Nick Berry's blog

It's Almost Here!!!!!

2007-01-17T09:14:00.000-05:00

The Countdown has started, and it's a day away. And forgive me for seeming to be extremely excited. But I think anyone would be if they knew they were a part of a project that is going to affect so many people. The Ultimate Fitness Professional's Business Success System - the name says it all, huh?

http://www.fitnessbusinessrevolution2007.blogspot.com/

I'm hope that most people have heard by now about the product we have just finished that we put together with Alwyn Cosgrove - maybe you have heard of him - where we explained in detail every aspect, every system, every 'secret' that we have used to build our businesses.

Here's what you need to do if you haven't already - go to http://www.fitnessconsultinggroup.com/business-roadblocks.html. That will put you on the 'early-bird' mailing list. That list will get access to the product release prior to the normal release time. We are offering a teleconference for the first 100 buyers, so the benefit to getting in early is obvious. FYI, Fitness Consulting Group currently charges more per hour for phone coaching than we are going to charge for the Ultimate Fitness Professional's Business Success System. So it only makes sense to get in early and get the product and the call.

We are excited. The product turned out better than expected. The interest has been overwhelming.

This is the product our industry has been waiting for.

Oh, the early bird list is closing sometime today I think. I recommend getting your name on it.

Nick Berry

Let's Hit the Ground Running

2007-01-03T22:19:00.000-05:00

I’ve been pretty absent online for the last few weeks, between the holidays and our offline businesses. I hope everyone had a great holiday and are as fired up about 2007 as I am. There are soooo many things about to hit our industry, so many things that can change nearly every aspect of your business for the better. There are already some valuable resources out there, but 2007 is going to bring automated billing, autoship supplements, automated marketing, referral systems………….the list keeps growing.

If you’ve been to www.fitnessconsultinggroup.com, or read the Fitness Riches newsletter, you’ve read our tag line, “Dedicated to growing your business”. Never has that been more true. 2007 is going to be the best year to be a Fitness Professional in history. There are more opportunities to grow, expand, improve, and make more money off of your business. The avenues to a more profitable, less dependent business, and a richer, more flexible future are being provided. Now are you going to implement them? The blueprints to your ideal business are there (I thought that appropriate since one of our own is now a ‘Blueprint’ coverboy.) Are you going to read them?

The hard work has been done. The systems are almost ready. Now it’s up to Fitness Professionals to make a decision: do you want to keep grinding, long hours, constantly searching for prospects, trying to get more clients to make more money? Or does the thought of putting all of that hard work into several implemented systems that are proven to bring in more clients, with less work, and then maximize their lifetime value – and do it less expensively – appeal to you a little more?

You know, don’t answer that.

You don’t have to. The answer is obvious through your actions.

And I can’t tell you how excited we are about working with those of you who choose the latter.

Nick

Bring On The New Year

2006-12-14T21:26:00.000-05:00

I’m going to offer a few year end tips – some we learned from some past mistakes, of course – to help you save some money. First off, discuss all of this information with your accountant. They are far more qualified to give advice than I, but here are a few things you might want to inquire about:

Any Accounting Updates: Any changes in bookkeeping can be made simpler and more efficient if done at the close of the fiscal year, which is more than likely December 31. It's important as part of your year-end tax strategy to have a good understanding of your company's financial situation. Spend extra time ensuring your books are up-to-date and accurate.

Defer Income: Any revenues you can receive during the first week of January as opposed to December cuts your tax bill for this year. All revenue earned up to December 31st has taxes paid in April of 2007; whereas income deferred to January will not owe taxes until April of 2008. Talk with your accountant and make sure your cash flow can handle the deferment.

Of course, any deferral should will depend on your profit and losses for the year and your legal structure.

Increase Expenses: I’m not a big fan of this method for Fitness Professionals, but after consulting with your accountant, you may want to purchase items your business will require in the immediate future to maximize deductions for this year. If you can see a need for goods and services in the first quarter of the new year, buy them now, if cash flow permits. Consider paying bills early also, so long as the payment shows on your books before the new year.

Beyond Taxes

If you haven't already done so, now is an excellent time to review your company's year-end results and plan for the coming year. If you've already created your annual plan, you may want to look at it in a new light.

A typical approach to business revenue planning suggests multiplying last year's quantitative results by an acceptable growth factor. Industry standards vary, but you don’t have to go by industry standards, you can set your own standards. You should set goals relative to past performance. You may want to increase revenues by 10, 20, 40%. Like all goals, they should be realistic, but challenging.
A well rounded strategy which will provide a platform for continuous growth should impact these critical factors:

revenue and profit
product and service development
customer service
productivity
strategic partnerships
new client growth
client retention
employee retention

What can you learn from last year?
What did you do right - what worked - what should you do more of? What did you do wrong - what didn't work - what should be stopped immediately? What is missing? What should we eliminate? What results are you committed to produce? These should be quantifiably results that I mentioned earlier. 25% increase in retention. 20% increase in monthly revenues. Zero employee turnover. This list could go on forever.

How are you going to achieve these goals?
Who is accountable for each result? What steps are going to be taken? What strategies and tactics have the best chance to produce the results? The approach to some targets will be simple, others more complex. While there are no guarantees of success, each target should have an identifiable path with a good probability of getting your business to where you want it to be. That path will also include benchmarks to measure the ongoing success. What structural and procedural changes will you make? Does this initiative have any staffing implications? Do you need to create new job descriptions or add managers?

What happens to your business if you don’t?
Can you live without addressing all of these factors? Of course you can - but will you prosper, and for how long? Increase sales, but neglect quality - what will happen to customer satisfaction? Improve product quality but neglect employee retention? What will happen to quality next year? And then what will happen to sales? Focus on profits but not new customers or strategic relationships - next year's sales (and profits) decline, and so on. Each aspect's improvement contributes to your company's prosperity.

Can you do everything at once?
You may not be able to do it all at once, but the solution can not neglect any of your critical factors. Create a breakthrough in planning which commits your company to some level of advancement for each of the factors. One that ensures they all receive some level of attention so that each is moving forward, although maybe not all to the same degree.

And finally, a quote:

“Cleanup and planning tasks don’t just happen in December and January. If you review these tasks quarterly, they won’t sneak up on you at the end of the year.”

That was in the email Kelly, my fiancé, sent me when I told her I wanted to put some year end and goal setting information in the blog.

Ironic, huh.

Nick Berry

Who Moved My Cheese??

2006-12-06T07:59:00.000-05:00

We’ve all heard there are two kinds of people in the world; those who wonder what happened, and those who make things happen. Typically we assign that first group as unsuccessful, and the second as successful. And although success is not guaranteed by ‘making things happen’, there is a correlation between those who take action and those who are successful.

Everyone in our industry has heard the ‘take action’ credo. And hopefully most have been inspired by the success stories and have made the move towards their dream. I’m not going to repeat what you’ve heard over and over – you know by know you need to take action in order to achieve. I’m posting this because this weekend I went back and re-read ‘Who Moved My Cheese Pizza?’ by Pat Rigsby – no, wait, I mean “Who Moved My Cheese?” by Spencer Johnson. (That first one is still in the works.)

If you’ve read “Who Moved My Cheese?” you know it’s got a bit of a silly storyline, but an excellent underlying message. If you haven’t read it, you need to. Excellent illustrations of Action vs. Reaction, and how people (or mice?) deal with change, in work, life, etc.

With the amount of time we spend working on our business, building systems, automating, trying to relieve ourselves of the constant battle for our time and freedom within our businesses and our lives, and for all of the time spent trying to provide predictable results and eliminate waste, we will never be able to completely eliminate one thing – human error. There will always be human contact and free will, at least to some degree, as long as we are providing a service.

To deliver my point: As I was going back through this book and the notes I had made the last couple of times I had read something hit me that I feel almost naïve for not having thought of earlier. The ability to adapt, change, and respond is built inside of most of us – that’s why we are entrepreneurs. We are resilient, relentless, we persevere, and we will continue to grind and move forward until we reach our goals. But that’s not everyone’s nature, by a long shot. So while we are busy trying to replace that human error in our business, let’s not neglect that there are those around us who need that side of them nurtured. And I’m talking primarily about employees or others who work in your business. They need that spirit to grow, and with that your business will grow. Your success may ultimately hinge more on a subordinate’s resourcefulness or refusal to let adversity get the best of them – so shouldn’t you be helping them build that side of their character??

You need everyone within your business to be a problem solver. You need answers, not questions. When the roof is caving in – do you want to look over and see your right hand man in the corner in the fetal position sucking his thumb?? Of course not. And although you can’t turn a whiner into a winner in most cases, you can foster that little piece of ‘I will get the job done’ that exists in everyone. It will make your business and your life a better place. Promote creative solutions, problem solving, open suggestions, teamwork, and seeing how it all contributes to the big picture.

And if you want to get them a holiday gift, I would start with “Who Moved My Cheese?” Get them primed for the January rush!!

Thanksgiving Lecture

2006-11-21T20:26:00.000-05:00

I just want to mention something very quickly that Pat, Alwyn and I were just talking about and I think is worth bringing up.

Don’t dispute a credit card charge with someone who offers a 100% money back guarantee. Please. That’s ridiculous. I’ve had a couple of people who over the course of time have disputed their charge for an info product of ours, and I’m nothing short of amazed. We offer a 100% money back guarantee, which we honor and never ask any question other than to constructively improve our products. If we have a guarantee, it’s for a reason, and we honor it. What’s more, those individuals who have entered a dispute won’t return emails sent to resolve the issue. The reason we would prefer resolving through a refund is because chargebacks reflect poorly on our business. (And for the individuals who do this, it reflects poorly on your credit as well. Whoever issued your credit card is going to snatch it back out of your little hand if you keep abusing.) Alwyn said he even has someone who received a physical product and disputed, without contacting him, kept the product, and won’t return correspondence. I think that warrants posting a blacklist. Ridiculous.

Rather than diminish my post by only fussing about a couple of less than classy individuals, I want to make a positive point. For every one person like that, we’ve had probably 1000 good experiences with good people, and we appreciate them. We enjoy what we do, and the people we get to work with, and we hope that it shows in what we provide. We also appreciate everyone in the fitness industry who has helped us over the course of time. So rather than me just venting about a couple of bad customers, it is Thanksgiving, and I want to thank all of the rest of you who make our industry so much fun. Keep up the great work. And we can just make a joke out of the jackasses that think they are ‘beating the system’.

Be safe and have a great Thanksgiving.

Nick Berry

The Wal-Mart Articles

2006-11-21T10:22:00.000-05:00

I’m going to change up from my usual topics a little, let’s expand our horizons. I’ve got a couple of links to articles that I think everyone should read. The first one, the Fast Company article, is pretty long, but an interesting article. The second is shorter, but still interesting. They are both a little old, but that doesn’t diminish their meaning.

The articles are written about Wal-Mart and the pressures that they put on suppliers and the economy. This is not any attempt to persuade, influence, or even give my opinion on Wal-Mart and their business practices. As an entrepreneur and a business coach, I feel it is important that we think outside the box – seeing things for what they are, rather than just from a single perspective. I, probably like most, used to look at Wal-Mart from a consumer’s angle…………low prices, everybody wins. Now I try to educate myself on both sides of every coin. For every nickel saved here, there’s a potential nickel lost there. We see those types of examples every day, the proverbial ‘swinging of the pendulum’.

I guess my intrigue with Wal-Mart in particular stems from a growing understanding of our economy, and the potential effects a company the size of Wal-Mart could have.

Again, I’m neither lobbying for or against Wal-Mart. Form your own opinion with whatever information is available. My intention is that we learn to look past the glow of the smiley faces and flashing signs we are bombarded with daily, and start to understand the economics behind it all.

http://www.fastcompany.com/magazine/77/walmart.html

http://www.commondreams.org/scriptfiles/views03/1208-08.htm

Nick Berry

More Resources

2006-11-16T10:52:00.000-05:00

Typically, but not always, Fitness Professionals are compensated by 1099, contract labor. Which means they are NOT employees and are responsible for their own taxes. This will obviously reduce the business expense of withholding taxes, and will change your legal liability, so make sure you have consulted with your legal and tax professionals regarding each. You should also inquire about being ‘at-will’ employees and what that may imply in your state. ‘At-will’ directly relates to your liability for the individual as well as your obligation to them.

You will probably at some point have an employee on payroll, even if it is just a small salary for an assistant. In this instance, you are going to have to withhold taxes and pay in at certain intervals.

As an employer you’re required to withhold chunks from employee paychecks, plus you must pay other employer taxes -- and provide timely and proper reports to the IRS and various other federal and state agencies. It is imperative that you understand exactly what is required.

Employer tax responsibilities are so complex and handling them right is so critical that you want your accountant’s input on how you go about this. My recommendation is that you have their office to help you set up your employer tax system, whether it will be handled in-house by you, coordinated with an outside payroll service provider, or your accountant. Outside sources will handle the ongoing detailed paperwork for you correctly, cheaper and quicker than you could do it yourself. They are also extremely beneficial if there is a change in policy, which happens often, and you don’t have to bother with the headache.

Here are a couple of resources for you to check out (which will reinforce any information I have given as to why you want someone else to do your bookwork).

www.irs.gov

http://www.irs.gov/pub/irs-pdf/p15.pdf - The Employers Tax Guide. This you should probably have on hand for reference.

IRS FAQ – Questions answered regarding reporting tips, mailing W-2s, providing benefits, day care, tuition reimbursement and topics of that nature.

http://www.statelocalgov.net/ – This site is a directory of state, county, and city agency websites.

Also check with your local Small Business Administration. One of their main goals of this Small Business Administration (SBA) program is to help small companies create more jobs. They may offer classes and other help for employers. You can find more info about your local SBA by clicking here.

If you are going to hire employees, you will have to withhold taxes, and you will need an Employee Identification Number (EIN). An EIN is an Employer Identification Number that is the equivalent of your social security number, except for your business. The EIN serves the purpose of identifying a company, and is issued by the IRS.

After you have talked with your tax or legal professional you will have determined which form of business entity you will start with -- sole proprietorship, LLC (Limited Liability Company), or corporation. Based on that you will then know if need an EIN or not. You are required to obtain an EIN if you are:

Business entities that are separate from you as an individual, such as corporations and LLCs.
Any business that will have employees

You are not required, but may want an EIN if you are:

A sole proprietor who wants to separate the business from his or her individual social security number.
A proprietor who wants to establish business credit that is separate from personal. A good idea, especially if your personal credit score is less than great and would hold back the business’ opportunity to make purchases and borrow to expand.

This page will give you more information about the EIN and point you to the application:
IRS.gov Employer ID Numbers (EINs).

I won't write about this again for a while, I promise. Again, I'm trying to provide the info and guidance that I wish someone would have given me early on, rather than having to learn the hard way.

Nick Berry

Quick Accounting Tips

2006-11-14T20:16:00.000-05:00

During just about every coaching call I take at some point bookkeeping or accounting gets brought up. Which, I suppose is good, because if there is a mistake to learn from, I’ve probably made it. In most if not all instances, the client either doesn’t have a bookkeeper/accountant working on their books, or if they do, they aren’t communicating with that person well enough to know exactly what to expect out of them. So, I’ve jotted down some quick notes to ask your CPA when you meet them. You may have decided already on your legal entity or your chart of accounts, but it won’t hurt to ask, so you get his or her perspective.

1. What form of business entity should you establish?

Ask your CPA what form of business he or she thinks you should start with -- sole proprietorship, Limited Liability Company (LLC), Partnership, C Corporation or S Corporation. They will ask you a few questions, then recommend which form seems right for your startup. There are both tax and liability issues involves, so if the form you choose requires legal help, they can probably recommend an attorney.
CPAs and attorneys in the same general location typically know which of their fellow professionals have experience in what types of work for which industries. If they refer another professional to you, their referral is based on working experiences, which are much more helpful than yellow page ads.

2. If and when do you need to start paying estimated taxes?

Being self employed means you have to keep track of (and pay) your own taxes rather than have someone else withholding it from your check. As miserable as that sounds, there is also the benefit of the ‘write-off’ that you will be able to take advantage of.
Depending on your situation, you may or may not have to pay estimated taxes to begin with. The CPA will be able to advise you, and if you’ll need to pay, give you or direct you to the proper forms to use.
Be responsible and have your taxes done properly. It can become a tremendous hassle if you don’t, and could be the one mistake that will run you out of business.

3. Which accounting software do they recommend?

You may or may not plan on doing any data entry or bookkeeping yourself, but you need to understand what to look for if you need accounting software, as well as how you use it and what your options are.
When you meet with your accountant, discuss which accounting software program, if any, you’re considering for your small business and see what they think. You don’t want to go with something that’s going to cause problems down the line. And you certainly don’t want to change programs, converting from one program to another is a hassle you want to avoid if you possibly can.

4. What chart of accounts should you set up in the software?

Every accounting setup has a chart of accounts, it’s the accounting framework which organizes all of a company’s transactions. But it’s not a ‘chart’ – it’s more of a list, and they aren’t bank accounts like we are accustomed to. The best description of the accounts is they are like buckets which can accept numbers that represent amounts of money. Some buckets are grouped together. Maybe that wasn’t a great analogy – that’s why I have an accountant do all of our work.
Many of accountants prefer to provide you with their own list to set up from scratch instead of using the software’s default. Make sure you give them every bit of the information regarding your business so they can design the chart of accounts with that information in mind. They are trying to save you money – do what they say.

5. Can they help you get organized to handle employer taxes?

Having employees requires whole new levels of paperwork and money management. Make sure you inform them of your current and planned employee status, as employee and payroll issues – when handled improperly – will snowball in a hurry.
I will make my next post with some information regarding employee withholding and all of that garbage.
I am quite familiar with how boring and irritating this kind of stuff is. But I would have loved for someone to have given me this information when I started out – so I’m passing it on. It will save you a lot of money. USE IT.

Nick Berry

The Importance of the Autorenewal

2006-11-08T13:52:00.000-05:00

I have been working with a couple of clients who are trying to get their client base set up on autorenewal contractual agreements. This is one of the most important decisions that they have ever made regarding the Lifetime Customer Value. There are a couple of very simple reasons that this is a must: 1) Security. I’ve only addressed this in at least half of my blog posts. Having a projectable receivables base will let you forecast for income and expenses. 2) Longevity. Directly related to Lifetime Customer Value. Obviously, the longer a client remains a client, the more opportunity they have to spend money.

There are essentially two types of agreements in our business – Term and Open Ended. Term agreements are for a specific length of time, and when that term is expired, the agreement is null. In order to remain a client/member, the individual must resign another agreement. Open-ended agreements are agreements that typically have an initial term, but after that term ends you are able to extend the agreement by renewing terms or a month to month basis. In these instances, there is no action required in order to remain a current client/member. I do love simplicity.

Through our experiences with both types of agreements, we have found that in a true ‘service’ business, you are better served by opting for the autorenewal agreements.

**Be forewarned: Certain states do not allow for autorenewal agreements, you can write term agreements only. You can find out what your state allows by checking with the Attorney General’s Office.

First, the autorenewal agreement can be identical to the term agreement during the initial term. When designing your packages, you can decide if you are better served with a 12 month initial term, like we do with Fitsystems, or maybe something shorter, say 4 months. That decision should be based upon the variable specific to your business, ie your niche, sports seasons, specific client goals, etc.

Where the autorenewal agreement benefits you is at the end of the term, and why it does is very simple. Which is easier, for someone to take the time to resign, fill out another agreement, write another check, and go through the entire process again – or is it easier to do nothing except keep scheduling your next session and working out? Simple answer to that one.

Let’s not lie to ourselves here – people want what’s easiest and most convenient. It’s hard enough getting them to make every session and follow the program you have designed for them. Not to mention, when they are up for renewal, they are going to have to be sold again to some degree on the idea of a long term commitment, and spending more money. Then they remember last year when they signed up and their husband wasn’t exactly excited about it. Or now Christmas is around the corner, maybe they should wait until January and get started again (fabulous idea there!!). You do not want to have to go through the process of re-selling them if you don’t have to. If they are on an autorenewing agreement, all you have to do is KEEP PROVIDING GREAT SERVICE.

Best example I can give you:
Here’s a client, a late 30’s gentleman, absolutely made of money, so there’s no issue there. He signs a 12 month agreement with us in December, and it expires after November of the following year. He is die hard faithful. Active and following his program for 10 straight months – getting great results. Then he has an issue with his job, nothing major, just taking a little bit extra of his time – and adds a second child to his family. Now at the end of November, it’s been two months since he’s been in, and it’s going to be like starting over for him. Plus the new baby, and Christmas, and he’s wondering how he ever had time in the first place!

Look at this – the guy loves to work out, he’s fit, money is no issue, he’s been successful with the program before – he’s an ideal candidate for a renewal.

But will he? Maybe, maybe not, but he’s going to have to be sold on the idea if it’s going to happen. So now you or one of your trainers is going to have to put some time into re-motivating him to get back in here. I’m not saying this is bad but which would sound better if you were him,

“Nick, you need to get your butt back in here and pick back up on your program.”

Or,

“Nick, you need to get your butt back in here and pick back up on your program, but we need to re-sign your agreement first (which in their mind means spend money).”??

It’s a potential barrier to RE-entry, that we can avoid by using autorenewing agreements.

I’ll touch on this more in the next month or so, as we are working on something that will simplify and automate most of this process for you.

If you are thinking that might alleviate some of your headaches – you’re right.

Nick Berry

Creating a Culture Within Your Business

2006-11-01T20:12:00.000-05:00

When Pat and I decided we wanted to take our businesses to the next level, one of the most important decisions we made was to define and create a culture within our PT Company. Creating a culture has an indirect and intangible effect on your growth and business worth, but do not underestimate its importance. We identified that we wanted our business to be more profitable and less dependant upon ourselves. Essentially we wanted a dynamic, self-sustaining business that we could count on while we focused on other areas.

Creating a culture does not have a crystal clear definition. It involves your businesses identity, values, beliefs, products, services, and everything else you offer – and it brings out yours, your employee’s, and your customer’s passion and enjoyment of what it is you do. Your business culture will begin (or end) with you, and you’ll find that it will spread infectiously throughout your team if you have selected the right teammates. After that, you’ll find your customers picking up on it and responding to it. The kind of loyalty it can bring about can lead to referrals, repeat business, and positive word of mouth, and we know what that can do.

Looking back at how we effectively created a culture within our business which we are happy with, there were 3 basic benchmarks which we started with.

1. Define and Display Big Picture
2. Have Team Take Ownership
3. Identify and Apply Completion Plans

Define and Display Your Big Picture

You’ve probably heard me use the phrase ‘Big Picture’ repeateadly. Well, rest assured it’s that important. That’s the snapshot of what you want the finished product of your business to look like. When your team sees the vision of and buys into your Big Picture, it takes your business to a whole new level. You’ll begin to see their Big Picture become even bigger and run concurrent with yours in many cases. I’ve written about it time and time again, but I’ll reinforce the importance of setting specific goals for specific timeframes. Weekly, monthly, quarterly and annual goals for the short-term, and your Big Picture goals to which everything else relates.

You should also identify goals for each individual who has a role within your business. Identify and explain them, so each person understands not only what they’re personally responsible for accomplishing, but also how their goals relate and contribute to the overall goals of the business.

The Big Picture and goals should be kept in the forefront, so don’t be scared to post them for everyone to see daily. We all need those reminders on occasion.

Have Team Take Ownership

If you have the right people on your ‘team’, then expect them to embrace this new culture. In order to do so, you will need to establish a sense of ownership within them. Your people should know that there’s a “win” for them, not just for you, the owner, upon achieving individual or team goals. You need them to buy into the TEAM mentality, and not look at the business as a ‘punch-in, punch-out’ type workplace. Find out what makes them flourish and put them in a position to succeed. Give them the opportunity to do what they are good at and enjoy, and you will see more of a fire in their performance.

If your employees feel like pivotal contributors and that they can influence the process of reaching the company goals, you are creating a positive culture. If they do not, your culture will become one of cynicism, laziness and mediocrity.

Identify and Apply Completion Plans

One of the most important steps we took was developing our completion plans – which we included in our Business Action Plan - http://www.fitnessconsultinggroup.com/businessactionplan.html. Completion plans are step by step plans for every possible task every individual can do within our organizations. But we didn’t just write out step by step plans, we identified the steps which we feel will give us the highest probability of achieving our desired result (heard that before?). Having procedural steps in place allows us to identify, then, where an individual or a procedure went wrong if we don’t achieve our desired result. So if our sales are down, we’re not left scratching our head. It also allows easily quantified results if we are attempting to test any new methods or steps in any procedure.

Where this falls into creating a culture is giving your team accountability for every task and action they perform. Their tasks are identified and outlined, so they know exactly what is expected of them. Also, there is significantly less time spent aimlessly wondering, ‘What do I do with this now?’ (It’s simplifies tasks to where some of them are almost mindless – I love it.) So now the guy who hates paperwork but loves to train clients, spends less time fumbling with getting a client folder organized - it's step by step - and has more time to do what he loves. We all win.

Of course there is more to creating a positive, productive, profitable culture than just three steps. This is where you need to start. And no matter what type of culture you feel as if you have now, know that it can be changed starting right now. And it probably won’t be as difficult of a transition as you think, but I will guarantee that it will make as dramatic a difference in your business life.

Nick Berry

My List

2006-10-24T14:01:00.000-04:00

I have seen several articles and posts lately regarding reading lists, and I just happen to have one of my own. Mine is slightly different, however, in that I am more specific than just a list of books, I have a list of favorite Chapters. As soon as I get a new book, I immediately stick an envelope in as a bookmark, and I take notes throughout the book on it. It has become incredibly useful, in that I can go back to my envelope/bookmark at any time and use it as a reference. So I don’t have to skim TOC or indexes if I need to go back over something for a refresher, or need to recommend some reading to someone.
It does irritate my fiancé, Kelly, more than a little, as I keep my books at her house, therefore I use her envelopes, making sure she runs out at the most inconvenient of times. I dare say that isn’t the toughest ‘Nick’ issue she deals with, but you’d have to ask her.

Anyway, on to my list of chapters, and this is in no particular order:

Chapter 3, What’s Your Mission, in “Never Eat Alone” by Keith Ferrazzi. Good book regarding networking and the impact it can have on your success, but probably the best chapter in the book is Chapter 3, on Goal Setting. The book describes in detail how to set effective goals, and how to hold yourself accountable with his three steps. I have used a lot of information out of this chapter. Aside from that chapter, if you didn’t meet enough people at the bootcamp, or are a ‘wallflower’ in general, get this book. Tons of tips on how to meet and make the most of your relationships with people. Chapters 1-14, Dan Kennedy’s No BS Time Management for Entreprenuers. Yes, that’s the entire book, because hands down it’s the most important book I’ve ever read. And incredibly easy to read. It’s over in no time, and you are much better for it. If you ever want to become a true entrepreneur, start here.

Chapter 5, The Hedgehog Concept, in Jim Collins’ “Good to Great”. The Hedgehog Concept is basically an illustration of three circles each partially overlapping one another, with each representing an element of your business; 1) What you are passionate about? 2) What you can be the best at? and 3) What drives your economic engine? It gets a little deeper into the explanation of successes and failures of similar businesses, as does the entire book. An important read for any entrepreneur who wants to see beneath the surface of business success and failure. Later in the book, he also mentions a ‘Stop Doing” list (as opposed to a ‘to-do’ list) as a means of shedding unproductive tasks, and restoring discipline to our working lives.

Chapter 4, Strategy of Preeminence, “Getting Everything You Can Out of All You’ve Got”, Jay Abraham. This is a strategy that we took and immediately impressed upon our staff at our health club and PT company, it’s so simple, and so true. The soul of your business, he calls it. The Strategy of Preeminence is simply described as shifting your focus from ‘me’ to ‘you’. When doing so, you will stand out in the minds of your clients, employees, employer, or anyone else as the best at what you do. The preeminent choice. I always revert back to this particular chapter (and book) whenever I feel we need to refocus on customer service.

Chapters 6 & 7, Identify Blocks, Destroy Blocks, “Power of an Hour” Dave Lakhani. Two chapters that will help you identify and get past any obstacles that may slow your progress towards your goals. The true insight was in realizing that I was incorrectly identifying my blocks, making it difficult to eliminate them. This book, and in particular these chapters, along with Dan Kennedy’s Time Management book, have increased my productive time probably tenfold. It’s amazing how much time you can spend dealing with distractions if you don’t identify and eliminate them. A great resource for productivity.

Chapter 11, How to Manage Your Cash Flow, Dan Kennedy’s “No BS Business Success” Of course he has two books on my list, he’s Dan Kennedy. Reducing and controlling expenses, getting financing leverage, getting paid for your service or product, and increasing cash flow by increasing sales are a few of strategies Dan explains in detail. His books are such easy reading, large type, small words……..just kidding. They are easy to read though.

“The E-Myth Revisited” by Michael Gerber.
Ch. 2 The Entrepreneur, the Manager, and the Technician
Ch. 6 Maturity and the Entrepreneurial Perspective
Ch 9 Working On Your Business Not In It
Ch 11 Your Business Development Program
Ch 14 Your Organizational Strategy
Ch 17 Your Marketing Strategy
Ch 18 Your Systems Strategy
Needless to say, tons of info here. Tons.

Freakonomics, Steven Levitt and Stephen Dubner. This entire book is the polar opposite of conventional, exploring the economic reasoning behind debates such as: How the KKK resembles Real Estate agents, similarities between sumo wrestlers and school teachers (I know what each one of you is thinking, and that’s not what he means – but I thought it too!), and what makes the perfect parent. The one chapter that makes this book required reading is Chapter 3 Why Do Drug Dealers Still Live With Their Moms? And it explores underground drug ‘businesses’ and how their hierarchy and systems are put into place. I promise you will learn something from this! Read it.

These are the books which have influenced my and my businesses the most. And you can see they are pretty inexpensive. This list should be on everyone's shelves, they are what we look at as mandatory reading.

Nick Berry
*note*
This list does not include ebooks and/or info products, otherwise the Dan Kennedy's and Michael Gerber's would be pushed aside by the Lee's, Labadie's, and Cosgrove's out there. Those guys get their own list.

Big Al's Ride

2006-10-19T21:29:00.000-04:00

A good friend of mine had a bit of bad luck last night, as some may have heard. The man got his car stolen, and wrecked. I’m not celebrating it, by any means, but he’s managed to spin his bad fortune into the opportunity for some good fortune for the rest of us. He’s a great guy like that. So I thought I would pass the link forward, http://www.fitnesswebsitedesign.com/new-car-fund. Everyone knows of Allen Hill’s high quality of work, and this product is nothing less.

Get a jumpstart on your website traffic while the getting is good. The discount is taken at checkout, so it’s around half price.

Follow the link and check it out. And then recommend to Allen he get a stunt double to pose for that testimonial at the top of the page! Not exactly eye-candy.

2006-10-17T21:57:00.000-04:00

Ok, I’ve gotten some feedback on my little rant below, Knowledge Assets. Those readers who it was directed at know exactly who they are. I thought I had covered everyone when I stated “before you start with I don’t have money, I’ve got payroll, or rent’s due or whatever it is you are going to let make you continue to put off taking some action……” and “Lots of salesmanship, not so much value. And in a certain few cases that’s true, but someone’s reputation as giving great info or a crappy product will let you know if you should be buying from them or not. They can’t hide that. But there are many more good, valuable products and resources than there are bad, especially within the PTU circle…”

After re-reading I believe I left a few people an ‘out’ so to speak. I completely understand that money can be tight – trust me – and that you need some reassurance as to the quality of products certain individuals may produce. What got lost in my message is that rather than letting skepticism keep you from getting any product at all, get a feel for someone’s smaller products, then get the larger ones. Get your hands on some of their less expensive material and you will know ahead of time if you are going to like their larger products. It’s an ‘economically efficient’ method of building a relationship with the information producers out there. It’s basically a test run.

Here’s my test run for you. If you are an individual who is skeptical about product quality, or for whatever reason don’t think you have the money
http://www.fitnessconsultinggroup.com/businessactionplan.html. I had a part in creating this, and it was done with EVERYONE in mind. Every person who has an interest in the fitness profession will more than get their money’s worth from this product. For those who get in by Sunday at midnight EST, we are having a teleseminar to explain exactly how to use these tools. There will be an overview of each tool followed by a Q and A session. An open Q and A is your chance to insure that you get your money’s worth, if you take advantage of it. If you don’t take advantage, well, it’s guaranteed anyway, as always.

2006-10-16T21:26:00.000-04:00

I thought this was appropriate following my last post. I got this a while back, and I don't remember where or I would send them a thank you.

Knowledge Assets

2006-10-16T18:57:00.000-04:00

I had the privilege of eating dinner with Ryan Lee, Jim Labadie, and a group of 10 or so of us at ‘Bootcamp 06’. Among other topics, we were discussing who had purchased each others products, and how much money each individual had spent on info products and coaching. At our table, the top three SPENDERS, (in no particular order) Ryan, Jim, and Pat Rigsby (<--I guarantee Pat’s #1 – he amazes me). Funny thing, arguably the most successful people at the table were the same group of three, and this table had some names sitting there, I assure you.

Anyway, Jim is telling a story about Pat calling him and asking “Don’t you have anything else you can sell me?” because Pat already had everything Jim had put out. We got a laugh out of it, but Ryan put on his serious face for a second and pointed out, “You know, Pat spends the most, and he’s the most successful – why don’t people see that?”
Great question. Why would Pat continue to spend money on info products if he’s already established himself?

I think I heard Alwyn Cosgrove mention that he was nagging Jim for business coaching, but he’s Alwyn Cosgrove! He can’t need business coaching, right?

Noticing the pattern? There is a direct correlation between the people who are spending money on knowledge and their level of success. This is non-debatable, I will not hear it. And before you start with I don’t have money, I’ve got payroll, or rent’s due or whatever it is you are going to let make you continue to put off taking some action, listen to this one:

This weekend Pat and I had the honor of hosting Mr. Allen Hill Jr. in Elizabethtown, KY, for a 48 hour brainstorming session. I don’t know if everyone knows this about Allen, and I hope he doesn’t mind me telling, but 9 months ago, Allen’s business was struggling. He was working his butt off and treading water, and he was getting fatigued. He decided to buy Pat’s first product, the Personal Trainer Money Machine. Long story short, Allen Hill took those principles and applied them to his training AND his website design business – and look what he’s doing now. He’s slammed. You know what? He continues to get business coaching even now. He is investing in knowledge and he will be rich because of it.

Info products and business coaching don’t just facilitate perpetual success, they can also set you on the path to success even if you are starting from ground zero. Investing in knowledge works, it is proven. If the successful ones are doing it, and you want to be successful, why wouldn’t you do it?

I’m an example myself. I thought info products were very gimmicky. Lots of salesmanship, not so much value. And in a certain few cases that’s true, but someone’s reputation as giving great info or a crappy product will let you know if you should be buying from them or not. They can’t hide that. But there are many more good, valuable products and resources than there are bad, especially within the PTU circle. Anyway, Pat got me into info products, and I later found a business coach – who’s not in our industry – and I can’t say enough about him.

Business coaching should be mandated by any lending institution on startup businesses, and by any investment group. A study of Fortune 1000 companies who participated in Business Coaching programs reported the following benefits from the coaching they received:

- Saw an increase in productivity by 53%
- Increased customer service by 39%
- Increased retention of senior people by 32%
- Reduction in costs by 23%
- Increased bottom line profitability by 22%

The same survey reported that the individuals who received coaching saw improvement in:
- Working relationships with their direct reports
- Working relationships with their manager
- Team-building
- Reduction in conflict
- Business Relationships with clients

I’ll put this as bluntly and forward as I can. If you, for any reason, are not investing in knowledge in one form or another for your business, you are a business ‘dummy’. There is no excuse that you can’t find something that will make you and your business operate better. After the examples and numbers I gave you – can anyone – ANYONE – afford not to?

Get off of your ass and do something. Invest in knowledge. Those who offer the information are giving you everything you need to do what they’re doing. Do not be satisfied being a business dummy, or just as bad, being complacent. Be aggressive. Get what knowledge you can and put it to use.

Last thing. We are in what is described as an Intangible Economy. Here’s the definition according to Wikipedia:
In the Intangible Economy, four factors of production - knowledge assets (what people know and put into use), collaboration assets (who people interact with to create value), engagement assets (the level of energy and commitment of people), and time quality (how quickly value is created) are the four key resources from which economic activity and competitive advantage are primarily derived and delivered today.

I believe we have all four components at our disposal. That would leave us no excuses, right?

Nick Berry

Task, Completion Plan, System, Goal, Big Picture

2006-10-11T17:05:00.000-04:00

Sales and marketing is the most important system in most, if not all of the businesses we consult. It is either their most impressive and valuable tool, or it is the area where they lack the most. Either way can make a tremendous impact, in either a positive or negative light. Certain businesses are very dependent upon relationships for their sales and marketing. An owner with a few good connections or clients who send referrals can build a fairly large clientele. That’s great until they decide they want to cut back on their workload or it is time to sell. At that point, the revenues drop, or prospective buyers will recognize the risk of losing clients. This reduces the value of the business, and I know, you’ve heard me talk about it repeatedly.

So do you have your systems in place?

On the flip side, some businesses build lead generation systems that are not “personality based” or “owner dependent”. They are based on advertising, direct mail, location, or other systematic techniques that have been proven to work.. The lead generation is where it all begins, and is step one in your sales and marketing system.

Step two is giving the leads to trained salespeople who know how to close a reasonable percentage of the prospects. These systems are tracked and fine tuned to improve performance. In our weekly staff meeting this morning I reiterated the reason behind our systems and completion plans – predictable results. Every result we want to achieve is outlined in our Big Picture, and in this case is enrolling new clients in our programs. Our completion plans outline the precise steps in each phase; lead generation, sales appointment, closing, enrollment, program design, renewal, and upsells throughout the process – all have detailed steps and themselves form a system. Software companies, distributors, service businesses and many other businesses use these techniques to improve their business and increase the transferability of the business.

Here’s my question to those who haven’t developed business systems yet:

Wouldn’t you feel more comfortable with a sales system that is independent of the you and your personality and proven over time?

Incredible Weekend

2006-10-02T15:19:00.000-04:00

We are back from the bootcamp, and I feel like my head is on fire. Sooooo many ideas, so many emails and questions………

I love it.

I met so many great people. Smart people with a nose for business. People that we can work with and learn from, and I'll take that at every opportunity.

I enjoyed seeing and hearing the same things that each of you should have seen and heard this weekend. And most importantly, without a doubt, the word of the weekend was……

SYSTEMS.

Go figure.

No less than a few hundreds times, we heard that word. Needless to say, my head was spinning.

Everyone mentioned systems. And that's great, systems are that important. The sooner we recognize that, the better off we are. However, I don't think I heard anyone mention what systems will give you that nothing else in the world will:

Predictable results.

Not 100% predictable, but what in the world is?

Increasingly predictable.

Which is the cornerstone of your business being independent of you, and you opening up your ‘money-making window.’

Honestly, this is not to say I told you so. This is just a reminder of what systems can do for you (or not do).

What Are You Working For?

Admittedly, the title should be "What Are You Working Toward?", not "-For?"

Keep the momentum from this weekend.

Nick Berry

P.S. Thanks Ryan. Your work is truly appreciated.

Business Fundamentals - Goals

2006-09-21T17:59:00.000-04:00

“A goal is a dream with a deadline.”

Most everyone agrees that you should set goals. I’m no different, I think it’s imperative to identify certain levels of achievement, and reward yourself upon reaching them. But there’s more to it than just setting goals. Let’s look at why you should set goals.

An older study done by Success magazine of Yale’s graduating class of 1953 gave us some pretty startling numbers regarding goal setting. Among other questions asked, three were,

Have you set goals?
Have you written them down?
Do you have a plan to accomplish them?

Pretty simple questions to which you shouldn’t have to think very long for an answer.

84% of Yale’s graduating class had no specific goals at all, mostly using the phrase “enjoy themselves”.

13% had goals, but had not put them in writing.

3% had written down goals, and had a plan of action to achieve them.

Twenty years later, the same class was interviewed again. The results stated this:

The 13% with goals not in writing were making on average twice as much money as the 84% ‘enjoying themselves’.

The 3% who had goals and plans in writing were bringing in on average 10 times as much as the other 97% combined.

That in itself is enough reason for me to write down all of my goals, all of my plans, and anything else that may be relevant. 10 TIMES AS MUCH!!!!

Goal setting and having a plan of action cannot be emphasized enough. It works, it’s worked for too many people too many times there is no arguing it.

Have you written your goals and action plans?
Do you have goals and action plans?

Before you even set your goals, do you know where you want to be?

Here’s another story, this one from Alice in Wonderland:

Alice: “Will you please tell me which way to go from here?”
“That depends a good deal on where you want to get to.” replied the Cat.
“I don’t care much where….” said Alice.
“Then it doesn’t matter which way you go.” said the Cat.

What a great illustration. You have to know where you want to go before you can choose your direction. If you know where you want to end up, then the first step is done and you can start to plan. If not, that should be your first priority.

You may have to do some self analyzing to find where you want to be. What are you good at? What are your weaknesses? What could you work at all day? What kind of people do you want to be around? You may also want to talk to those who know you best, and will be honest with you. Sometimes the things you need to hear aren’t what you want to hear, or what you would’ve told yourself. Be open to others input. And you should write all of this down as well.

Decide upon your destination, and now you are ready to devise your plan.

Here are a couple of guidelines for getting those ideas out of your head, and putting them into play:

Goals must be specific, concrete and detailed. You need to know what steps you must take to achieve your goal, by what date it must be accomplished, and how you are to measure achievement. A goal of “best sales month ever” won’t cut it. How much do you expect to sell during that month, and how are you planning on making it more successful than other months?

Believe in your goals. Make them challenging, yet attainable. You do not want to set yourself up for failure, and at the same time, keep the bar high enough that you are going to have to take your performance from ‘ordinary’ to ‘extraordinary’. If you set goals and come up a little short, as long as having a goal helped you get more out of yourself, then it served its purpose.

Remember, it’s the goal setting that’s important, not the goal getting.

You have to believe in your goals, and you have to believe in the effectiveness of goals. Goals must be in writing. An unwritten goal is just a dream, in writing, it’s a commitment. You must have the conviction to put your intentions on paper. I can speak from firsthand experience of the impact this will have on your business and personal life. Learning to identify goals and plans of action has been one of the most important tools for success for me personally. If you are serious about learning and growing your business, it will be for you too.

On another note, our group will be arriving in Connecticut for Ryan's bootcamp early Thursday afternoon. Pat and I have a couple of meetings scheduled but plan to spend most of the evening hanging around the hotel in order to meet everyone. Make sure you stop by and say hello.

Nick Berry

Creating Organizational Structure

2006-09-19T13:05:00.000-04:00

Don’t let the title bore you. This is the fun stuff. Another necessary component of business building – well, successful business building. Anyway, you should love this. I’m going to teach you another step in systemizing your business, and pulling yourself out of it. It’s not nearly as difficult as you make it out to be.

Every successful organization has some semblance of hierarchy. Everyone has a role, and the more clearly defined that role, the more efficient a person can be in that role. The more efficient a person can be in a role, the better off everyone else and the organization as a whole. What I’m describing to you is an Organizational System. And any business that is successful has one. As a small startup venture, you will find it difficult to assign responsibilities and tasks to roles, because you may be the only individual filling many roles. It may even seem like there is no need for a system, if you don’t have anyone else to worry about. That kind of thinking will get you in a lot of trouble if you don’t change it fast.

By defining roles and creating an organizational structure, you are developing the prototype for how you want your business to look in the end. You should make sure every position is outlined, from the President down to the cashier – and each of their responsibilities and whom they are accountable to is defined. Nevermind that YOU are going to fill each of these roles for now – just work to get each position established and defined. And put it all on paper. Documenting everything you do will help you build your systems from the ground up.

So now you have your President, a VP of Marketing and a VP of Operations. Under the VP of Marketing you have your Sales Manager, under your VP of Operations you have your Service Manager. (For simplicity, I will leave off Sales Reps under the Sales Manager, and Techs under Service Manager, and any of the other titles we could have added. If you plan to make them a part of your business, then add them in accordingly.) You have your structure, and you personally are fulfilling the role of each one. For now.

Now you need to identify the responsibilities of each position. Again, documenting everything. You may even draw up a Position Agreement for each, summarizing the expected results, the expected workload, standards to be evaluated, and a signature line. Now you have a contract, an agreement, for the individual you deem worthy of this position, so they understand and are reminded of their role. Until you make the decision to bring someone into this position, then it is YOUR agreement to uphold.

At the point and time you decide your business is doing well enough you can afford and/or need someone to help you out, you have the Organizational Structure in place to do so. You need to decide who you are going to hire and for what role. Interviewing and hiring is another discussion, so let’s focus on that role. In most, if not all cases, you are going to hire someone for one of the lower positions, for a couple of reasons. 1) You aren’t ready to relinquish control of an entire division of your operation, and 2) you need to get someone started on the ground level, so you can evaluate and groom them for any promotion. It is also much simpler to bring in a new Sales Manager and refine or make any adjustments necessary than it is to bring in a new VP of Marketing who will also be your Sales Manager.

Now you’ve added your Sales Manager, freeing yourself from that role and giving you more opportunity to work on your business.

From here it is a takedown schedule. Next you look to find a Service Manager. Then a VP of Operations, which may be a promotion for your Service Manager. Then you move on to your next need. One by one you are bringing in people to a setting that is conducive to success. If you have done your job, defining the positions and training the employees, then you have a system in place. You have increased the predictability of the results. If your infrastructure is well-oiled, then you just need to focus on getting the right people in your organization.

Now, take that very generic model that we just developed, and imagine if you had never defined those roles. If you just did all of the work, and one day decided to hire someone to do the things you either a) don’t want to do, b) aren’t good at, or c) spend too much time on. What kind of structure is that? Where do you go from there? What would your prototype look like?

There is the key: the Prototype.

Imagine it. Define it. Realize it.

Decide what you want your business to look like in the end, and start to assemble the pieces.

Only if You Want to Save Time, Money, AND Sleep Better at Night

2006-09-11T14:44:00.001-04:00

Running a business is a matter of survival for most, if not all of us. Entrepreneurship is an ever-evolving world in which you must make timely decisions on a daily basis that either put you ahead, or behind, the competition. We’ll never be able to make the right decision all of the time. I wish I could say we would. The choices you make regarding your vision, the direction of your business, staffing, expansion, your niche, the list goes on forever. Those choices can’t be made for you, nor should you want them made for you. There are however, several choices that should be no-brainers. The most important is the one that can save you, or cost you, thousands, or tens of thousands, of dollars a year.

I’m referring to your accounting, bookkeeping, and taxwork. This area needs to be in the hands of a professional. That may or may not be you. If it is, fine, if not, outsource it. You need to make sure your bookkeeping and taxwork is done properly. Improper bookkeeping and taxwork can cost you a TON of money, just being incomplete or sloppy. You work hard on your business, you deserve to take advantage of every loophole, deduction, or discount you can find. Wouldn’t you be better off to pay a few hundred bucks a month and insure the job is done properly, than to keep the books yourself and miss out on the countless deductions you could have had? You also set yourself up for some hefty fees and fines if any of your work is not done properly and on time. Let someone who knows what they are doing handle this. It will more than pay for itself.

I understand being a small startup and not having the capital to afford an extra couple hundred dollars a month. Make it a high priority. I’m speaking from experience, this will be one of the best investments you make. My first experience of keeping the bookkeeping in-house was VERY expensive. Look at it like this; you will spend that money one of two ways; 1) on fees, fines, or taxes, plus you will be spending your own time on your books, or 2) on an accountant, who is spending their own time, and they can deal with the govt and the IRS. And I can promise you this, option 1 will always be more expensive than option 2.

I’m sure you can get online and find some accounting software that promises to make things easy. And you probably feel better balancing your accounts each day and writing each check, which you can still do with an accountant. Can you ask your software or your spreadsheet whether you should lease or buy a car, extend a business trip into a vacation, and how much you should put aside for retirement?

No.

In short, specialists are worth their salt because they know how to save you time and money. Your accountant needs to be a part of your management team.

If you need some help deciding if you need an accountant or a simply a bookkeeper, I’ve put some more information regarding accounting up at:

http://www.fitnessconsultinggroup.com/personal-trainer-accounting.html

Unless you are a tax specialist yourself, you are probably going to need some degree of help with your financials. Don’t be afraid to spend the money, it will pay off. Get the books out of your way, and focus your mental energy on those other choices I talked about. They are the choices that can take you from good to bad, bad to good, or Good to Great. I have to mention Jim Collins' Good to Great, I'm currently reading it for the second time, and I forgot how good it was. Incredible book. If you haven't read it you should.

Nick Berry

Quick Management Lesson

2006-09-08T17:56:00.000-04:00

When I first went into business for myself, I had 4 employees working along with me. I was running a pro-shop/smoothie bar inside a superclub. 23 years old, managing people pretty close to my age, enjoying the hell out of working for myself. I never had any turnover to speak of, a couple of college students would work temporarily, and then leave, always on good terms. I wasn’t everyone’s buddy, but if they straggled in a little late, or had something come up, I was a pretty forgiving guy. I talked to them about upsells, cross-sells, education, but there was no formal training. Whenever I needed to hire someone, I basically asked the other employees if anyone they knew needed a job.

After almost 18 months of doing this, I had the opportunity to open a second location. This was my goal from the start, and what I expected to be the time I really turned the corner regarding revenues.

What really happened is I turned the corner and became twice as incompetent as a manager. Everything that I had been doing wrong was magnified.

First off, I was trusting that whomever was working while I was away was a) on time, b) trying to increase sales, c) wasn’t stealing, and d) cared about the business as much as I did.

Wow, was I wrong.

I learned very quickly that absolutely no one cares about your business as much as you do. Bar none. That business is your baby, and if you don’t care for it like one, it will never flourish.

I also learned that you can’t expect what you don’t inspect. If I wasn’t holding them accountable for the tasks I assigned, I was assured that they would eventually stop doing them. Maybe not the first time, maybe not the 5th, but at some point the employee would come to the realization, “Hey, if he isn’t checking to see that I was cleaning those shelves, it must not be a big deal, so I don’t always have to do it.” That one can bite you really quick.

Not all employees are bad, don’t get me wrong. Most of my employees then, and my employees now, I believe, are good employees. Most of what they needed was proper management. The good employees have more to offer if you can reward and motivate them.

Poor employees need to be gone as fast as you can identify them. Don’t hesitate.
Probably one of the most important lessons I’ve learned as an entrepreneur, hire slow, fire fast. This principle, if not followed, can foster cancer and poison within your business. It’s as simple as that. Be very careful about the precedent you set regarding second chances, because as soon as you give an inch, someone is going to take another inch, and another, until it has become a foot.

Building your business will depend on your selection and management of employees, there is no way around that. This is the foundation of Jim Collins’ “Good to Great” which lends incredible insight into getting the right people on board, then putting them in the right place. Improving the quality, capabilities, and motivation of those employees can put your bottom line through the roof, or submarine your entire operation. Train them well, hold them accountable, and reward them. As soon as your employees elevate their level of performance, your business will be elevated.

The Easiest Steps

2006-09-02T09:37:00.000-04:00

I’m going to continue to hammer away at one of my points I’ve made so far, developing systems. It must be important, I’m going to make a Saturday post.

Hopefully after reading some of my posts you have stepped back and made an objective assessment of your business. Hopefully you took some of the insight I gave you to heart, and are looking to improve your business for the better. If that’s the case, then there’s no better time to start planning than now.

You need to plan backwards. Pat explains in more detail “Backwards Planning” in an article recently at http://http://www.fitnessconsultinggroup.com/fitness-riches-13.html . To be brief: Define where you want you and your business to be in 2 years…..then 1 year…..then 6 months………3 months…….one month……one week. Identify each and every step you need to take in order to hit each of your marks along the way. Be clear and specific. Start following your plan.

Well here’s my best advice on one small initial step you can take to make your life much easier, and free you up to work on your gameplan even more:

Automation.

It’s pretty simple. Anything you can have done automatically, do so. It makes complete sense. Automated programs take the workload off of you, eliminate human error, and encourage repeat business. What’s not to love??

You can automate your follow up marketing. You can automate billing. You can autoship supplements. Your business can be as systematic as you want to make it. These systems in particular are already developed, you just have to make the choice to implement them.

This is just a starting point. But only look into these systems if you want to make life easier…..and make more money……and have more free time………with less stress.

So maybe it’s not for you.

Have a great Labor Day Weekend and be safe.

Nick Berry

Build Your Business to Sell: Element #2

2006-08-29T13:20:00.000-04:00

Business Sale: Element #2

One last note about yesterday’s Element #1,

SYSTEMS

Save
You
Stress,
Time,
Energy, &
Money

I had heard that before, and was listening to David Frey this morning and he used that acronym. If you won’t believe it because I say it, maybe you’ll believe David Frey.

Ok. Now we are on to the Second Element of Selling Your Business, which is your receivables base. This one is a little more black and white, so it won’t sound like I’m preaching quite as much.

You’ve read the phrase “selling for a premium” no telling how many times by now. Well that’s how I sell. If you want to cut someone a deal, go right ahead. But I/we work too hard for that. I want top dollar for my biz. And I’m putting our business in a position to justify that. I’ve got my systems in place, so I’ve really opened up our potential buyers market. I’ve shown that they can come in and make money. Now I’ve got to show them that they will have some immediate income and some security when they take over. That’s where our receivables base comes in.

You should probably put this on paper, and it may hurt a little.

If you cannot make one more sale of any type, how much money do you have coming in?

And if it’s not on a legal contract, don’t bother adding it. Cash deals, forget it. The only thing that counts here is what is on a binding contract.

This is where package size and duration come in. I’m going to go back to the studio owners from the other day. They sold packages of up to 20 session, all paid in full, up front. If they stop selling tomorrow, today was the last day they created revenue. On the other hand, I’ll use our company, FitSystems, again, we have 12 month legally binding agreements, automatic withdrawals, and our billing company reports to the credit bureaus and performs collections. If we stop selling personal training tomorrow, I can tell you how much revenue we are due up to 365 days from now. There is always a small delinquency (ours is around 3%), but that’s part of in house financing. We have methods of counteracting delinquency, but that’s for another day.

Back to my comparison. Let’s just say that both businesses gross 300K a year. They do all pre-payed packages, we do all 12 month agreements (we don’t but it makes a simpler comparison). Would you pay more for the business that does 300K with $0 receivable, or 300K with $180K receivable on the books over the next 12 months?

Pretty clear isn’t it?

The hairy part of the whole concept is how to put a price on the receivables. I’ll save that for another day, and try to tackle it from every angle. For now, look at it like this: You can get $.90 on the dollar or $.55 on the dollar for your receivables – either way, the more receivables you have the higher your sales price.

It doesn’t matter if you plan on retiring at 65 or 35 (yup), it is never too early to prepare your business to sell. Without that preparation, you are going to be disappointed with your sales price. And prepping a business to sell usually can’t be done overnight. You have to start now.

I will be putting more information on our website www.fitnessconsultinggroup.com this week.

Nick Berry

Build Your Business to Sell: Element #1

2006-08-26T16:22:00.000-04:00

There are a couple of things wrong with the sale I was referring to yesterday.

I have to look first at what this business will do when she walks out the door. I know right now that I’m not going to replace her myself. I may need someone to fill her role as a laborer, but her ownership role is gone, and her management role will never be completely filled. No one can replace the owner. She’s gone, her clients are going with her, her assessments are gone, her bookkeeping is gone, her management is gone. Take all of that out and what’s left? Her business was completely dependent upon her. Like I said yesterday, what am I going to do, hire her back?

In order to demand a premium sale price, you have to offer a business that will continue to make money when you are gone. It cannot rely on your presence, knowledge, or insight to make money. Otherwise, who is qualified to buy it? And of that tiny group, who still wants it? I’m one of the few people in our region qualified to purchase this particular studio, but I don’t want it because I’m not interested in buying a job. Let me give you a great example. Three months ago I met this internet wizard. He arguably has more talent with internet technology than anyone I’ve ever met in ANY field. Let’s call him the LeBron James of the internet. The guy is making some pretty good money with his website business, really kicking a$$. And I just started asking him one day if he wanted to sell his business to me. We went back and forth about what it might be worth, and I stumped him when I said “LeBron, what’s it worth to ME?” Think about it, LeBron might have been making 6 figures at that time, and I couldn’t have made $100 as an owner of his business. That’s drastic. Since then, LeBron and I have done some coaching, he has started to shore up his business model, and inside of six months, if he does what we’ve outlined, I foresee him being able to sell his business for a fat six figure check.

What’s equally as important, his list of perspective buyers will multiply 10 times over.

You see, the simpler the takeover, the more you qualify potential buyers. Here’s the flip side of the coin. The personal training company Pat and I own (FitSystems), is as automated as a service business can get. If I don’t show up for work, the show goes on. If Pat doesn’t show up, the show goes on. And so on down the line. We do not depend upon any role or individual. Of course, if we disappear the business doesn’t operate at 100% efficiency. That’s just the nature of the beast. If our systems and personnel will continue to operate at 90%+, then I can afford to spread myself out and work on more businesses that I can have at that level. (Let’s see…… 1 FitSystems @ 98% efficiency (w/ Pat and I onsite)……………. or 5 FitSystems @ 90%? (no Pat no Nick onsite))

If Pat and I don’t go to work, our numbers will drop slightly, but we will make money. It’s a perpetual machine. No one person’s absence breaks our back. What that means is that basically anyone who can handle business basics is qualified to buy us out. You DON’T have to be able to sell, you DON’T have to be able to train, you DON’T have to be at work to make sure the business goes on and money is made. Our systems are ironclad. You could buy our business, and with a couple of adaptations, be an offsite owner. And FitSystems would make you money.

I will say that you can never be 100% hands off. Let’s not be foolish. Even in a silent partner/investor type situation. You have to check in on everything regularly. I would prefer to check in on 20 businesses once a month than to micromanage one business everyday.

But that’s just me, right?

This was much longer than I intended, (I wasn’t planning on talking about LeBron Hill Jr.). I’m going to hit on the other integral element of selling your business – your receivables base – in the next post.

Repairs

2006-08-25T18:33:00.000-04:00

I have spent the last hour trying to recover my blog entries from the blogspot beta site, and I've had to move everything from there to blogger.com. Big hassle, but for some reason the beta site decided to take Friday off, maybe it needed a 3-day weekend, I don't know. Anyway, that's why all of my posts say they were put up in the last 5 minutes.

What Are You Working For?

2006-08-25T18:32:00.001-04:00

Pat and I recently had a meeting with a couple of studio owners who are attempting to sell their business that apparently does very well. Three room studio, upwards of a dozen independent contractors who stay very busy and are compensated well. The wife runs the business, she has been training for close to thirty years, and is ready to retire. (Hey, me too.) She has a very affluent clientele, has very clean books, plenty of contacts, and even has some systems in place. So far so good.

We go to the books, and everything looks as expected. The business shows a very small profit over the last couple of years. Of course it doesn’t show a large profit, that would mean large taxes. I’m not going to disclose any of the numbers, including the asking price, because it’s irrelevant. Read on and you’ll understand.

Then we started to dig in deeper. And I want you to analyze the next paragraph and see just how similar you are to them.

She does every assessment for each new client, then trains many of them for a short period, then gives them to another trainer.

She trains over 20% of the clients herself. All of the big name big money clients are in her stable.

Every client pays in full up front and the largest package is 20 sessions.

80% of the sessions are hour long, the rest are ½ hour.

All sessions are one-on-one.

That’s all great for her and them. The biz paid for her Lexus, cell phone, clothes, and she was STILL taking home 2K a month, without any expenses. And it was all legit, no cooking of the books, so to speak. They could show us making a pretty lucrative profit each month after taking out her salary and ‘benefits’. But here’s the deal breaker that they didn’t see, and I don’t think fitness professionals are recognizing:

Her business was feeble without her providing service. She had molded an infrastructure that was completely dependant on her presence. What was that going to be worth to me? Did they want us to hire her after we bought her out? Think about this with me.

A) No client enters a program without her assessment and program design. That’s fixable, but it’s certainly not ideal for a purchase.
B) None of the trainers have ever done an assessment or any of the sales. Again, fixable, but they are killing their sales price if I have to implement all new systems.
C) She is training 20% of the clients herself, with the high end clientele primarily with her. Let’s be honest here – who’s going to stay and who’s going to go? I’m counting on 40% of the clients and 50% of the gross revenues following her out the door. You may keep more than that, but you are foolish to depend on it.
D) Clients pay up front, in full, for <20 package sessions. No receivables base, but plenty of sessions to service. Ideal for them to run a giant renewal promo the day before closing on the deal, cleaning everyone out and leaving me with a bunch of clients with a BUNCH of sessions to service. (Quite illegal, but it happens, I promise). It could be worse, they could have all paid her for 100 sessions that I would have to service. *There are ways to secure yourself in this scenario. DO NOT put yourself in this situation.*
E) 80% of the sessions are hour long. That’s cool if that is your thing, but I don’t think it’s necessary, and it’s tying up my trainers schedules. Half hour sessions mean more clients in less time, my trainers make more, the business makes more, and we get the same results.
F) One-on-one training. That’s fine too, but on a limited basis. I want groups and team training because we get more out of our time and our programs still get the same results. (Thanks Alywn Cosgrove.)

The lesson here is this:
You have got to PREPARE a business to sell. Because of their bookkeeping, not showing a profit worth speaking of, and the business’ dependence on her workload – what do they have to justify any kind of price? I don’t know about everyone else, but I want to sell my businesses at a premium. They were doing well for themselves, and that’s great, but THAT particular business will NOT MAKE ME MONEY without me taking her place. And that’s not an option.

Here are the two principles I want anyone who is reading to think about, and I’m going to elaborate tomorrow.

1) You have to be able to sell your systems.
2) You have got to have a receivables base.

Those are the only aspects in a service business that will allow you to command a premium selling price.

Saturday I will make another post and explain in further detail what I’m talking about.

What are you doing to prepare your business to sell?
What is it worth without you?
What is it doing to prepare you to retire?
What is your exit strategy?

And I’m going to explain why one (1) of my personal training locations, which grosses less and probably nets less each month than the business above, and has only been around for 2 years, will sell for 4-5 times more.

Amusing Sidestory:

This gentleman is sitting across from us, and we’ve basically given him our resume as to what type of businesses we own and for how long. Bear in mind that this guy owns “a couple of businesses that do 20-30 times what this studio does.” Here’s the dialogue:

“So how often are you at your health club?”

Nick: “We spend a day each month in the club.”

“So does anyone run the club?”

Pat: “We have a staff there.”

“OK. So you guys run a 2 man personal training company”

Pat: “No, we don’t train any clients.”

“Who does the training and sales?”

Pat: “We have a staff.”

“So do you have jobs?”

Unison: “We work on our businesses.”

What I would do to have had a camera. His face was the definition of disbelief – almost like he had just learned (in his late 50’s) the secret of life. Maybe he had. And he said,

“You guys figured it out.”

Damn right.

The Power of Retail II

2006-08-25T18:32:00.000-04:00

Ok. I feel like I let you down with the Retail blog. I went back and read it and just feel like I didn’t convey what issues were most important. I’m going to go back and retouch a couple of ideas I feel I shorted you.

1) Understand LV and what goes into it.
A) How long does your average client stay with you? 36 months
B) How much do they pay for your service over that time? 36 x 200 = $7200
C) What else do they buy? 12 - $1 H2O’s/month * 36 months = $432
1 – 5 lb MRP/month @ $40 * 36 = $1440
$9072

Very basic example, but I’m sure you understand. By adding 1 water 3x/week, and 1 jug of meal replacement/month, you increased your clients LV by 26% (and helped them with their program). If you don’t appreciate that, imagine increasing your margins 26% on everything you do. Yeah, incredibly rich.

2) I don’t think I relayed the potential options you have to offer retail.
A) EVERYONE can at least offer autoship supplements to their clients. EVERYONE. There is no excuse to not offer supplements. Clients are going to buy them somewhere, why not from you? Is GNC going to cut you a profit sharing check?
B) It is a good idea to have some products on hand, because some people just need to see, touch, smell, and they just don’t want to order online. We don’t want to lose them just because we don’t want to keep any inventory on hand. My concern with inventory is turnover. Don’t let money just sit on your shelves. Be proactive and get it moved. Promotions, specials, sales, etc., just keep it moving, but don’t compromise your Net over it. If you have to ‘slash’ prices to move something, maybe you shouldn’t reorder it.
C) A blend of onsite retail and autoship can be extremely profitable. You may have to experiment with your products and how you market and tie them into your services, (or you could just ask, and we’ll save you the trouble), but that mix has proven work under most any circumstances.

I’ll be getting back on retail very soon. I wasn’t planning on making this 2 entries, but I wasn’t overly happy with my first one.

Nick Berry

The Power of Retail

2006-08-25T18:29:00.000-04:00

One of the concepts that I will be discussing on a regular basis is retail and how important it is to your bottom line. You’ll find it all over our website, www.fitnessconsultinggroup.com, and Pat Rigsby goes in detail on www.personal-training-money-machine.com, but the key to profitable business lifespan is the lifetime value of the client. And you cannot ever achieve that peak lifetime value without a backend retail strategy. And it is definitely strategy. You will never see the maximum LV by accident, I assure you.

First things first, understand that offering retail does not mean having shelves stocked with a ton of inventory that sit idly by while you sell training. You MAY have inventory and a retail sales area, but it’s not absolutely necessary in order to offer retail goods. Retail as we discuss it is making tangible goods available to clients at a profit to you. So you may sell products from a shelf in your facility, you may have an autoship program, you may do all special orders for clients, or you may keep your inventory at your home and deliver upon order. No matter how you choose, there is money to be made. The amount of money depends on how well you control certain variables.

1) Cost of Goods – Cost of goods sold is important for your accounting purposes, to determine your actual net profit from each sale, and how much to expense on taxes. The actual cost of goods is important to monitor because you need to get the best price on each product you can find. The better your price, the more money you can make. Very simple. And don’t be scared to negotiate discounts.
2) Inventory/Turnover – How much inventory you keep on hand, if any, will directly affect your bottom line. High inventory with a fast turnover = $$$$. Any inventory with slow turnover = losing money. If you keep inventory, age it and make sure it moves. If you don’t want the hassle, autoship. Either way can be equally effective, depending on what type of systems you want to monitor.
3) Margins – Most products, when bought at wholesale, have an MSRP. Manufacturer’s Suggested Retail Price. So the margins are predetermined for you. Supplements tend to stay around the 100% markup range. We price ours slightly higher. Hey, it’s only worth our time if we’re making good money. Some products, like HR monitors, pedometers, it’s closer to 45%. T-shirts, if you get a good price, can go to as high as 400%.

Then of course, the #1 variable is:
How well you market your products within your service.
Your best customers are already using your services, they are prime to buy your retail products, if you can intertwine them with their needs. All you have to do is market your selected retail products to your client base! Then watch the snowball effect and see your bottom line climb month after month.

The Credit Fiasco

2006-08-25T18:28:00.000-04:00

The first thing I want to address is credit, and this is 100% a result of something I just dealt with myself. IF YOU DO NOT GET YOUR CREDIT REPORT YEARLY AND CHECK IT OUT YOU ARE GOING TO RUN INTO PROBLEMS!! It’s nearly a certainty. Creditors are quite simply carefree when reporting to the bureaus. For anyone who doesn’t know, there are three credit bureaus, Equifax, TransUnion, and Experian. Basically any lender will report your payment status and history to one or more of the bureaus. That’s typical, and fair enough. But there isn’t much rhyme or reason to their reporting, sometimes they do, sometimes they don’t. And at some point a mistake may be made in posting payments or balances to your account, dates, addresses, there are a number of things they can screw up. But the kicker is that you don’t find out until you are about to close a refinance at the bank on a couple of 6 figure loans, unless you monitor your own credit. Do I sound upset? I should be, it happened to me just like that, and I should know better. I have studied credit, how to score it, improve, dispute, when to check it, how to use it, everything…….but I got careless, and didn’t get my yearly report. And it almost cost me. What’s +2% yearly on 300K? Yeah. To make a long story short, basically my bank had applied a couple of payments to a different account of mine so I showed up as delinquent for each one on my credit report, which I hadn’t checked until PAT AND I WERE SITTING AT THE BANK READY TO CLOSE AND THEY PULLED MY CREDIT.

Now, we are by no means made of money, so when the bank sees your credit score has dropped recently due to some derogatories, they are going to rethink their lending position. And rightfully so!! They changed their tune by almost 2% APR. I had to go back and contact the creditors who had made the mistake, explain to them how to correct the problem (I know how because we report clients to the bureaus), then go and dispute each one on ALL THREE REPORTS. This all took some time. And I had to wait 30 days for the corrections to show up on my credit reports before I could close my original refinance. An enormous hassle.

I had known for 6 months I would be refinancing these notes. Had I done what I knew I should be doing, I would have been pulling my credit reports and reviewing them. My problems would have been averted before I ever encountered them. If you haven’t checked your credit, go to www.annualcreditreport.com and you can pull one free copy from each bureau per 12 months. It is not very user friendly, but you can probably manage. If you have problems contact me. If you have pulled your credit, but expect a major transaction in the future, it is worth your $15 to check it again 4-6 months ahead of time, trust me. And everywhere you turn you will find someone wanting to monitor or ‘fix’ your credit. Beware. They cannot ‘fix’ or monitor your credit anymore than you can, and often they will do neither one for quite a fee.

Your credit is a serious deal, and it will control the future of your business. If you come from a situation like I do, your credit is the only way you can go from ‘poor’ to being able to borrow some serious money. You must monitor and take care of your credit. Get your credit report, and do it regularly. If you don’t know what you are looking at, drop me a line and I’ll help you out. But don’t screw up your business future by being ignorant.

Let the Blogging Commence

2006-08-25T18:22:00.000-04:00

I’m finally going to break down and start a blog. Pat has been on me for quite a while and I can’t hold him off any longer. (Just kidding). So now I have a blog, welcome to it. I will cover a variety of topics, from finance, to retail, negotiations, sales, a little bit of marketing, startups, and my absolute favorite thing to talk about is developing an exit strategy and selling your business. (I just turned 28, I want to retire, I won’t apologize for that.) If you agree, or disagree, please post your comments. I am eager to hear various perspectives.

If you are smart, and I’d like to think you are, you are also staying on top of Pat Rigsby’s blog @ www.patrigsby.blogspot.com. After reading his work, and then reading some of my own, you will notice we share a lot of opinions in regards to aspects of business. We’ve learned from most of the same teachers, and we both have learned a lot from each other (I like to think he’s learned from me). On occasion, however, we disagree, which can get pretty interesting. My point is this, and Pat will agree: There is more than one way to skin a cat. I’m not sure where that analogy originated, but it means that there is more than one right answer to most of the issues we deal with in our business. No one has all of the right answers to every problem, but we can minimize the mistakes and the learning curve by studying those who have been there done that. That’s why I have this blog – I don’t want anyone to deal with the growing pains that I went through if we can avoid them. If you have questions, post them. If you have ideas, I would love to hear them.
Thanks for reading, I’m looking forward to this.

(First blog entry, and I use an analogy about skinning a cat. You might want to stick around. This could get really interesting.)