If there was ever an industry whose owners should understand the need for discipline and diligence around bookkeeping and accounting, it’s those who work in the fitness industry. Personal trainers and gym owners are perpetually encouraging their clients to set an intention, make a plan, and then stick with it, yet those very same individuals are so averse to keeping up with their general ledger that it’s the rough equivalent of a client buying a membership on January 2nd, working out religiously every day for two weeks, then disappearing again until two weeks before bikini season.
We’re not here to judge …. we’ve fallen off a workout wagon or two over the years, so no shame about falling behind on your bookkeeping. At the same time, just as setting a manageable, realistic training schedule is the best way for your clients to achieve their fitness goals, the same is true for your financial stability goals. Fitness businesses face unique cash flow challenges that are best managed by establishing and sticking to a regimen.
The Challenges of Running a Fitness Business
Your love of fitness has driven you through your best days and your toughest times and has inspired you to live your dream, share the joy — and make money while doing it. Unfortunately, there’s more to business success than helping people lose weight or get cut. To be successful, fitness businesses need to establish regular clients, keep bringing new people in, and find ways to add cash – whether through events, guest passes, snack and drink sales, or branded merchandise. It’s a never-ending drive that makes sitting down and recording revenue and expenses feel like drudgery.
Equate Getting Financially Fit with Being Physically Fit
It’s that sense of drudgery that you need to grab onto in the same way that you want your clients to take hold of the fitness challenges you present to them. Here are the exercises you need to add to your daily routine that will keep your business moving forward in a healthy way.
There is a real need for fitness clubs to have a day-to-day understanding of their cash flow, and though using an accrual method of accounting makes more sense in terms of understanding your total income and debts, cash flow reporting will help you to see exactly how much cash you have in hand at any given moment to help you make important decisions about what you need to do. One of the most successful ways to approach the need for both long-term and short-term insights into your financial situation is to do both annual planning with a monthly budget and a weekly cash flow forecast that helps you see where your money is coming from and where it is going.
Add your accounting tasks to your calendar. We know that keeping track of all of your transactions is no fun, but if you make a date with yourself on a daily, weekly, or monthly basis to do so, you’ll have a much clearer sense of the progress you’ve made or the financial needs that require attention, and you’ll avoid getting behind and letting the required entries pile up.
Invest in a software program to help you keep your bookkeeping under control and provide you with the ability to easily communicate your data to your accountant and transfer it into a tax software program.
Make sure that all of your business accounts are entirely separate from your personal accounts. It may be more convenient to pay for everything (and take money in) on one account, but you can easily get into trouble, and lose track of how much money you’ve made – or lost – when you mingle your money.
When you decided to take the leap into running your own fitness business, you did so because of your love of the workout and helping others to improve their physical and mental wellbeing. You never pretended to be a math or accounting genius – and you don’t need to be one. You do, however, need to be a responsible business owner who keeps up with the minutia of entrepreneurship, whether that means applying for a business license, paying for rent and insurance, or keeping track of your cash flow. There’s no need to do the heavy lifting yourself. If you need assistance with any of these tasks, contact us today to set up a time for us to chat.
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