, you know, savings?
Are we putting some in our marketing allowance to try and build,
build the brand? Do we have some for investment?
Are we saving up to buy a new piece of equipment, uh, a new piece of software,
hire a graphic editor, uh, hire a copywriter, all of those types of things.
So looking further into these ones. Um, so to the general recommendation,
perhaps you've gotten this in, uh,
a previous financial management course or class,
recommending that having at least six months of expenses covered,
obviously the more is better. And then marketing allowance. Uh,
ads not always essential right away.
Most people starting organic is probably the best way to go.
Obviously more cost effective. Um, and then are you contracting, uh,
people to, you know, help with video editing, graphing, editing, copywriting,
those type of things. And then investment allowance.
So efficiency tools would be like, uh,
having someone build a feature into your website, for example, uh,
someone designing an ebook for you. You write the content,
you have them make it equipment, that type of stuff.
If you're starting with the paid marketing stuff,
typically the recommendation is starting low anyway, you know,
five to $10 a day. Uh,
there's plenty of like free Facebook marketing stuff that they have available.
So I won't go through that here. Um, we'll spend our time on other things,
but only scaling up once you start seeing that you have enough, uh,
success to start split testing things and getting a result,
rather than just dumping a hundred dollars a day and, you know,
praying that it's going to work out and bring you more clients.
So next,
we're gonna break down some of these pieces a little bit further as we get into
talking about expenses versus investments.