In just closing out tax season, I felt the need to touch on business finance within my scope. Which isn’t much. But I can speak from personal experience, and general base knowledge.
There are many misconceptions around online health and fitness business management and finances and I simply want to make few things clear. Which will in turn, I hope, make your life easier as a solepreneur.
Please do consult an accountant before setting up or making changes to your financial decisions in your business.
I get some kind of fired up when I see business coaches online gloating about revenue generated without any context. Specifically without differentiating between REVENUE and PROFIT. They are NOT the same my friends. And that is an extremely important truth to grasp if you plan to navigate this world of online business.
Revenue is how much you general in sales of services, goods, or through affiliate marketing.
Period. How much mula came in? Mind you there are processing fees no matter what third party you’re using – likely something like Stripe, if not Stripe. Talk to your accountant about writing off those fees. Because they are an expense. Your revenue is what happened before those fees.
Then we have PROFIT. Profit in my personal opinion is what we give a shit about. More shits than revenue.
A coach might generate $100,000 in revenue but what did they KEEP? What was still in the bank after expenses? That’s your PROFIT.
I highly suggest you read the book Profit First. It provides a different way to set up business finance and I do think it works particularly well for those who have variable income – meaning month to month is not consistent income. That tends to be the case for many health and fitness professionals.
So, when you’re making your revenue goals, don’t forget about profit. That’s my point. When someone says they can get you to $10k months, is that revenue or profit? It’s a fair question to ask in my opinion.
Now let’s talk about ways to increase both revenue and profit.
Revenue: More money coming in – We need more clients, higher price points, or more streams of income.
A massive mistake I see when coaches are trying to increase revenue is that they add one off purchases with no plan to sell or scale that offer. Please please please make sure that if you’re going to create a new offer in your offer suite, that it is 1. Needed in the market. 2. People KNOW it’s needed. 3. And that it’s WANTED. The offer needs to be something that is knowingly desired by the prospective customer.
Do not create an offer for the sake of creating it. We create offers for PROFITABILITY. That profitability comes from people needing, wanting and BUYING said service or offer. Don’t make this mistake.
If you’re depending on the offer to make you money, how much? How often will you need to sell it? If it’s available all the time how are you collecting leads and getting them to convert?
Again, I ask these questions because adding a new offer is actually the hardest way to increase revenue but it’s often the first route entrepreneurs go down.
I’d suggest:
Seeing if you can either increase price of current offers if it makes sense, so you’re increasing the total value of each client and bringing up your bottom line. Add value to the existing offer if needed.
Becoming more proficient and optimizing sales of what you currently sell (rather than creating something new). If there is a legit gap that you can fill with a new offer and your current + new clients would purchase, great. But if you haven’t yet optimized sales system for your current offer, do that first. Squeeze all the revenue you can out of that.
As far as profit goes, that will depend on your expenses.
I want to make very clear that I am not saying you HAVE to prioritize high profit. Some people prefer to put all revenue back into the business (creating high expenses and low profit). Neither is right tor wrong. They’re simply different approaches and the joy in owning your own biz is that you have that autonomy. You get to choose.
When I started my business I NEEDED to make money. Like it was actual scarcity. Not scarcity mindset. I did not have the luxury or disposable income to be able reinvest in my biz, so I have always kept overhead extremely slim. In fact until mid 2021 to 2022, my overhead was under $1,000 per month. I like my profits HIGH. And Lord knows mama pays per taxes because of that.
Do as you wish with your business. But I highly encourage reading Profit First, and staying curious about what you consume and what you desire to learn in regards to ze mula.
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