Three Underutilized Business Tools and How to Use Them, Part Two
Rethink how to use your calendar and budget to strategize for success.
As a fitness entrepreneur, you have many tools at your disposal to help grow and run your business. Some are designed to address specific areas—marketing, sales or operations, for example—while others help you build the structure and outline the framework that will bring all of those individual parts together.
In part one of this series, we discussed how a written business plan is an essential asset that helps you identify your goals and outline your business. Your business plan is your road map to success—it refines your mission and vision, hones your focus, and empowers you to think critically about key aspects. In part two, we explore two additional tools that will accelerate your growth and help you execute the principles in your business plan: your calendar and your budget.
How to Use Your Calendar as a Business Tool
Having a written business plan is a great first step; it allows you to identify your high-level goals, vision and strategy. But you’re missing out on the real value of the plan if you don’t take the next step: translating those goals into identifiable action steps tied to timelines.
Bring your business plan objectives to life by plotting your course and setting specific deadlines. Sometimes entrepreneurs make the mistake of not attaching deadlines to goals, or not taking a focused, realistic look at how long it will take to accomplish those goals.
That’s where the value of the calendar comes into play. As a business owner, you must think of your calendar as a tool—not just a place to store appointment information. If you use your calendar properly, you’ll be able to apply structure to your plans and create the time pressure you need to force action.
Tips for Using Your Calendar
Here are a few key things to consider when using your calendar:
Be comprehensive. Fill your calendar with goals and deadlines that have specific, achievable steps. For example, if your goal is to hire your first employee in September, then your calendar must reflect when you’ll start the search, when your new hire will begin working, and when and how long you will train that person. Don’t make the mistake of thinking it’s enough to simply plug in the hire date; that alone will not set you up for success.
Plan out at least 18 months. Why such a long period? Taking the time to think “big picture” forces you to think about your long-term goals. This will also help you flesh out intermediate and short-term goals. In other words, taking the “long view” gives you more clarity about the steps you need to take to reach those goals. The steps and goals will change over time, of course, but planning in this way is an essential exercise that leads to much-needed clarity.
Review your calendar weekly. At least once a week, sit down and review your business timelines. Keeping this information fresh in your mind will help you stay focused on what’s coming up next and how best to plan for it.
Revise your 18-month calendar quarterly. Set aside a few hours every 3 months to dive back into your 18-month plan and make adjustments based on what you’ve learned in the past 90 days. Have your goals changed? Have your timelines shifted? Adjust accordingly.
Handwrite your details. I recommend putting a big paper calendar on the wall and handwriting your big deadlines on it. When you see 18 months’ worth of time spread out this way, you can better visualize the big picture and your plan will start to take shape. Planning on a computer screen just doesn’t have the same visual power or enable you to process the information in the same way.
How to Use Your Budget as a Business Tool
Your budget is another key tool at your disposal. Monitoring expenses and cash flow is critical for a small business, so use your budget as a planning tool to keep your finger on the pulse of your financial health and stability.
Now that you’ve turned your business plan goals into action steps with timelines and deadlines, the next task is to tie the action steps to anticipated revenue and expenses.
Tips for Using Your Budget
What’s the best way to build and maximize the value you get from your budget? Here are a few things to consider:
Be realistic. Your starting point, of course, is to accurately account for your monthly income and anticipated expenses. There are plenty of books and online resources (and professionals—more on that below) to assist you with this, but in general you should be generating a list that genuinely reflects your best estimate of what you’ll be spending and what you’ll be earning.
For example, in addition to income, think about expenses related to equipment, rent, your physical office, marketing, business development, travel, moving expenses, depreciation, repair and maintenance, liability insurance, legal expenses, payroll, and subscriptions and dues, to name a few. Create what’s known as a “chart of accounts”: a list of all assets, liabilities, revenue and expenses you’ll have.
One note of caution: Don’t get too detailed with your categories initially. It’s easy to get lost in the minutiae if you take this exercise too far. Instead, start with easily identifiable categories that you can track and that will give you an accurate financial picture.
Track your numbers. Get in the habit of looking at your numbers regularly and comparing your projections with reality (a budget variance report). A budget is worth nothing unless you’re comparing it to your actual numbers—and adjusting accordingly. A good rule of thumb is to do this once a month.
Build your budget into the calendar. After you’ve created a budget, tie the numbers to key dates. Are there times when you know that your expenses will be high? Are there times when you anticipate that your revenue might be low? Identify these dates and work backward from them, so that you’re adjusting your spending accordingly. Avoid a cash crunch by getting in front of expenses or predictable slow months.
Enlist the help of professionals. When young fitness professionals tell me they “can’t afford” to hire an accountant or a bookkeeper, I ask them this: Would you counsel fitness clients to sit at home and try to get in shape or change their lifestyle all by themselves? No, of course you wouldn’t, because you know that if they do that, they will inevitably make a lot of mistakes that will hurt their development and slow their growth. Instead, you’d advise them to retain an expert.
The same reasoning applies here. Seek the help of an expert who can guide you through the budget process and help you add value to your business. A great accountant/bookkeeper will also generate other accounting tools (profit and loss statement, balance sheet and cash flow statement, for example) that will assist you in keeping on top of your most important financial metrics. Spending the money on the right professional will save you a lot of time and money in the long run. See it as an investment, not an expense.
Become financially literate. To have a chance at being a successful business owner, you must be financially literate. You don’t need to be an expert, but you do need to have a basic understanding of how to build a budget and read financial reports. If you don’t understand your numbers and how to evaluate the general health of your business, how will you ever know how to stay on track or make necessary adjustments? There are plenty of $20 books you can buy that will teach you how to build a budget.
The Basics Matter
The underutilized business tools presented in this two-part series may seem obvious, and yet many fitness entrepreneurs struggle to master them. Take the time to revisit your business plan, calendar and budget, so that you can use them to set your business up for long-term success.
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