257. Overpaying & Undercharging: How To Wreck A Coaching Business By Not Understanding Profit Margins
The Fitness Business Podcast with Erin Dimond and Jordan Dugger
Erin Dimond and Jordan Dugger
4.9 • 670 Ratings
🗓️ 23 August 2021
⏱️ 22 minutes
🧾️ Download transcript
Summary
The nightmare situation as an online coach is to scale your company, hire assistant coaches and a staff, have your staff make more money than you, and you become a minimum wage entrepreneur with all the stress and risk that comes with owning your own business. We don't want that to be you so today's episode is all about profit margins, common mistakes we see within IFCA and the industry, and how to make sure you pay employees fairly while having healthy margins.
Time Stamps:
(0:10) Profit Margins
(1:30) Common Mistakes
(4:20) Undercharging for Your Service
(9:00) Paying Employees and Healthy Margins
(10:06) Gross vs Net Profit
(15:30) Raising Your Prices
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Transcript
Click on a timestamp to play from that location
| 0:00.0 | What is up? Welcome back to the FitBiz podcast. I am excited to talk to you today all about profit margins. |
| 0:07.9 | I think oftentimes we start our business and it's like we're great. We're making money. No, the business is making money. Are you actually making money? |
| 0:16.4 | And in the beginning, as an online fitness coach, the answer is usually yes, because all that money is typically going in your pocket. |
| 0:23.4 | We have really low cost of goods. |
| 0:25.2 | And at the very least, we might have a few subscriptions and things. |
| 0:28.5 | You might have some mentorship. |
| 0:29.9 | But as the business grows and you have to invest back in it, a big, big mistake. |
| 0:34.1 | And we'll talk about all the mistakes that I see IFCA students make when they come |
| 0:39.7 | into IFCA mistakes that we've made is you continue to look at that top line revenue and you |
| 0:45.9 | don't pay attention to profit so I've seen things as bad as students making 30 grand a month |
| 0:51.5 | revenue and bringing home profit like a thousand to three thousand dollars so |
| 0:56.3 | we'll talk about how to avoid that why that's bad the most common ways that that happens |
| 1:01.2 | and then how to actually understand profit we'll talk about the difference between gross |
| 1:05.5 | profit and net profit and what what those margins need to look like to have a healthy business. So I'm very |
| 1:12.3 | excited about this. It's something that you hit a certain point in business and you're cruising |
| 1:16.9 | along and the same things don't work anymore and it's because you have to pay attention to this. |
| 1:21.3 | So cool. Let's dive right in. So how to understand profit margins in your coaching business. |
| 1:26.5 | And the biggest things that we need to |
| 1:29.1 | realize, the biggest common mistakes are undercharging, overpaying employees, and squeezing |
| 1:34.5 | your margins so thin that you get to a point that you become a minimum wage entrepreneur. |
| 1:39.6 | And you end up making what you would make at a box gym, except personal training, except you have three times the stress and so much more |
| 1:46.9 | risk. So you get yourself in a really silly position, all for what, right? Just to say |
... |
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