Ryan Vaughn explains rhythm days, bi-monthly sessions where microgym owners allocate money from income into designated accounts. Schedule them 15 days apart, typically the 10th and 25th of each month, to stay on top of cash flow and spot unnecessary expenses before they drain your operating funds.
In this tip today, I wanted to go over rhythm days. And as a white man that has no rhythm, it makes a lot of sense for you to listen to what I have to say about this. Look, rhythm days is this Profit First principle. I talk about it in my book Profit First for Microgyms in a lot more detail than what I'm sharing here, but I wanted to give you an overview. This is a what I would call the bread and butter of the Profit First system. This is really where all of the theory and just things that you're doing in the system actually happen. You could consider it the workout of Profit First. It's when you're doing the actual work. We recommend sitting down twice a month And in those days is when you allocate your money from your income account to the variety of other small plates, the other bank accounts that we're suggesting that you have with the Profit First system, because it's a way for you to spend your money first on paper. It's a way to get cash that's important and has a purpose out of the operating expense account so that The gym owner doesn't realize that the money's even there, so they don't really have the temptation because they don't really see it. So that's what a rhythm day is. We also call them allocation days. We sometimes in the book call it the 10/25 rhythm because the 10th and the 25th of the month are 2 common days that we recommend. That you use to sit down to allocate because those are 15 days apart, basically. The importance of rhythm days is so that you are taking, for most people, an undesirable activity that's related to accounting, and you're taking it in a lot smaller chunks. Because what often can happen is the gym owner is capable of doing their accounting, they just don't take the time because anything else becomes the priority because they just don't want to do it. Those gym owners tend to then have to take weekends or weeks at the end of the year to compile all their data because they are going to at least need that information for their tax work. By having allocation days every other week, basically on the 10th and the 25th, Or the 5th and the 20th if you want to match them with your payroll cycle, as long as they're about 15 days apart. The benefit of having those is that now we can start utilizing our accounting for more than just being a compliance component of filing tax returns. You can actually see trends that are happening within your gym. You'll see maybe there's a bigger influx of cash at the beginning of the month and a bigger outflux of cash at the end of the month, and so you can start planning accordingly. It also lets you stay on top of expenses right now. Can you imagine if you had an expense you didn't really need and you weren't utilizing it, but you waited all year to look at your accounting, and then you go and you look, holy crap, I have 12 transactions from this vendor and I never used their service once. By having a rhythm day, you can see that Within 2 weeks of it happening, and then you can make a more timely decision, which ultimately leads to a healthier Jim, which then leads to your ability to serve your noble purpose, help people find health, and you basically save humanity one human at a time. So if you liked this tip, please share with a friend and subscribe to our YouTube channel. We are super happy that you're listening to us, and we hope that we can continue providing value for you in the future.
