John Briggs and Chris Thorndike- How to improve cashflow

All right, what's up guys? Welcome, welcome, welcome. I got a special guest, John, in the building. Uh, today we're gonna be kicking it off with how to increase your cash flow. Mr. John Briggs, uh, super pumped that we got to connect, man. I think right from the start we hit it off, and, uh, I love that, uh, there's this like instant connection where we got right down to business, right down to the numbers. So I'm really pumped today. For those of you guys out there, we've got a pretty big agenda. So if you cannot sit in for the entire message, know that we're going to have it on recording, know that we're going to have it on podcast, and we're going to take care of you guys today. So this is the number one, I think, issue in the market, John, is how to increase cash flow. So this message could not be more timely kicking off 2020. So first off, welcome. Excited to have you on.

Thank you.

Uh, so how I like to kick this off, and, and, uh, before we really dive into the issues and the agenda for today, uh, I want to get to know you a little bit more. And then, you know, as you explore, uh, who you can connect with and get your message out for the new upcoming book, uh, I want people to kind of get to know you as a person and feel comfortable with where you're coming from. So I'd love to have you kick it off. You know, how'd you get into the gym industry? Tell us a little bit about, you know, family life, uh, Who is John Briggs?

Oh, well, no one really cares about who is John Briggs. I'm a mess. I, so I have an accounting firm, have an accounting firm for about 12 years now. I got into the gym space. I was introduced to the gym space, I should say, about 8 years ago, and was fortunate enough to meet, to get a client who also serviced gym owners and He was so happy with the work that we did, he asked us if we would be interested in sharing the same strategies with his clients, who all happened to be gym owners. So we've done— we did that route. My belief when it comes to growing my accounting practice is more about sharing knowledge, and someone can then choose to work with us if they want or not. I don't— I don't like a lot of the heavy sales tactics that some people learn and you know, used car salesman classes. And then I came across this book called Pumpkin Plan by Mike Michalowicz. And with it, he talks about how do you duplicate your top clients. And in his work, in his book, like all of his books, he has a bunch of actionable items you can take. And one of those was determining what are your top clients. And I went through the list. I'm like, holy cow, there's a good concentration of top clients here that are gym owners. And so with that kind of pumpkin planning idea, we're like, yeah, let's, let's see if we can serve the gym owner audience. So we went down that route and the more I got into it and the more you niche into an area in a service business, you become a lot more familiar with it and you start to see kind of the auxiliary needs that might have to happen. And that kind of led me to, you know, we've helped a lot of clients on paper, We can analyze some things, we give them some guidance, they go back and they're able to implement some strategies and improve their cash flow. But I don't feel like I truly understood them. And so I had the opportunity to buy into a gym a year and a half ago. And so I took the leap to be a gym owner as well, because I wanted to understand the nitty-gritty side of the business as well, not just the paper side. Because the financials do tell a story, but certainly it does not tell the same Dramatic story that I now know exists.

You hopped into the deep end right there.

Yeah, yeah, yeah, the deep end with flames coming off of the water. Yeah, um, so that's, that's kind of where I've been, uh, with the gym space. I'm married, I got 4 kids, uh, 12, 10, 8, 6. My, my wife's hands are very full and, uh, we do our best Really, our goal in life is to get them out of the house without screwing them up as little as possible.

So that's where we're at.

Yeah.

Um, so cool. Uh, I want to get right into this. I know a lot of people are tuning in, um, and, and want to know some of these, these solutions you have because, uh, uh, one of the reasons, guys, we're here is really to, to improve not only the cash flow and the profit of your business, but the The lifestyle and, you know, the income and what your business is, you know, doing from a cash standpoint plays a major role in that freedom and that ability to enjoy life more. So, uh, I want, you know, you guys out there to know that these are some heavy-hitting questions. And if you guys have anything in addition for John after, uh, you know, the, the call here, uh, put it in the chat. You know, this is why we do this. So, uh, we're gonna hit the This right from the start, and I'm gonna have you guys take a look at. So the first thing we're gonna dig into is, you know, John, you and I were talking about this, how top-line revenue essentially can feel like you're chasing something that really doesn't add up in the end, and whether that adds up to more profit or, you know, you get into something from an excitement standpoint of starting a new supplement program or retail shop. And all of a sudden you start to add up all the time, energy, effort, and money, and it's just not there. Um, so let's open this up. I mean, you've worked with a lot of gyms, you get to look at the budgets and the cash flow. Um, what are you seeing out there when it comes to this particular issue, and what can you do about it?

You know, the, the mindset is very prevalent in the industry that if I had 10 more members I'll be profitable. And, um, it's— I don't know, it's just like we're, we're trying to out-earn our bad spending habits.

Mm-hmm.

But most of the time, if you have— if, if you truly just need the revenue from 10 more members to break even, you probably have 10— for at least 10% sitting in your cash outflow that you could hone in on and improve. And so we like to take the approach that expenses should be managed just as much as the effort to bring in new members is managed. Both are totally critical, and I'm not trying to disagree with some people. They are in positions that they legit need more members. Maybe they overcommitted in their rent space, and now it's a matter of, I gotta have enough revenue to justify And have income per square footage type of thing. But most of the time, especially for established gyms, the profitability can be found in controlling and being more aware of the expenses than it is like, let me do another 6-week challenge. Let me do some sort of marketing spam campaign and get a bunch of members that really at the end of the day is in the long run is going to hurt my gym.

Um, let's open this up too, because, you know, even from an operations standpoint, and, and I see it there where a lot of gym owners don't value their time and put an actual dollar amount to it. But when top-line revenue chasing, yeah, kills profit, but it also kills bandwidth. And when you think of it in terms of you only have so much time in the day, I see a lot of people start what we call half-built bridges. Where, you know, they wanna start retail shop, they wanna go ahead and chase an online program or a nutrition program, and they simply don't have enough hands, enough actual time to do all those things. And what ends up happening is they spend a significant amount of effort and it costs them that time and energy. If they just did focus on growing 10 more members, it'd be a lot less stressful and at the end of the day, probably get there faster.

Yeah.

But like you said, I would agree. I think it really depends on where the owner is at, where their resources are at. But from a trend standpoint, it is very easy to get lost in chasing new opportunity. I always like the quote where it's like more businesses go out of business from over-opportunity than under.

We certainly are not lacking in opportunities in the world right now. I really love your concept, the half-built bridge. I see that. We see that a lot. And that's not just in the gym space. That's just, that's a business owner problem.

Right.

It's just, we're as a group more optimistic than other groups. I mean, that's really one of the reasons that convinced us to take on the risk of ownership anyways. But yeah, like, oh, I'm struggling. Okay, let's add a nutrition service. And an Olympic lifting program and retail all at the same time. Like, you know, let's, let's see, let's throw all these noodles on the wall to see what sticks. Well, unfortunately, when that's the case and this half-built bridge idea, none of them can stick because they do deserve more attention. And while all of those of themselves could actually help the gym, it's just never a good idea to focus on, to have that many multiple things unless you can have a champion inside your gym, like a coach or somebody who can run with something, and you're now there just supporting, so it doesn't take as much of your time. But yeah, we have to understand we have limited bandwidth. It's kind of the same idea of, oh great, I have 50 new leads this month. Well, I don't even have the coaching capacity to have 50 on-ramp classes in a month. So why am I spending money on trying to get in 50 new clients when in reality Max I can handle is 15, so maybe I should control my spending a little bit. Also, by doing that, I can now give a little bit better quality attention to the prospects and might have a better conversion rate. Yeah, I mean, those are just ideas.

So let's keep pushing this because I think this leads us into the next topic really where I wanna close this out in saying you can definitely distract yourself. with chasing money and that money not directly come back to your personal income or your bottom line. And you have to kind of start with the end in mind. And that means really paying attention to how much effort, time, energy do I need to put in to get this revenue to produce? And is it worth it? Am I really interested in it or am I just chasing something else to chase because I really, I don't want to work on some of the weaknesses, uh, or some of the issues that I'm dealing with. So it happens. So this is the next thing I want to dive into, and it leads us up to, you know, uh, we talked about owners are not paying themselves enough, um, let alone some of them aren't paying themselves at all. So, uh, how do we address this concept? I love your solution with, um, business expansion on this when we had You know, briefly spoke about paying yourself for every task or every job role before you know you're ready to grow. Can you open that up a little bit? And I know a lot of people can identify with this. They're either not making enough or not paying themselves right now, and it's a major pain point.

Yeah, so I think if we are honest with ourselves as gym owners, probably most of us have this vision, someday I'll have a gym that operates by itself With limited involvement from me? Well, in order for that to happen, all the stuff you're currently doing as an owner is going to need to be done by somebody else, and they're not going to want to do it for free. So we love this idea of having the owners break out the different tasks that they do and assigning a market rate to those different tasks so that at a minimum, they can see the cash flow that's required to replace themselves and at the same time actually compensate them for a little bit, at least from the effort they're physically putting in. Because there's really no true way to know when can I remove myself as an owner if I'm not taking on that cash responsibility. It just so happens that cash is going to benefit me right now as owners pay. It's one of the reasons we think for sure Coaches need to stop falling— or owners need to stop falling on the sword when it comes to coaching their classes. Look, that's a slot that if you had another coach there, you know you're gonna have to pay them. There's no way around that. Well, you should compensate yourself the same way you were going to compensate a coach. Does that mean maybe there's less money to distribute to yourself at the end? Maybe, especially in the beginning of your process of trying to improve your cash flow. But you can't wait until you have the cash to do that, uh, because then it's just this cycle where you're never actually going to end up getting on top of knowing what the real cash requirement is to replace yourself.

Right, right. So I'll expand on that for those of you guys who want a little bit more of, uh, you know, a firsthand look. So, uh, I'll explain it this way, where, um, in most gyms they have a closing shift, or I want you guys starting to think about A closing shift where let's just say you've got classes 4:30, 5:30, 6:30. And like John's saying, you're gonna pay, say, $20 per coaching class hour, right? So we're up to $60 in terms of the cost, the outflow of doing that. And in order for you to really think about removing yourself, you've gotta think about it in terms of that. You know, I've got $60 I'm technically a coach, I'm worth $60 for that particular shift. And I'll add this, a lot of people don't necessarily understand that it's not 3 hours flat. And what I mean by that is if you want your coaching team coming in, being 15 minutes ready on the floor, building relationship, maybe you have closing duties and that takes 15 minutes, it's actually like 3.5 hours. So you have to be serious when they— when it comes to not just the money but the time to do the job really well. And that's what I take away, John, where if that's $70 per block and we look at it from 5 days a week, you're running that coaching block, those are 5 shifts, or you know that it's gonna cost you $70 every single shift that you add an evening coach. So guys, that's the way he's describing thinking about that, not just from the cost side, but also getting someone to be qualified to do those things and committing to the schedule. You know, so there's a lot of great, you know, information in there. And now it becomes this place where if you guys want to think about growth, like he's saying, everything comes back to, can I trade this $70 shift? And I know that this is a prime time to connect with prospects. a prime time to do enrollment appointments? It's because people are getting off work. So if you trade up, you know, your coach simply removes you from that class, that job duty, in hopes of enrolling someone, uh, into the program. Now you're running service, now you're running sales at the same time. There's opportunity to grow. So I love that point.

Yeah, and I think on top of that too, I was just thinking, depending on where your business is at, I mean, if you're a gym owner in the state where like the gym really does run by itself, I'm great, and you're able to replace yourself, awesome. But if you're replacing yourself in those ways, you're like, you know what, I am, I'm, I'm going to free myself up for these, this 3.5-hour block in the evening. Actually use that 3.5-hour block in the evening to do something productive so that the time you're investing is a better output than the $70 it's costing you. Sometimes we just get so eager and we're so happy that, oh, I've been able to afford to remove myself from another, another session, and then we don't do anything with it. Like, for most gym owners, they need to utilize that freed-up time to continue to work on the business.

That's a great point, and I think a lot of people trapped in that mindset are burned out and Guys, honestly, burnout comes from not having another goal or having a next step. Like, if you're not gonna be burned out in that situation, it means that you have a plan to use that time and to invest in growth. So it may be that you just don't have a strategy, you don't have a plan. And if you just sit or you go sleep or you go home early, I'm not saying that's not quality time with the family, but it's also prime time opportunity cost to enroll where to connect with prospects too. So you give up opportunity there, so you gotta know what you're trading it for. All right, let's keep rolling here. How you feeling, John? We—

Great.

All right, all right, so you brought this one, I love this one. I get this question in the form of a lot of insecurity or just throwing hands up saying, I don't even know what metrics to look at, I don't even know, How to review financials. And there's a lot of people out there even saying, should I just do my QuickBooks and, you know, take care of that? I don't want to spend the money. So let's dive into, you know, how often should they be reviewing financials and talk about some of the solutions around this particular big question mark.

Okay, so I just had a thought. So this is the first time I'm thinking through this. How to explain this? So if it doesn't come across, Chris, help me out. A lot of times with our gym members when they come in, sometimes people like oh I want to do a muscle up. Okay, so that might be a what? Like what do you want to do? I want to do muscle up. Well, how do I do it? Well, in order to know how to do it, you know that that member has to put in the time to do the things that will lead up. To the muscle up. So let's say I don't know how to do the what, like in this case the financials, like you mentioned. Well, I don't know what KPIs. I don't even know what I should be doing. I don't know what I should be doing. That's fine. But you know, you have an idea of how you need to do it, which means you know you actually have to sit down and do it. You know that you're going to struggle probably in the beginning because it's a new habit, and we all suck at new habits the first time we start them. That's why they're not currently existing habits. So when it comes to this, the first thing is you have to set aside the time, even if you have so much anxiety or whatever negative emotion you have towards financials. You know that the time has to be made to do it. So do that first. With the Profit First cash flow management system, we recommend Twice a month. And I'd actually say with most of our clients, some of them are actually doing it every week. And that's the most I would recommend. You don't need to do it more than weekly. But a lot of gym owners are sitting down on their Fridays or their Mondays and they're doing their cash flow allocation. If you don't need that, that's fine. Twice a month is totally sufficient for most. But the idea is, okay, I'm at least now establishing this habit, just like you want your members to establish a habit. Come in on the days that you think you're coming in on. Like for me, 8:00 AM is the session that I go to, and now I don't have to think about it. It feels weird if I don't go, and you wanna get to that point, but you know that there's gonna be no progress that your members can make if they're not actually physically showing up. So that's that idea. Schedule the time first and foremost to at least show up. Then sure, you're gonna clunk through it a little bit, but you're gonna also— look, you guys don't give yourself enough credit, right? Gym owners are really smart. And once you figure it out, it's, it's, you're gonna figure it out a lot quicker than you think you do, uh, than you think you would. So, um, our first thought is you need to be doing it twice a month. No more than every week. But then you can at least establish what you really don't know. Like, well, how far off am I? How clueless am I?

I think, you know, just listening to you, this brings about kind of the lesson that we talk a lot in my Mastery Program on is you gotta inspect what you expect. And before you can even slide into that progression, you gotta understand what to expect. And that becomes the standard. And what you're talking about or describing is, well, what is the standard for, say, a brand new business, someone with little experience? And I love the fact that it correlates a lot to the, you know, the athlete. It's like the newer the athlete, the more feedback they need because they need encouragement, they need results to be seen, otherwise they'll quit. And I feel like it's a very similar analogy where early on, if you're new to the numbers, you got to get a lot more reps in. And that might look like every Monday, looking at the KPIs, looking at the metrics that matter. And then as you grow that along with cash flow, even, you can start expanding how often you look at the numbers. And as long as you have the skill, is what I'm hearing, in understanding how money flows through the company, that's when you get the opportunity to back out time-wise because you've got a pulse on it. Right.

That's right.

You know exactly where your money's going to because you're telling it where to go. A lot of people out there, I think, have no idea, and it feels like it's just, you know, coming in as fast as it's going out. And, uh, that's why I think that's such a great recommendation, is setting up a schedule. Start on the weekly side before, uh, and if you're questioning whether, you know, should I start weekly, bimonthly, monthly, you'll know. Because you'll get the confidence of knowing exactly how that money flows. So start weekly. I think that's a great point. And then really looking at everything from revenue in, all the expenses out. And like we talked about in the last point, making sure you've got an income coming in first before you start hiring and all this. 'Cause I think you see this a lot where a lot of people do have good revenue. $20,000, $30,000, $40,000 a month, and I see that revenue go to operating expenses and then go right to a, a well-paid team, and there's nothing left over for the owner.

Yeah.

So there's a lot of, uh, value in what you just said. And, uh, if you only looked at the numbers on a regular basis, that allows you to have the information necessary to make better decisions at the end of the day.

Yeah, let me just say too, if you want a starting point as an owner, you know, set aside 30 minutes weekly. And if you're like, oh, I don't KPIs on that, I don't get any of that, that's fine. Just start with looking at every transaction that happened in the last week. That's it. Just look at every transaction. And then when you're looking at the expenses, ask yourself, is this helping my gym be productive or not productive? Just start with that simple starting point, and then from there you can build on it. I know there's a book coming out tomorrow that has some more specifics on it. But then, uh, briefly to your other point too, Chris, one of our Profit First Ninjas, her name's Erin Smith, she worked with a gym that had the great revenue you're talking about, but they were bleeding almost $10,000 a month in debt servicing obligations. Well, once they met with Aaron, they got the system in place, within 5 months, they paid off like $60,000 of debt and then therefore freed up this $10,000 a month that they couldn't use. I mean, can you imagine as a gym owner, like what they can do with that? It's just, yeah.

Yeah.

Sometimes it just takes the focus.

I would agree. And likewise, You know, one of my newer clients working with, uh, looking over the budget, being very conscious of it, uh, the way their, uh, employee structure, uh, their team model was situated, they hadn't changed that model in years. And technology's getting better, uh, better ways of running the facilities. There were $7,000 a month over budget in terms of how they're structuring their team. That we could completely have go back to the bottom line, or that income could be easily transferred into owner salary. So yeah, there's a lot of, um, value in what you're saying, and it just starts with taking a look at the transactions and knowing where that money is. Um, great stuff there. So, uh, let's dive in. This is actually probably the number one question I think I see floating around among affiliates, and I think it's because it's rather confusing to begin with in terms of should employees be 1099 versus W-2, part-time, full-time. I feel like this is just floating around and people are just either going with their gut or going with what works. So can you open this up? Like, is there a starting place? Is there a transition point when you grow to a certain size? Let's try and attack this from, uh, kind of a, you know, a starting place here.

Yeah, I think one of the reasons why there's so much confusion out there is because it's the tax code we're talking about. 76,000 pages. This specific issue has 24 factors the IRS looks at, which is one of the reasons why it can be confusing to a gym owner who probably and really shouldn't care anything to delve their life into understanding the tax code. Um, and there's a lot of opinions out there in the space. My big thing when it comes to this topic is the word always does not exist in this conversation. Coaches are not always contractors, or they're not always employees. They're not always 1099 or W-2. Like, it really depends on your specific situation. In general, from a starting point, you first have to kind of just decide how much control do I want to exercise over the coach. If I want like 100%, this is the only way, then there's a like— there's a strong likelihood that that coach is going to have to be W-2 because you are controlling every aspect of it. That's the number one factor the IRS looks at, who truly controls the delivery of that service. I will just say as a quick side note, unfortunately, as of right now, as of the end of 2018, if you're in California, your coaches are currently going to be considered W-2. State of California, sorry. Someday that company who lost that court case that screwed every Californian company is probably gonna appeal it, but until then, you're screwed. Sorry. When it comes to everybody else, it really just depends. We have on our website, we have a 24-checkpoint list, and we lay out each factor in a way to describe if you want your coach to be a contractor, this is what this factor means to you. Like, you need to let them set their schedule. Okay, that's more of a contractor anyway. So there's a bunch of factors there. And I the reason our resources are directed towards helping you see if they're coaches is because the government is never ever ever going to care if your coaches are employees because that's where they get the most money. They want your coaches to be classified as employees as W two. Because they get the additional payroll tax, they get unemployment, all that stuff. So even if your coaches truly are contractors but you pay them as W-2, the government's never going to come in and say, hey, we did an audit and it looks like these guys should be contractors. They're only interested in looking at the people who are paying contractors to see if the relationship is really W-2. Um, in addition to that, again, there's, there's no wrong Or right when it comes to this. You could have 1099 people that have close to full-time hours. You could have W-2 people who are part-time. In general, most of the time, if your coaches are considered part-time, it's a stronger argument that they're 1099 because that means they're making income somewhere else. But if you do have them full-time, 40 hours or 40+ hours a week, again, you're probably leaning more towards the W-2 side.

Right. And, and I have a follow-up question to that where, say the business has a set schedule of classes and they're looking for coaches that need to work those shifts and those classes. Does that draw the line anywhere? Or what you're describing would be, here are the classes that we have available, I'm going to allow this person to choose which shift that they can do it, and then that Could perhaps get them more on the 1099 side.

That's right. That's exactly right. So, uh, for example, um, this last week our GM sent out to all of our coaches, he said, here's the schedule for 2020, feel free to fill in your slots. So we're saying as a gym, these are the hours we would like to offer a class. And then we're saying, coaches, whichever ones you want to do, Please sign up for the ones you're interested in. So they are controlling when they want to work. Now, if it so happens that there's a class, like a noon class, and I want— I as the gym owner want to have a class there, but I don't have a coach that wants to show up for that, then I need to figure out as the gym owner, what am I going to do? Am I going to step in as the owner to teach that class, or am I just going to cancel it altogether? But that way the coach has complete control over their schedule.

I love that approach. And, and honestly, like, from a management side and operations side, which is where we focus on, you know, growing gyms, is like, I want the ownership lifestyle to, uh, really allow for the, the person, the owner, to, to build the business best. So that may look like the owner stepping into that coaching role in that situation and choosing the ideal schedule first and then opening up the remaining shifts to their staff so that you can stay in the zone of most productive or impactful on your company and then build your team around you.

Yeah.

So, uh, anything, uh, on the, say, part-time to full-time, uh, piece of that? Is there a transition point, say, you know, I'm promoting someone and, uh, I start to get into some more admin Uh, tasks, uh, how does that factor in? A lot of times in the coaching industry, 15 to 20 hours is about the max before someone starts getting burned out. Um, how does that play a role if someone, you know, promotes someone into, you know, taking lead follow-up or doing member service and member follow-up? Does that change anything?

Um, it can or it can't. That's the best thing about this. That's good. So like from a part-time standpoint, um, coaches and coaching hours are pretty clear. But now you get into the admin roles. What does that look like? Okay, well, what the government is looking at when they are indicating on the factors is how much— again, if you're controlling them for 40 hours or saying I don't control them but I have them for 40 hours a week, the government is going to come in and say, hey, You actually then are controlling them because they don't— there's not a high likelihood they can go out and earn income somewhere else. So they're going to want that potentially look like W-2. Now, that being said, I know that there are companies out there and their sole job is to do marketing. And their sole job is actually to take on your leads and to do the sales prospecting. And you could probably find some another company who specializes in closing the deal. And if I paid those companies, the government's not going to come in and say, "Hey, those people need to be W-2." Like, oh really? Like Walmart needs to get a W-2 because they're my employee. I mean, that's so stupid. So they don't they don't say that. And so that means I might have a coach or a worker who's a coach who also then handles my sales calls or handles the sales follow-up, and I would just need to pay them. in a similar fashion that I would a different company. And most of the time they're going to charge me a flat fee, maybe for setting the appointment, or a flat fee for closing the deal, or maybe it's a flat monthly fee to do X amount of sessions. It just has to be project-based compensation and not I'm paying you hourly to be here.

Interesting. One follow-up question, because I got a couple emails and messages from people wanting to tap into the tax genius in you. So here's what I want to ask you. So basically, in the, in the case of admin work, where would this still qualify if someone had a specific role, inside that role had all the responsibilities, all the tasks, you know, of what the work entailed, but the schedule was flexible in terms of how basically when they do those things? Where do you draw the line in the understanding of, I know what needs to get done, but when you do it in terms of the day, does that change 1099 versus W-2?

Yeah, as the owner, I'm saying you need to do these tasks at this time. No time.

Do these tasks fit them in here?

Yeah, well, so just as in like if I have a front desk lady or Or boy or girl or man, whatever. And I say, you, like, you're the front desk person from, for this block of classes, that's gonna be W-2.

Got it.

If I, if as the gym owner, I say you have complete flexibility, here are the tasks I want accomplished, do them whenever the heck you want, then it's a stronger likelihood they can stay independent. They also need to be providing their own tools to do that. Meaning if there's a follow-up involved, they probably need to be using their laptop and not a computer in the gym. You, you wouldn't want to require them on some of those things like follow-up. If it's just phone calls or emails or whatever, you wouldn't need to require them to be physically at the gym to do those tasks. You give them the flexibility to do it wherever they want. Obviously, when it comes to sales calls, if you have someone who's getting some sort of commission on sales calls, You are going to want those to happen in your gym because you want the person to be from— the prospect to be familiar with your space. That doesn't prohibit them from being independent contractors. It's just a stronger argument the government can make on that specific factor. That's why you have to look at all 24 factors. No single factor is going to make the case.

That's a good distinction. And Even just the weight you're putting into it where there's some gray that you're working with. And in the event that you are audited, you better have a strong case for why you're doing the things you are and how you're doing them. So that's a good message.

So in that case though, with the sales guy, like, hey, we're strongly recommending that you have the sales meetings in the gym, but he's free to set his schedule and let the prospects know this is when I'm available to come to the gym to meet with you. So now it's— I'm not controlling him as a gym owner, he's controlling his schedule and his work.

Makes sense. I like it. All right, so last thing, let's talk about the book. You know, you talked a little bit about all of these tips and strategies. What got you excited and where's this book come from? You started as an owner, as an opportunity to really dig into it. Um, was it born out of, you know, getting your feet wet and just diving in? Like, where did this idea come from?

Sometimes, I don't know, when you try your best to live right, things kind of just happen, um, the right way. And so there's a couple of factors that were involved with this. So the original book called Profit First, written by Mike Michalowicz, is an amazing book. And, um, We've done our best to pioneer Profit First inside the gym space, uh, starting 5 years ago when I came across Profit First. And what we found as we implemented Profit First with all our gym clients is that every single time we were tweaking the original system because it didn't quite work for gym owners based on the way the gyms are set up and profitability and all that stuff. And so, um, I became a gym owner because I wanted to understand gyms better. And then 6 months later, Mike, um, at a Profit First meeting for Mastery members said, hey guys, just so you know, my publisher is allowing me to open up publishing for Profit First for your specific industries. The second he said that, the dots connected, and I'm like, Oh my gosh, if someone's going to write this for micro gym owners, it has to be me. Like, there's other Profit First professionals who also specialize in fitness, but none of them are actually gym owners. It's like, man, I've just had 6 months going through the wringer, really understanding my clients and their needs so much more fully. Like, it has to— I have to be the one that does this. Even though I'm not an author, I had no idea how to start it or how to do it. But like those stars just aligned. And then so for the last year I've been working on this and yeah, the book is published tomorrow. You can buy it on Amazon. It's on Barnes& Noble as well. It'll start showing up in other places. Amazon is the cheapest price as we can see as of right now. But yeah, so that's kind of where it came from. We just, we saw the need to tweak his amazing system that he wrote for every business owner to tweak it specifically for the gym owner. Because a lot of times you'll read business books and you're like, I wonder how that applies to me. Well, now we don't have to wonder how does Profit First apply to gym owners because the book is specifically written to the gym owner's needs.

Right. So let's end on this then. So, uh, what will that gym owner expect after sitting down and reading it and grabbing their first copy, uh, tomorrow on Amazon? What do they expect as a result? What's your hope that they get out of the book?

My hope, my promise is if you follow the steps in the book, you will be profitable.

That simple. I love it. Yeah. So in closing, first, John, thanks for being on. I think this is one of the most interesting topics when it comes to cash flow, when it comes to profitability. So I definitely think you delivered. for these guys. And like I said earlier, if you guys do have additional questions, John, you are now an honorary member of our unique podcast as well as inside our group. So if you see any tax questions in there, I hope you get to dive in and engage with our community as well. And with that being said, anything else you want to share before we head out for the day?

No, really grateful for the opportunity to be here, Chris. We love gym owners. Like, for me personally, it's interesting when I wrote the book and someone told me, like an actual author, that you can't just write the book to be like a giveaway business card. So she said, your book needs to have a core message. And my core message is that gym owners deserve to be profitable. And so everything that I wrote was with that in mind. Because I know so many fall on the sword, so many are reaching burnout. But the truth is, if you think about what your service does to humanity compared to the many other services that exist, like even financial services or preparing tax returns, you actually save lives. You make people healthier, you extend their life. So I believe gym owners need to stay in business as long as possible. And my only hope is that something in my book will help them do that.

Couldn't have ended on a better note. For those of you guys out there, if you want to catch this on podcast, go to Perpetual Profit and check us out. John, thanks again. And thank you guys later.