The Fitness Business School – Transitioning To A Full-Time Business Owner

Full Transcript

Hey and today’s episode of the podcast, we’re going to talk about how you can transition from a self employed or kind of startup business owner to actually feeling like you’re a true business owner, an entrepreneur. So I’ve got some ideas that I think can help and some things that are going to clarify how you can make this evolution in your own career. So let’s get started.

Welcome to the fitness business school with Pat Rigsby, the podcast for fitness entrepreneurs who want to make more income, have greater impact, and enjoy more freedom in their ideal business. If you’d like an accelerated route to these goals, email me at [email protected] and put BGA in the subject line and I’ll get you all the details about our business growth accelerator program.

One of the more common questions I get from fitness business owners is how somebody can transition from being the kind of jack of all trades where they’re working that early morning shift, they’re catching up on their kind of ownership or managerial role in the middle of the day and then they’re having to work evenings how they can kind of graduate from that and feel like they have some of that flexibility or freedom that they envisioned when they started a business. Well, our industry is probably a little bit different than most in that our normal hours, our peak hours are kind of opposite what most people’s work schedules are, their peak hours. And so it feels a little bit more trying to us. And so I think that our industry probably leads to burnout a little quicker and this topic comes up maybe even more in our industry than most.

So the first thing we have to understand is as a small business owner, your income is typically derived in three ways. Now I’ve never heard anybody else explain it this way, but it seems pretty straight forward and maybe it’ll help you kind of wrap your head around some of the changes you need to make. The first way that you make money is a small fitness business owner is as the actual technician, as the service provider by delivering training sessions or coaching, nutrition or whatever you’re doing to actually deliver a result to the clients that you serve. And when we get started, that’s where most of our income comes from, right? The second way that we make money is playing that kind of managerial sales role where we actually might allocate a commission to each new sale that we generate or each new client that we acquire. The administrative responsibilities that come along with being a business owner, the leadership responsibilities if you’re managing a staff or a team. So there’s that kind of role and we see businesses, they go up, typically small businesses may have a manager if there are more than one more one person working. And then the third way that we make money as a business owner is actually as an owner, that profit that’s left over after paying all the bills after compensating our staff after really just handling all the expenses that come with owning a business. And one of the biggest challenges that we see in a small business is if you, the business owner want to make a meaningful income, it’s tough to only make money as an owner and not make it as a technician or manager because there’s just not that much revenue to go around.

If we look at most small businesses that, you know, that might be in your local shopping center or something like that, you know, maybe they’re making $300 or $400,000 annually, which you know, is a, is a fine amount of money. But, you know, there’s rent that goes out there, there’s equipment that has to be paid for. There is all the overhead with just operating and providing the services that we deliver. So if we divide that up, there’s usually not enough money leftover just in profit to support a small business owner with one location. If you think about it, most of the people that maybe you’ve met that have been your clients, if they own a small kind of retail business or a service business that is in, in the typical shopping center, maybe it’s, um, a Sport Clips, or maybe it’s a Papa Murphy’s pizza or something like that. Those little businesses, if all they’re doing is serving as kind of the owner or maybe the kind of proverbial district manager, they never just have one location, right? They need more locations to make that pool of revenue big enough that that third role is still able to earn a significant living just being paid in that one way.

So the first thing we have to do is decide, okay, how much money do I actually need to make if I’m trying to graduate out of my, my kind of heavy technician role and then look at the profit that our business produces? Is that enough? Because if it’s not, then we’re probably going to have to play more roles than just wearing that one hat. Or we’re going to have to scale our business in some way. Bigger location, multiple locations or some other form of scaling, licensing, franchising, you name it. So what do we have as options? Well, we can scale back our technician role and not train as many hours and find ways to pay ourselves more from those other roles. We can move more into just the kind of managerial sales person role with the ownership role and just pay ourself from those two categories and have other people do just all the technicians stuff. So there are different ways that we can organize our job description based on our strengths, our preferences, um, you know, the, the needs that we have financially.

So once you understand that kind of, I guess way that revenue is divvied up within a business, then we, we need to start figuring out, okay, well which of the things do I want to let go of first? There are a couple of different ways to think about this. The first way to think about what you want to let go is what is the lowest return activity financially on the time that you invest in most small businesses, that’s just going to be the basic administrative stuff, answering the phone, doing data entry, um, and things like maybe cleaning, um, you know, all the, the simple stuff that it doesn’t necessarily take, um, you know, your unique ability to accomplish. Stuff that yes, you can do, but a lot of other people can do. So if we look at delegating that first, those are things that often you can get done depending on the market where you’re in for under $15 an hour. Ideally as a business owner, your time is worth more than that $15 an hour. So the hours that you delegate to somebody else, you have to elevate your role so that you’re making $30, $50, $75, $100 an hour with that same time. And once you’ve elevated your role enough like where you’re making $100 an hour, you don’t have to trade hour for hour anymore. You can work one hour delegate three hours of $15 an hour work and still have made significantly more money.

Now the second thing that we want to look at when it comes to delegation is the stuff that you frankly just don’t enjoy doing. Whether that’s training a 5:00 AM session or things that just you know, aren’t particularly fulfilling to you in the business. And we want to look at delegating those because for you to bring your best every day, for you to develop a team, for you to be a great ambassador for your business, you need to be energized. And so you can’t do things that are energy drains continually without suffering some sort of negative. So when we think about delegation and elevation, we want to start by identifying low return activities or things that just drag you down, things that are not a fit for you. If you eventually want to play your best role in the business and we want to systematically and sequentially hand those off one by one and each time we do it, we’re moving towards our best role in the business. The role that pays us the best for the time that we invest and also fulfills us. So we’re a better person with the hats we do, where we’re a better leader, we’re a better manager, we’re a better sales person or representative in the business and we’re a better coach if we’re still coaching.

So how do we actually delegate and succeed doing it? Well, you need to set up the person that is taking over the roles or responsibilities that you’re handing off. You need to set that person up to succeed. You need to both help them understand their role as it relates to the vision so they understand how this all kind of accomplishes the big picture, right? They need to understand if they’re tasked with cleaning the gym, they need to understand why that’s not just tedious, why that’s not just boring, but why that helps to create a better culture and better experience. Why it is a marketing tool for somebody who’s coming in on a trial and getting their first impression of your business. And then you know, we need to train them to do that, which means having a system, a step by step system that you document, which is usually just the way that you do it, documented likely in video because that’s the way that most people learn. And then you need to coach them to accomplish this.

So the thing that I see people struggle with is they get so burned out by doing the task that they’re like, Hey, I’m just gonna throw some money at this and the problem goes away. I won’t have to deal with it anymore. And so they don’t want to train somebody to do it. They just want it off their plate. But that setting, that person who is assuming this role up the struggle and ultimately probably going to make them a worse employee, it’s probably gonna make them consider wanting to leave and find something else that’s more fulfilling to them. And you’re going to be right back where you were. You’re going to have to take over those responsibilities again. So better to document your system, coach them to perform that system at a high level, and then you can elevate to playing your best role.

So I understand I covered a lot in this episode, but you know, making that move from being the technician and a small business owner to playing more of a managerial role and still earning a significant profit as a business owner, it’s not simple. It can be complicated. It can be trying. And for a lot of us, it’s out of our comfort zone. So hopefully some of the tips that I share in this episode can help you make that move and build your ideal business.

Thanks for listening. I’m giving away a bundle of my bestselling books, the ideal business formula, the fitness entrepreneur handbook in the path. All you have to do is go to patrigsby.com/podgift to get it. Also, make sure to subscribe to The Fitness Business School with Pat Rigsby so you don’t miss an episode and you get yourself on the fast track to creating your ideal business.