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One of the most positive qualities that many fitness studio owners share is a burning desire – an insatiable willingness – to “do it all.” It’s what separates entrepreneurs from employees in the first place. An employee is more than willing to set out on the path that someone else has carved for them. An entrepreneur has a need to carve a path for themselves.
Unfortunately, this mentality can also get even the most passionate studio owners into a bit of trouble – particularly when it comes to their finances. Being able to balance your own checkbook and running the finances of your studio or gym are NOT the same thing, nor should they ever be treated as such. To that end, the importance of finding the right accounting professional to help support your small business as it continues to grow and evolve cannot be overstated enough.
There are a number of essential ways, in particular, that an accounting expert can help your fitness studio or gym.
When You’re Just Starting Out
Perhaps the most important role that an accounting professional will play in terms of your fitness studio takes place when you’re just starting out. One of the most common mistakes that many business owners make involves selecting the wrong business entity – a small problem that can have major ramifications when tax season rolls around. A accounting pro who is intimately involved with the makeup of your business from a basic level can help make sure this doesn’t happen to you.
Along the same lines, an accounting professional can also help make sure that your accounting system is properly set up in the first place. They can make sure that you’re picking the right accounting system that actually supports your long-term goals for your studio and can create a chart of accounts to offer superior visibility into money coming into and out of your organization.
The Day-to-Day Grind
Another one of the hugely invaluable ways that an accounting expert can help your small business comes by the small, yet critical, decisions they make on a daily basis. A financial expert can help give you greater visibility into cash flow (including accounts payable and accounts receivable), for example. Cash flow and other instability issues are one of the major reasons why most studios fail in the first place, and having the right person at your side can help you avoid them altogether.
An accounting professional can also help make sure your security controls are properly set up and executed, particularly in terms of factors like compliance. Remember that we’re living in an era where the average cost of a data breach has ballooned to almost $4 million. If the security aspect of your finances is not properly accounted for, it could be putting your entire business at risk. Even one small data breach could expose the personal records of multiple clients, something that opens the door to things like lawsuits, and that could eventually close the door on everything you’ve worked so hard to build.
Other Benefits
A financial professional will also play an important role when it comes to growing your fitness studio or gym. Remember that both an inability to scale up as fast as you need AND growing your business faster than you can sustain are additional reasons why many small businesses fail. Because such a large part of your growth and expansion pace has to do with personal finances, it stands to reason that bringing someone into the fold who can leverage their years of experience to your advantage is a very good idea.
If you ever decide that this chapter of your life is closed and that it’s time to look for new opportunities, these professionals can also help sell your small business as well. Selling a business is a process filled with potential mistakes just waiting to happen, and the expert hand of someone who has been in this position before is something that you literally cannot put a price on. It isn’t just an investment in your organizational ability – it’s an investment in the future of your business as a whole.
In the End
The fact of the matter is that there really is no “one size fits all” approach to fitness studio accounting. Every business is a little bit different, which will require a certain level of care and finesse when it comes to finances in particular. Only by consulting the help of a professional as early on in the process as possible will you be able to avoid the normal pitfalls of running a fitness studio or gym and create a financially stable foundation from which to work.
Mike is the Managing Partner of JETRO and Associates. Mike has spent the majority of his career as an entrepreneur. He was CFO and co-founded several companies and has experience in all business stages. He set out on a mission to help businesses that have seen and lived the same experiences he did in business. This is how JETRO was built. He has been in the shoes of many small business owners out there and his end goal is to help them in one area that most business owners are not familiar with, accounting and taxes. Mike earned his Bachelor’s degree in Business Administration and Masters degree in Accounting. He is a licensed CPA in Wisconsin. He is also a Registered Tax Planner. When Mike is not in the office you can find him spending time with family and friends. He is also an avid sports fan and you can often find him rooting for his Brewers, Badgers, Bucks, and Vikings (yes, it's true).
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