In this short instructional video, Ryan Vaughn introduces the "Profit First Flip," a mindset and accounting shift for micro‑gym owners. He starts by highlighting the traditional profit‑and‑loss formula (sales − expenses = profit) and argues that treating profit as an after‑thought makes it feel uncontrollable. By mathematically flipping the equation to sales − profit = expenses, the owner pre‑allocates a predetermined profit amount, turning profit into a controlled, intentional figure and leaving the remaining funds for expenses. Vaughn reinforces the concept with two analogies: the resource‑constrained problem‑solving of Apollo 11 and the habit of squeezing the last bit of toothpaste from a tube, both illustrating how limited resources can spark creativity and disciplined usage. He briefly outlines that the flip requires a process—setting a target profit, allocating it first, then managing expenses wisely—while emphasizing that this shift offers hope and a clearer path to financial health for gym owners. The video ends with a typical call to share, like, and subscribe.
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This tip today, I wanted to go over what we call the Profit First Flip. So in order to understand the flip, I first need to tell you what it is we're flipping. So think about this formula: sales minus expenses equals profit. Now, if you've ever looked at your profit and loss statement or your tax return, you would have seen this formula play out because this is the order of those historic statements. Income's at the top, subtract out expenses, and profit is what's left over. And that's the problem. Profit becomes the afterthought. It's as if to say, boy, after all these expenses we decided to take on are paid out, I sure hope profit's left over. It almost gives us this sense that we can't control it, which isn't true at all. So the Profit First flip takes that same formula, Mathematically, this is going to be the same, but we're just flipping it. Now we're going to go sales minus profit equals expenses. Profit now becomes something that we control. We're going to figure out what's the predetermined amount of profit we want the gym to pay us. Then expenses is what's left over. We don't give ourselves enough credit as humans as to how creative and efficient we can be when we have limited resources. In my book, Profit First for Micro Gyms, I give some examples of Apollo 11 where they weren't able to land on the moon because of a disaster that happened in their shuttle and how they were able to solve that in space with very limited resources, only, only what was available to them. inside of their little shuttle capsule spaceship thing. And then we also give the example of toothpaste. Think about how you use toothpaste. Normally, most people, when they open up a new tube, are pretty generous with the amount of toothpaste they are using. But once you get down to the end, for some reason, most of us want to use every last ounce. I think we need to embrace that behavior of ourselves. We squeeze from the bottom. There are even products on Amazon that I saw. They literally are designed to help you squeeze out every last drop. We all have our methods. The idea is that you are able to expand the utility of that toothpaste by being creative with how you are using it. You also get super conscious about What's the appropriate amount to use instead of being overly generous? The same behavior happens when we use this Profit First flip. We take a predetermined amount of profit. Now we can feel good about the effort we're putting in because we're at least getting something back. And then with the money that's left over, we will be able to use that amount to successfully run our gym. This isn't something that happens like a light switch. There is a little bit of a process to it, but the thing, the thing I want you to take away is there is hope. And consider taking a predetermined amount of profit first, then choose how you're going to spend your expenses wisely. If you enjoyed this tip, please share with a friend, and like always, subscribe to our YouTube channel. Thank you, we really appreciate you. Thank you.
