Chris Cooper's Blog, page 141

How Many Coaches Do I Need?

All the best coaches have coaches.

 

This is the largest point of discrimination between very successful coaches, and great coaches who never really “make it”.

 

I almost didn’t make it either: even after 12 years of coaching fitness, I adamantly refused to pay an expert to help me with my business. I didn’t realize that I was a hypocrite–my ego wouldn’t let me admit it.

 

“Yeah, YOU need a coach to help with your fitness…But I don’t need one to help me with business!” Because business is SOOOOO easy, right?

 

When I finally got a business coach, my business started to grow. My stress started to ebb. I became a better fitness coach, because I was far less distracted by financial problems. I could spend more time with my clients.

 

A decade later, I own the largest mentorship company in the world for gym owners. Despite millions of dollars in revenue and a worldwide team of geniuses, I still have a business coach. She charges $1400 per hour, and I usually end every call in under an hour. But we solve $30,000 problems on every call: it’s the best investment I can make.

 

I also have a fitness coach, despite having over two decades of experience in fitness coaching. My fitness program costs over $300 per month. But I don’t waste any time in the gym; I look forward to my workouts; and my mind is clear to do million-dollar work afterward. It’s the best investment I can make in my health.

 

My CFO is my financial coach. My bookkeeper is my tax coach. My financial planner is my retirement coach.

 

None of these people are volunteers. All of them get paid a lot for the time they spend. And my return on their attention is always worth 10x what I pay for it.

 

On the same day I visited my financial advisor, I got an email with an offer for “20 Free Trades!” from my bank’s online stock trading platform. But the price of making trades isn’t in the transaction fee; it’s in the very real threat of losing money. If you invest $10,000 into the stock market every year, and you lose $20,000 on a bad investment, you’ll have to work two more YEARS to make up for the mistake. Likewise, if I make a bad hire, or fail to remove a bad employee, or get too distracted and don’t act on my best path, I could lose tens of thousands of dollars per month.

 

Consider an investment I made in business mentoring between 2017 and 2018. Dan Martell’s program cost me over $100,000 in fees and travel (that’s USD, friends).

 

Now, the first reaction of most readers is usually: “WOW! What do you really get for that much money? What can he possibly be telling you that’s worth over $40,000 per year?”

 

But that’s because most readers don’t have experience with a business mentor. What if we told the story backward? What if you knew that one of my companies went from $260k to $1.8M in revenues over that time? Would you choose to invest $100k to make a $1.5M difference?

 

Of course you would! And the ONLY investment that can get you this kind of return is coaching.

 

Now let’s turn to fitness. Measuring only one single variable: my functional threshold power was 187W in October of 2018. This is a metric that’s really only important to cyclists, but it’s a measure of how much work you can put out over a fixed time period. I could use my blood test metrics here too.

 

After taking the test in October, I hired a coach to make up my workouts, send them to me, track my progress and keep me accountable. In January, my FTP increased to 250W. That’s a massive increase. I’m not a professional cyclist, but I am now powerful enough to call myself a real student of cycling.

 

For comparison, I spent a glorious summer cycling every day. I rode 1-2.5 hours at least 4x every week. It was hard. My FTP only went up from around 160 to 187. With a coach, I got nearly 5x the improvement in a third of the time. Plus my workouts were FAR shorter, and my kids did them with me, and I wasted no time planning routes or searching for workouts online!

 

When you understand the power of a coach, you start to ask yourself, “Where ELSE can I find these shortcuts?”

 

“Where ELSE can I go 8x faster?”

 

“Where ELSE can I pay a bit of money to shave years of headache and heartbreak off my potential?”

 

How many coaches do I need? Every single one I can find.

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How CAN I Afford it?

Perhaps you haven’t heard the phrases “abundance mindset” or “scarcity mindset”, but sociologists are fascinated by them. In the pursuit of eradicating poverty, researchers want to know, “What keeps people poor?” And mindset is part of the answer.

 

A poor person sees a new car and says, “I can’t afford that.”

A wealthier person sees a new car and asks, “How CAN I afford that?”

The poor person has a scarcity mindset; the wealthy person has an abundant mindset.

 

A mindset of scarcity means you believe in the zero-sum game; that everything comes at the cost of sacrificing something else. A mindset of abundance means that you believe everything is possible without negatively affecting anyone else, or sacrificing what you already have.

 

The scarcity mindset also keeps businesses poor. Instead of thinking about growth, they fight to keep what they have. They accuse others of “stealing clients”. They badmouth former staff who open their own shop. They believe others succeed at their expense.

 

If that’s you, and you’re paralyzed, or afraid to make an investment, here’s what to do about it:

Think about EVERY expense as an investment.

What return on each investment will you earn?

What’s the ROI on your front desk staff?

What’s the ROI on your billing software?

What’s the ROI on your front-line staff?

For example, in the service industry, every client-facing staff person should generate at least 2x their pay. This is called your Labor Efficiency Ratio.

Any new piece of software should deliver savings or opportunities that are more than 10x its cost. No software is hands-off. Automation should increase your profit…not just add another expense.

Marketing costs should clearly show a return that’s far higher than your advertising spend. “Getting your name out there” is a marketer’s code for “We won’t be able to tell you if this works.”
Determine the time to break-even on your new spend. If you have to invest $10,000 to make $100 more per month, find another way. If you’re going to buy a new CRM, ask the salesperson how quickly you should see an ROI (and even which metrics will tell you if it’s working.) If you’re hiring a mentor, ask them how their guidance will make you more money. Trust me: if they’re good, they know.
Spend the money before you spend the money.

Just like the Profit First strategy for paying yourself, create a separate bank account for your idea.

Deposit the cost of your idea into this account every month. Does spending that money create a hardship? Can you hold out long enough to make your ROI?

 

Growth involves risk. When your margin for error is very slim, it’s easy to adopt the scarcity mindset. As a friend once told me, “Nobody cares about money until they need money. Then it’s ALL they care about.” But as entrepreneurs, what we should care about is value. And every purchase we make–a staff person, new software piece, or toilet paper–should show a new return. ROI is the answer to the question, “How CAN I afford this?”

 

 

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Systems: Simpler Is Better (Until It’s Worse)

Occam’s razor is a philosophical principle that means, “If there are two explanations for something, the simpler one is probably correct.”

 

My first staff handbook was 18 pages. I was proud of it. It solved most of the problems in my business; bought me the time to fix the next problems; and improved our clients’ experience at my business.

 

Over time, the staff handbook grew: first to over 40 pages, then to almost 150. We had the entire MindBody Staff Guide in there. My idea was: “Answer every possible question in one document.” And there’s nothing wrong with that idea–until there is.

 

One day, a coach asked how to enter a new client in our billing software.

I said (triumphantly!!!): “It’s all in the staff playbook! Just follow the steps!”

She said, “I looked in there, and couldn’t find it.”

I said, “Did you try the search feature?”

She said, “How do I do that?”

So we spent the next half hour searching through the staff handbook. It would have been faster to just do it for her. And the next time there was a problem, that’s what I did. The staff handbook got shoved away, and we rarely used it. Staff reverted to asking me for help on every little detail–even though 90% of them were in the book!

 

Even worse, as our software usage grew from a spreadsheet to MindBody, then SocialWOD, then MailChimp, and on toward infinity, the book got thicker. That means it got harder to use. And on down the spiral we went…

 

The age-old rule of writing is “write drunk, edit sober.” That means it’s important to get everything out without interruption or roadblock. But then it’s equally important to cut out duplication and extra language. Perhaps it’s MORE important.

 

When I was hired by CrossFit Media to write monthly pieces for the Journal, Lisbeth Darsh gave me a book. It was called “On Writing Well” by William Zinsser. The book had nothing to do with writing and everything to do with editing. “Cut,” said Zinsser, “and then cut some more.”

 

In your business, this means:

Reduce your message to the least words possible to get your point across. When you’re not used to explaining things, you try to cover every base at once. Of course, But don’t bury people: keep all of the steps, but ask “How can I say this with fewer words?”

 

Try to say only one thing at a time.When you’re trying to explain a policy or process to your staff, resist the urge to show them how everything works together. You’ll just bury them. Don’t write an SOP that tries to solve two problems; write two SOPs.

 

Don’t use two systems when one will do.A new system doesn’t double the explanation necessary; it quadruples it. For example, if you use Google Drive for your client folders and DropBox for your staff media, you’ll actually need 4x the time and effort to train your staff. If you host your videos on Wistia, and then copy them to YouTube and IGTV, staff will have to be trained on each of the 3 platforms AND the transition process between them.

It’s tempting to use Asana, Slack, Zapier, MailChimp, ClickFunnels, and ten more pieces of software. They’re all awesome. But every new piece you add should replace one (or two) old pieces. Keep it simple.

 

Make updates.Your staff playbook is a living document. You’re going to change your software; change your systems; and change your staff. Revisit the playbook quarterly. Cut any information that no longer applies; update any instructions that need to be updated; and add checklists on any new procedures.

 

Finally: don’t leave any gaps.Despite all of my imploring to “cut, cut, cut”, you’re really better to include too much information than too little. Include every step on a checklist; don’t let a staff person guess what to do next. There’s no such thing as common sense. Don’t assume anyone knows what to do. The greatest gift you can give to your staff is clarity of purpose AND process.

 

I recently went back and rewrote “Two-Brain Business.” In fact, I compressed that book and “Two-Brain Business 2.0” into one, and I added articles from TwoBrain 2018 too. The final result was a shorter book than any of the above (around 150 pages instead of 250). But it’s FAR better, because it’s clearer.

When we redid our Incubator over the summer, we had a ton of new information and data to present. But the modules and instructions and videos that we provide for homework help are actually shorter. And they’re better–you can see it in the ROI our clients get.

More isn’t better. Better is better. And clearer is always better. Be clear.

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Leadership Through The Four Phases

A successful entrepreneur passes through four phases: the Founder Phase, Farmer Phase, Tinker Phase and Thief Phase.

Within each of those phases, he must grow as a leader. Every business is built on relationships. But, as the psychologist Alfred Adler wrote, “Every problem is an interpersonal relationship problem.” Relationship problems don’t disappear as entrepreneurs become more successful; they just get bigger. And good entrepreneurs must develop the skills to maintain more relationships with deeper connection as they grow.

(Not sure which phase you’re in? Take the test here.)

In the Founder Phase, the entrepreneur must lead his clients. His focus should be on retention: helping the client plan for future visits; acting as a trusted confidante and advisor. He’ll be invited to their weddings; one or two might cry on his shoulder. He must manage his relationships with clients in person for as long as possible (usually up to around 150 clients.)

But good entrepreneurs usually have more than 150 clients. In the Farmer phase, the owner must transfer client relationships to a staff member for the first time. Clients might wonder why Dr. Jane isn’t providing their treatment today, or why Colin wasn’t there to greet them at the door like he used to. In the Farmer phase, the entrepreneur must learn to lead a team. She must clearly establish roles and tasks; evaluate success objectively; inspire and motivate her team to deliver her vision of success. She must resist the temptation to “just do it myself!” and learn how to delegate so she can focus on growth.

Learning to be an effective manager is a real challenge, and many owners never make it beyond Farmer phase for that reason alone. But the best entrepreneurs create a management layer to free them from daily delivery of their service. This smaller team is comprised of 3-5 roles: usually a COO or General Manager, a CFO, and a CSO. Sometimes, the owner might also place a supervisor in charge of new product development, or might separate Sales from Marketing. But his purpose is to move his focus away from one business to focus on another. This is the Tinker phase of entrepreneurship, where the owner focuses on developing cash flow assets, solidifying his base, building new ideas or entering new niches. In the Tinker phase, the entrepreneur must learn to lead himself. He must overcome Impostor Syndrome, manage stress, and refocus on his family. He must make the scary reach for a new opportunity without losing his foothold.

If she makes it to the Thief phase, the entrepreneur will focus most on her legacy to her community. She will mentor others; she’ll create an endowment or ongoing empowerment program for others. She must lead her community to see her vision and carry out her legacy after she’s gone.

Some examples:

Founder phase leadership: I was a personal trainer. I had one-on-one relationships with every client. I went to their weddings and sent them flowers when they were sick. I booked their next appointments before they left after their workouts, and answered their phone calls at 4am.

Farmer phase: I had to shift my clients to other trainers, but still pay myself. That meant keeping the team engaged and motivated, maintaining a relationship with clients without much FaceTime, and focusing the time I had on growing the business. It was a tough balance: more than once, a client said “Why are you hiding in your office instead of chatting with me?”

Tinker phase: I had to hire specialists whose knowledge was deeper than mine in their area. I had to overcome the paralysis of working with millions of dollars in expenses. I had to manage my stress and prioritize my family time in a stream of never-ending work. And I had to learn to focus on one opportunity at a time. I began managing myself: my cognitive load, my health, and my own weaknesses as a leader. Then I began working to improve all of those things.

Thief phase: I am building infrastructure to protect and continue my legacy. In my mission to make 1,000,000 entrepreneurs profitable, I will need dozens of professional mentors using the TwoBrain platform. And in my mission to help local kids play sports, I will need to create a recurring funding pool to pay for their opportunities. These are two elements of the legacy I want to leave. Fulfillment of that legacy means leading others to carry it out when I am no longer able to.

Leadership is a common buzzword. Dozens of books from former military experts, videos from TedX talks, and courses from industry teachers shed wisdom on the topic every year. Every one is valuable. But they all boil down to two words: “FOLLOW ME.”

Luckily, focusing on the specific areas of leadership you need to improve will help!

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A Recurring Revenue Stream for Clinicians

You became a clinician to help people.

You opened a clinic to make money.

But the faster you heal someone, the less money you make. It’s the Hippocratic Catch-22.

So the only way to make more money is to see more clients…but wait!

What if you could help clients AVOID problems by seeing them before it’s too late? What if you could increase your revenue by seeing people when they’re NOT in pain? This is the subscription model for care.

First, you establish a monthly subscription product. The client is charged every month for a scheduled visit to your office.

On that visit, you perform a brief assessment and ask about the client’s wellbeing. Then you help them take steps to build a margin of health and move further away from sickness. You prescribe an activity or plan for them to follow.

For example, on their January visit, you might tell a client: “If you lose ten pounds, your back pain won’t keep coming back every few months.”

Then you refer the client to a local nutritionist or dietitian, or tell them about your nutrition program.

You might tell a client in March: “If you strengthen your core muscles, you won’t keep injuring yourself when you’re moving stuff around in your garage.” And then you refer the client to a local personal trainer or CrossFit gym.

The next month, you reassess the client and make another prescription. The prescriptions don’t always have to cost the client money, but should always be the truth.

There are many examples of proactive medicine or “pre-habilitation” out there already. Some clinics run the model I just described. Others charge an annual up-front fee in excess of $10,000, and run the client through a full battery of tests over a day; then the client leaves with a prescription for nutrition and exercise. Others, like InsideTracker, are all online; they take blood tests and update a client’s health dashboard every quarter. And since blood testing is becoming far cheaper, many clinicians are including this service already.

What else can you prescribe? Well, depending on your knowledge and assets, you might prescribe:

Massage
Strength training
Nutrition
Yoga
Sleep assessments
Sauna
Cryotherapy
Supplementation

 

You might provide some of these in your practice, or you might refer them out to a trusted partner, and earn a referral fee. Either way, you’re doing the right thing for the client AND the right thing for your practice!

 

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Tinker Phase Mentorship is Here!

In the Tinker Phase, entrepreneurs make their first business a cash flow asset, set themselves up for functional retirement, hire a management layer for their businesses, and focus on their key strengths.

A Tinker has built a business that runs itself. Now she’s trying to build another, or to duplicate her first success, or to take her first idea to a new market, or to start over with a new idea.

If she’s not given new challenges, the Tinker will probably stick her hands in the machine, constantly “tweaking” her original business until it’s broken. Some of the Tinkers in TwoBrain are turning their businesses into franchises, developing online projects, partnering with other owners, and starting second companies. Others are setting up their retirement plans and buying buildings to create cash flow assets.

Our role as mentors to Tinkers is to help them identify the next big project, and then keep them focused on it. I’ve never met a Tinker who didn’t have at least three big projects in mind. Free from their original business—and still making passive income from it—the Tinker’s greatest risk is killing the golden goose.

The Tinker’s attention must shift from developing their first business to developing themselves as a leader. That means a plan for physical activity, mental acuity, and mental training. It means peer support: “It’s lonely at the top” describes the Tinker to a capital T. It means mentorship from someone who has successfully navigated the “valley of death” created by hiring a management layer for the first time.

Not sure which phase of entrepreneurship you’re in? Take the test here.

The 2019 Tinker Program will include:

3 meetups per year (this year will be Houston, Chicago and *probably* San Francisco.)

A ticket to the 2019 TwoBrain Summit in Chicago

A 1:1 call per month with your Tinker mentor

A monthly group call for all Tinkers

A private Facebook group for Tinkers

In addition, you’ll get all new higher-level curriculum, special resources for you ONLY, and more!

Time to evolve as an entrepreneur!

The Tinker program is available at an introductory rate of $9000 for 2019! Click here:

https://twobrain.com/product/tinker-phase/

(the password is ‘twobraininvite’)

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Functional Retirement

Age 65: gold watch, couch, The Price Is Right on tv. Ahhhhh….

Not for us.

For the entrepreneur, retirement means cash flow without your presence. It means choice: Do I go into the office today, or not? Do I work from Florida, or Nebraska? Do I need to be anywhere…or can I choose to write instead?

And that can happen at age.

Kaleda Connell is 29 and retired. Her story is on TwoBrain Radio here.

Let me be clear here: Kaleda doesn’t have to work anymore. Unless she wants to (she does.)

Last summer, while sitting on a deck at a waterfront restaurant, I told my wife: “I think I’m going to retire in two more years.”

She said, “Retire from what?”

She was referring to my lifestyle: I wake up when I want, write for a few hours, read books, ride my bike, and play with my kids. I coach their teams. I wear jeans and cargo shorts and t-shirts. I look like a retiree, except for the physical part. I look 40 and feel 30.

This is a dramatic change from me when I was actually 30: I was burned out, broke, and exhausted. I had no clear path forward. I was aging fast: I looked 30, acted 40, and felt like I was 50. I found a mentor that I couldn’t really afford. On my first visit, he asked me, “What scares you most right now?”

I said, “I’ll never be able to retire.”

He said, “You’re not going to retire anyway. You LOVE to work. So stop worrying about it.”

See, I knew “retirement” meant “enough money to stop worrying”, but I thought it also meant old age and a pension of some kind. I didn’t know that I could CONTROL money, build cash flow assets, and actually be the one to decide when to stop working.

A few years later, I listened to “Rich Dad, Poor Dad” on audiobook. I loved the idea of buying and holding. And it made me wonder, “Could this be done with a business? Could I really make my business something that pays me–even when I’m not there?”

The quest began. And I’m here to tell you: your business CAN. So can you.

This is functional retirement: the choice to work–or not–without sacrificing your income.

You can take “mini-retirements” of several months throughout your life, instead of just dropping off a cliff at the end.

You can make a near-passive income while you’re young enough to travel.

You can coach your kids in the middle of the day without calling in a replacement or shipping your product late.

You can go watch the Tour de France while you’re young enough to ride it. I’ll probably go next year…but I don’t have to decide right now, because I can just decide at the last minute.

I might decide to start another company instead (it’s a bit of a habit.) Or go somewhere else, or start writing another book. You can too, if you build your business to get you there.

Functional retirement doesn’t mean living your best with the time you have left. It means creating a life that doesn’t feel like work.

It’s too late for me to be functionally retired at 29. Maybe it’s too late for you to be functionally retired at 42. But is it too late for freedom at 50? Maybe not. Book a free call to talk about it here. I might even be on the call with you (but maybe not.)

 

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The Four Cs of Tinker Phase

When an entrepreneur reaches Tinker phase, she works less on her business and more on herself.

Her needs change. She needs a different type of mentorship. She needs clarity and support. She needs focus: not from the little daily stresses of owning a business, but from the huge stresses of opportunity.

Our Tinker program was built for entrepreneurs who have built a cash flow asset but want to do more. We address the larger challenges of Tinker phase in four ways, which we call the Four Cs:

Curation. There’s SO much content available to entrepreneurs now. Our role at TwoBrain is to filter the books, courses, videos and lessons; find the best; and deliver the right advice at the right time. One of the largest problems for entrepreneurs is overwhelm. We help Tinkers get focus.
Cohort.  We do three in-person meetups per year, and everyone in the room at the Tinker level. Every month, the Tinkers speak 1:1 with their mentor, and then group up on a big video call to talk about big issues together. On Facebook, Tinkers are placed in a group of their own.
Courses. Entrepreneurs at the Tinker level are ready to buy buildings, duplicate their first idea, acquire competitors, or move toward functional retirement. They’re also leading higher-level staff for the first time, and trying to manage their health more efficiently. The curriculum in Tinker phase includes practical courses on leadership, with actionable steps. There are step-by-step plans for fitness and spending more time in Flow State. There are calculators to help determine which investments and opportunities to pursue next. And, of course, it’s all guided by a mentor.
Care. We care about every person in the TwoBrain family. That care is delivered through a delicate balance of empathy and accountability. 1:1 mentorship means the mentor can help you own the problem; distance means the mentor can still see problems objectively and remove emotion from the situation. “Two Brains” means logic and empathy.

 

You are the average of the five people you spend the most time with. I regularly spend $50-100,000 every year on mentorship, because these are the four Cs that have helped me reach my current level. And the same four Cs will get me to my NEXT level (Thief phase). The Tinker program is the culmination of the best mentorship practices I’ve experienced, plus the best mentorship practices the rest of the team has experienced, PLUS the benefit of our successes and the avoidance of our crazy expensive mistakes.

3 in-person meetups per year (first is in February in Houston)
Monthly 1:1 calls with your Tinker mentor
Monthly group calls with the Tinker group for accountability
Private group discussion where we go DEEP
High-level video modules from our partners, mentor team and our own personal mentors.

 

We’ll have a signup link available on January 1, 2019!

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Are You Ready to Be A Tinker?

In the Tinker Phase, the entrepreneur’s focus shifts from building their first business to building themselves.

 

At this level, the Founder of one company diversifies his portfolio to include cash-flow assets, second locations, and maybe new businesses. This requires a larger team, a management layer, and growth as a leader.

Tinkers work through the “valley of death”, when the entrepreneur has to make larger investments to grow. This could mean hiring ahead of cash flow, or buying a building, or scaling up equipment; and usually occurs between $1M and $3M in revenue. This is a stressful period, and Tinkers need both 1:1 mentorship and peer support.

Are you in the Tinker Phase? Take the test here.

 

Our Tinker program will launch in January 2019. In its first year, we expect that many members won’t actually be in Tinker phase yet. But they’ll be close: after reading this list, they’ll identify one or two key elements to overcome before 2020. And in 2020, everyone in the group will officially be in the Tinker Phase.

Here’s the basic list, from “Founder | Farmer | Tinker | Thief”:

Are You Ready To Be A Tinker?

Have you hired an “administrator” to oversee the Client Journey?

Have you begun managing staff instead of performing front-line duties?

Have you done an Energy Audit?

Have you launched at least one opportunity for intrapreneurship?

Have you hired at least one replacement for yourself in your primary service?

Have you done the “apples” and “weed” client exercise?

Have you fired one “weed” client?

Have you started hosting regular staff meetings?

Have you begun to extend your marketing to people you don’t yet know?

Have you started a retention strategy and taught it to your staff?

Have you budgeted for a staff development program?

Have you begun evaluating your staff quarterly?

Have you reached 33% gross profit margin?

Have you started tracking your enhanced metrics: leads, conversion rate, and revenue streams?

Have you started doing any paid lead generation?

Have you started attending a coached fitness program?

 

We measure success with different KPIs, like Effective Hourly Rate and Genius Time. But those are for entrepreneurs who are already Tinkers. If you’re just at the edge, the above are your priorities. If you can answer “YES!” to more than half of the above questions, you might be ready for the Tinker group!

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Can You Afford It?

That new staff person?

 

The expansion?

 

The new software?

 

Any new investment should give you a good return. And before you make that investment, the path to return should be clear. But at some point, you’re going to have to take a risk and spend the money. This is what separates you from your staff: the willingness to put your money down. Here’s how to test the affordability of your move and mitigate your risk before it costs you real money.

Staff:

First, make sure the new position can generate at least 2x its cost. This is called “Labor Efficiency Ratio”, and every person in your company should have a clear link to generating revenue. We can break this down separately for management and labor, but 2-2.5x their pay is your target.

For example, if a staff person will cost you $100,000 per year, they should generate $200,000-$250,000 in revenue for the company.

But even if you have a clear understanding of how they’ll drive $250,000 in revenue, it’s unlikely they’ll start earning new business right away. You’ll have to bridge the gap by paying them even as they’re getting started. Test whether you can afford it first:

Open a bank account

Start “paying” the person’s salary+benefits into the bank account every second week (or whenever you pay your staff)

Test for three months to make sure you can afford the position before you hire anyone.

 

Equipment:

First, make sure the equipment is a cash flow asset: it should increase your revenues without increasing your time spent. As above, your OWN labor efficiency ratio is really important. Don’t buy yourself a lower-paying job!

Then, try to presell space or time on the equipment. If you can cover at least half of the equipment’s cost by pre-selling a service, you’ll have a good indication that it’s a good addition.

For example, if you want to buy a new cryotherapy tank, pre-sell cryotherapy visits or soaks before you begin paying for the machine.

If you’re buying equipment for your gym, run a specialty program that will pay for at least half the purchase price of the new equipment.

Then, before you purchase:

Open a separate bank account

Calculate the loan or lease payment monthly

“Pay” the new bank account the amount of the new asset every month for three months

Did you notice the hit on your cash flow?

Basically, you want to test your long-term purchases before you commit to them. Then ask your mentor how to plan for a return on your investment!

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