Ryan Carver
GET POSITIVE ABOUT CASH FLOW 5 steps to get a handle on your cash flow
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undreds of articles and books focus on starting your own business, business finances, accounting and so on, yet most of them fail to address how you can make it in this business by keeping a positive cash flow. It’s probably because it isn’t popular. We want to advertise that being a fitness professional is glamourous and lucrative. We’ve gotten into the mindset that happiness and success is measured by what you spend. Real success is quite the opposite. This industry is unique in many ways. Revenue can happen relatively quickly offering a service that improves your clients’ lives. However, some months are better than other months. Often, fitness professionals struggle with mak-
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ing ends meet consistently because when they have a good month, they make a lot of money. Conversely, on ‘leaner’ months, they don’t make enough. There are a few consistent actions you must take in order to keep your business thriving in a place of positive cash flow.
GIVE YOURSELF A SALARY Simply put, figure out the lowest possible salary you can live off of (covering all payments and debt obligations) and pay yourself that. That’s right, the lowest, not highest. This requires a true heart-toheart with your bank account and budget. This simple tip helps regulate the cash flow. This principle works whether you are a W2 employee or 1099 independent contractor. It works whether you are just starting out in your
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career or have been in the industry for a decade. If you can live off of just $2,000/month, for example, you know you need to make at least that, if not more. On the great months when you make $9,000, you still take your $2,000/month salary, banking the rest. On the worst months when you only generate $1,700/ month, you still take $2,000/month. It works because you aren’t always changing your salary/wages and are creating a little reserve or hedge. Too many fitness professionals get in trouble if they have one or two bad months. It needn’t be the case.
BUDGETING BASICS If you hope to know how much you can realistically afford you need to know your personal