Profit First Rhythm Days

Hey guys, uh, I'm back this week. We had an amazing company retreat last week. Uh, if you guys don't do this in your company, I strongly recommend it. It helps all team members understand each other better. So really great. Today though, I want to respond to one of the challenges that the group has mentioned that they're having, which is setting aside time to manage their cash flow, to do their profit first. I first want to say bullcrap on that as a struggle. I think you're not struggling with setting aside time. I think you're struggling with knowing what to do when you have the time set aside. And the reason is, is because you see these principles in the lives of your members. You know that they need to schedule a regular, consistent time in which they're coming to work out at your gym. And those members who don't have a consistent time are likely the ones who are having low length of engagement with your, with your gym. They're the ones you're probably reaching out to often in your efforts to reach out to those members who aren't coming in regularly. This is no different. You know how to set aside time to do something. So that's the first step. You just have to do it. I recommend no more than once a week, but at least twice a month. Pick a Friday or something. So let's just go with that. Every Friday, set aside an hour. And I promise, over time and over a short amount of time, you're not even going to need the full hour. But set aside that hour on Friday. You know how to do that. That's not an excuse. So I don't buy it that that's one of your struggles. But I do get, and I think the deeper issue is, is now that you've set aside this time on Friday, what do you actually do when you sit down? So that's— those are my tips for you right now. I'm just going to walk you through the steps that I take when I allocate my own money. The first thing that I do is I go into my QuickBooks and I pull a report to look at the income that happened Between— in this case, if I'm sitting down on Friday, I'm looking at the income that's been deposited in my, uh, business from the previous Friday until Thursday, because you don't want to do it the day of that you're doing it, just because banks don't settle transactions the same day. So last Friday to yesterday basically is what I'm doing if I'm sitting down on a Friday. And I will now see in my QuickBooks on a cash balance profit and loss statement, I'm going to see the income that I have. I should have some sort of template. If you don't have one of these, reach out to us, do a post in the group. We have a template that you can use with your Profit First percentages. And it's simple as, let's say there's $10,000 deposited last week. I'm going to pop $10,000 into this Google spreadsheet, and it has my percentages for owner's pay and team members and OpEx and profit and my equipment, all those. And it's going to automatically populate how much money I need to transfer into the different accounts. Now that I have that number, I'm actually going to transfer the money into those accounts. So I open up my bank account— sorry, I log into my bank account. Then I transfer money out of my income account into team member, owner's pay, profit, tax, equipment, operating expenses. You're— that's the bulk of what you're going to do on this day. And let's say after everything that I've said and you're like, my books aren't— I can't rely on my books for that information. That's fine. That's why we have the income account. Whatever the dollar amount that is sitting in your income account, go ahead and allocate that amount. So if there's $9,133 sitting in my income account, when I sit down on Friday, I'm going to plug in that number into my Google spreadsheet. It's going to tell me the dollar amounts that needs to go to my different accounts. I sit down, I transfer the money. The next step that I now do Is I'm going to look at all the expenses and cash outflow that happened in my business from the previous Friday until yesterday. So in this case, it's a Thursday in my example. So Friday, previous Friday to Thursday, what was the cash outflow? I'm going to look at those expenses. I'm going to ask myself, was this necessary to stay in business? Was this necessary to improve my business, to improve my product? Productive, not productive? Feel free to refer to my chapter in my book on how to analyze expenses. Those are the questions that you would go through. And then, and then that allows you to stay lean. It allows you to make decisions that are going to allow only the right investments to be spent, and it doesn't— it controls or protects our ability from gaining fat financially with our gym. Because look, as revenue increases, if we don't have something like this in place, our expenses will increase at the same pace, if not faster, than our income does. And so sitting down when I'm allocating money to review the expenses that happened in just the last time period will make it easy so that I can stay on top of that. And that's it. That's what you sit down for. So again, I call BS on saying that you're struggling with setting aside time. I think you are one of the most disciplined group of entrepreneurs in any industry. You know how to be disciplined, and scheduling time to do something is about discipline. You can do that. I'm not worried about that. Now you don't have an excuse anymore, and now you know what to do. When you actually sit down. And I promise it's not actually going to take the full hour, especially if you're doing it every week. The first couple times might be a little rough because you're uncomfortable with it, but I promise you're going to get it down. Of course, if you need any help with this, if you want a Profit First professional to maybe walk you through that first time because you're uncomfortable, just let us know and we'll, we'll see how we can help. Okay guys, remember, profit is a choice. Have the courage and wisdom to choose it.