Managing the financial side of your business doesn't have to be a headache. In this article, we're dishing out some fantastic financial tips that can be implemented whether you are a newbie business owner or a seasoned expert. By following these friendly strategies, you can keep your sports and fitness business in top financial shape, ready to conquer any challenge that comes your way.
1. Craft Your Game Plan
Start by mapping out your financial future. Just like in fitness, you need to set clear goals – both short and long-term. E.g. a short-term goal for a sports therapist could be to make enough profit to be able to purchase a new massage couch by the end of the quarter. A long-term goal for a personal trainer could be to increase revenue by 15% for the tax year.
Dive into your current financial status and pinpoint areas where you can grow. Embracing user-friendly accounting software can help with this and keep track of your progress. When you understand your numbers, you're better equipped to make smart financial moves. Examples of accounting software are QuickBooks and Xero. If these tools aren’t an option, recording your finances in a spreadsheet will still give you an idea of your numbers.
2. Build Your Money Cushion
Think of this as your financial safety blanket. Allocate a slice of your earnings to create a cushion, equivalent to three to six months' worth of expenses. These reserves act as a buffer, providing you with the flexibility to cover unexpected costs and navigate challenging periods. Financial stability allows your business to thrive regardless of market fluctuations.
For example, a running coach’s monthly expenses are £500. Ideally, they should aim to have a reserve buffer of £1,500 to £3,000. It doesn’t only make good financial sense, it reduces stress by giving you peace of mind, too.
3. Test Your Business
In sports, fitness testing is quite common and it helps to establish your strengths as well as areas you should work on. The same is true in your business.
Proactively assess the resilience of your business by stress-testing various scenarios. Analyse the impact of different sales patterns, cash flow fluctuations, and inventory levels on your finances. This exercise helps you identify potential vulnerabilities and adjust your strategies accordingly. By being prepared for various challenges, you can make agile decisions to protect your financial interests.
For example – as a gym owner with a team of 5, what would you do if 3 members of staff feel ill at the same time? Do you have the budget to hire some temporary freelancers?
4. Nurture Key Relationships
In the world of business, relationships are your treasure trove. Maintain strong ties with your bank and suppliers. A robust credit score opens doors to financial opportunities, while positive supplier relationships lead to flexible payment terms and discounts. With these supportive allies, you can ensure a steady cash flow and focus on growing your sports and fitness business.
Following on from the gym business example in the last point, let’s say your expenses were higher one month due to spending more money on temporary freelancers. Then, if you have a good relationship with your supplier who provides the nutrition products for your shake bar, they may be more than happy to extend your payment terms from 30 days to 60 days giving you time to get back on top of your cashflow.
5. Stay Informed and Get Expert Help
Stay in the know about financial rules and regulations in your industry. This can help guide you through the maze of rules and help you make savvy financial decisions. Examples of this are HMRC’s website or right here at Profitable Fitness.
And when things get a bit tricky, don't hesitate to bring in the experts. A friendly accountant or bookkeeper can provide expert guidance, ensuring your business remains compliant and financially sound – reducing stress for you, so you can focus on running your business and interacting with clients.
Conclusion: Empowering Your Financial Future
By implementing these financial strategies, sports and fitness business owners can fortify their enterprises against uncertainties and promote long-term success. With a clear game plan, a comfy money cushion, tested strategies, strong connections, and a bit of expert advice, you're all set to triumph over financial challenges. Here's to a prosperous and financially fit journey for your sports and fitness business! Stay friendly, stay smart, and watch your business soar!