The First Of My Promised "E-Myth Articles"
Many fitness pros dream of building a training business that is bigger than a one-person enterprise.
They recognize the obvious benefits of creating a business that is more than a "one man band":
- The financial benefits of increased revenues and, eventually, profits
- Building a business with equity value, that can be sold for substantial rewards
- The status and esteem that comes from owning a "real" business
- Leveraging your time, because other people are doing lots of the work (while you retain the profits)
- The satisfaction of employing and developing other people
- The enjoyment that sometimes comes from spending more time on "big-picture" issues, and less time on mundane details and daily "fires"
Unfortunately, many fitness professionals are unsure how to take the necessary steps to build a sustainable business. Just to give you an example, here's what one trainer recently told me:
"My clients rave about me, and I can get anyone great results. I'm overwhelmed with all the clients I can handle, but realize that just training client after client is not the way to go over the long term. I want to build a company, but I don't know the first thing about managing a business. For instance, how can I even find time to grow a business if I am overwhelmed as it is? And every time I look for good people to hire, they want "big money" and then they often turn out to be undependable. What do I do?"
Does this sound familiar?
The issues that this trainer raises are quite common.
So here are some questions that the prospective business owner should consider before they embark on building a business.
Caveat Emptor: Are You Sure You Want To Do This?
First, a few important warnings. Many people would rather dream about building a business than go through the process to actually do it. Put another way, lots of trainers want to own their own studio, but don't want to endure the pain, frustration, and perseverance that's often required to build one.
"Studio owner? It sounds so good! No more fitness director! No more paying half my fees to the gym...and you're in charge!
It all sounds good but before you make the choice to build a business, be sure that you understand the following caveats:
1. It will be much harder work than you ever imagined, and -- at least initially -- will increase, rather than decrease, the time you spend working. A business takes on a life of its own, and can often consume you. Be ready to endure sleepless nights and worried weekends as you obsess about how to pay your bills, grow revenues, handle tough employee issues, and deal with immediate crises. Are you sure you want this kind of pressure?
2. A common rule of thumb is that it takes twice as long and twice as much money to get a business off the ground as you originally thought it would. There are smart ways to grow that can mitigate this rule of thumb, but it is best to be conservative. If you don't have a solid cushion of reserves to keep your business and personal needs satisfied (say, for 1-2 years), you should wait until you have a more stable financial base.
3. You will have to shift away from work you may love (e.g. training clients) and into work that you may find brutally tedious (e.g. bookkeeping, recruiting and managing people, payroll, marketing, human resource issues, legal issues, and putting systems in place) -- but this shift is essential if you're to build a company. Do you really want to spend your time doing this kind of work?
4. While many people go into business to satisfy their egos, they often find that the best way to build a business is to get out of the way and put your ego aside. Otherwise, you'll never "replace yourself." Many would-be entrepreneurs aren't willing to give up this level of control or credit. Are you building a business that's about you, or one that's about a sustainable organization?
5. You'll need to have incredible patience with other people. It takes time and effort to build and manage a team. Many independent contractors became independent contractors in the first place because they don't like dealing with other people (except when they are paying clients). If you don't love working with, negotiating with, resolving conflicts with, and collaborating with others, don't take this path.
6. Those who have families to support may be disappointed to learn that some spouses and parents are not as supportive as you want or need them to be. That's because many family members don't know what it takes to run a business, are satisfied with how things are going now, and are afraid to take on new risks. Be ready for some family strife as you get your business going, and don't rely on family members for support when you hit road bumps -- get that support from other business owners.
7. There are no guarantees. Most businesses don't make it past their first year, usually because of inadequate capital and poor planning. Launching a business is very different from creating a successful company that survives and thrives, and there is a chance that you will fail. Of course, the best entrepreneurs handle this issue by jumping into a new venture only when they have eliminated as many risks as possible (e.g. they have a financial cushion, a stable base of clients already in place, etc.). Do you have the stomach to make a leap with no guarantee of success?
8. Closely related to #7, there will never be perfect information or certainty when you launch your business. Many independent professionals are analytical by nature -- they want to know that a market exists for their services, and intend to plan out exactly what kinds of numbers they can achieve. Planning is good, but you have to be willing to endure ambiguity and incomplete information. That means making decisions and taking action with 60-75% of the information you need, and leaving the rest to your instincts. Lots of people can't handle this kind of uncertainty. Can you?
9. Finally, to build a business, you need to make marketing a priority. Many independent contractors get by on word of mouth, but that's not enough to grow a substantial enterprise. Are you willing to make marketing a priority?
We all know people who talk constantly about how "someday" they will start their own business. Many of these people never seem to take action. Why? The answer is that they get stuck at one of the above considerations. They like to talk about what's possible, because that's a lot easier than taking action and risking failure. While it can be annoying to listen to someone ramble on and on about their dreams, at least they're making the right decision to think hard about these very important issues.
Okay, are you sure you want to do this? If so, read tomorrow's post…
They recognize the obvious benefits of creating a business that is more than a "one man band":
- The financial benefits of increased revenues and, eventually, profits
- Building a business with equity value, that can be sold for substantial rewards
- The status and esteem that comes from owning a "real" business
- Leveraging your time, because other people are doing lots of the work (while you retain the profits)
- The satisfaction of employing and developing other people
- The enjoyment that sometimes comes from spending more time on "big-picture" issues, and less time on mundane details and daily "fires"
Unfortunately, many fitness professionals are unsure how to take the necessary steps to build a sustainable business. Just to give you an example, here's what one trainer recently told me:
"My clients rave about me, and I can get anyone great results. I'm overwhelmed with all the clients I can handle, but realize that just training client after client is not the way to go over the long term. I want to build a company, but I don't know the first thing about managing a business. For instance, how can I even find time to grow a business if I am overwhelmed as it is? And every time I look for good people to hire, they want "big money" and then they often turn out to be undependable. What do I do?"
Does this sound familiar?
The issues that this trainer raises are quite common.
So here are some questions that the prospective business owner should consider before they embark on building a business.
Caveat Emptor: Are You Sure You Want To Do This?
First, a few important warnings. Many people would rather dream about building a business than go through the process to actually do it. Put another way, lots of trainers want to own their own studio, but don't want to endure the pain, frustration, and perseverance that's often required to build one.
"Studio owner? It sounds so good! No more fitness director! No more paying half my fees to the gym...and you're in charge!
It all sounds good but before you make the choice to build a business, be sure that you understand the following caveats:
1. It will be much harder work than you ever imagined, and -- at least initially -- will increase, rather than decrease, the time you spend working. A business takes on a life of its own, and can often consume you. Be ready to endure sleepless nights and worried weekends as you obsess about how to pay your bills, grow revenues, handle tough employee issues, and deal with immediate crises. Are you sure you want this kind of pressure?
2. A common rule of thumb is that it takes twice as long and twice as much money to get a business off the ground as you originally thought it would. There are smart ways to grow that can mitigate this rule of thumb, but it is best to be conservative. If you don't have a solid cushion of reserves to keep your business and personal needs satisfied (say, for 1-2 years), you should wait until you have a more stable financial base.
3. You will have to shift away from work you may love (e.g. training clients) and into work that you may find brutally tedious (e.g. bookkeeping, recruiting and managing people, payroll, marketing, human resource issues, legal issues, and putting systems in place) -- but this shift is essential if you're to build a company. Do you really want to spend your time doing this kind of work?
4. While many people go into business to satisfy their egos, they often find that the best way to build a business is to get out of the way and put your ego aside. Otherwise, you'll never "replace yourself." Many would-be entrepreneurs aren't willing to give up this level of control or credit. Are you building a business that's about you, or one that's about a sustainable organization?
5. You'll need to have incredible patience with other people. It takes time and effort to build and manage a team. Many independent contractors became independent contractors in the first place because they don't like dealing with other people (except when they are paying clients). If you don't love working with, negotiating with, resolving conflicts with, and collaborating with others, don't take this path.
6. Those who have families to support may be disappointed to learn that some spouses and parents are not as supportive as you want or need them to be. That's because many family members don't know what it takes to run a business, are satisfied with how things are going now, and are afraid to take on new risks. Be ready for some family strife as you get your business going, and don't rely on family members for support when you hit road bumps -- get that support from other business owners.
7. There are no guarantees. Most businesses don't make it past their first year, usually because of inadequate capital and poor planning. Launching a business is very different from creating a successful company that survives and thrives, and there is a chance that you will fail. Of course, the best entrepreneurs handle this issue by jumping into a new venture only when they have eliminated as many risks as possible (e.g. they have a financial cushion, a stable base of clients already in place, etc.). Do you have the stomach to make a leap with no guarantee of success?
8. Closely related to #7, there will never be perfect information or certainty when you launch your business. Many independent professionals are analytical by nature -- they want to know that a market exists for their services, and intend to plan out exactly what kinds of numbers they can achieve. Planning is good, but you have to be willing to endure ambiguity and incomplete information. That means making decisions and taking action with 60-75% of the information you need, and leaving the rest to your instincts. Lots of people can't handle this kind of uncertainty. Can you?
9. Finally, to build a business, you need to make marketing a priority. Many independent contractors get by on word of mouth, but that's not enough to grow a substantial enterprise. Are you willing to make marketing a priority?
We all know people who talk constantly about how "someday" they will start their own business. Many of these people never seem to take action. Why? The answer is that they get stuck at one of the above considerations. They like to talk about what's possible, because that's a lot easier than taking action and risking failure. While it can be annoying to listen to someone ramble on and on about their dreams, at least they're making the right decision to think hard about these very important issues.
Okay, are you sure you want to do this? If so, read tomorrow's post…
posted by Pat Rigsby at 11:51 AM
<< Home