“During a crisis, a business’s goal is not revenue creation but rather loss avoidance…break even and cash neutral are gold metals” – Keith Cunningham
Where should your revenue be right now?
The answer honestly really doesn’t matter.
People put way too much emphasis on revenue and not enough on profit…I’ve been way guilty of this myself.
But there is a final step you need to take to truly be financially secure and that is your cash position.
My best friend and CFO for a decade, always preaches about having a cash cushion.
He’s been singing that into my ears for 10 years and I have a LOT more money because of that constant reminder.
Many people are very frustrated with their revenue dropping.
People tie their worth with their revenue but that’s not what makes you financially secure.
Cash is what makes you financially secure.
I am all about making money during this period of time, and several of my clients have been able to generate new revenue.
But I am not going to sit here and lie and say everyone one of my clients is crushing it and bringing in boatloads of new revenue each day.
But what I have trained them up on is to pay attention to how much money they are projected to bring in…and match their expenses up with that revenue to be sure they are cash flow break even.
This means that revenue exceeds expenses enough to not drain any cash.
Be sure to factor into that equation the things that do NOT show up on your P/L like your monthly tax estimate and debt payment.
Generating 20K in revenue and matching your expenses to that 20K will NOT make you cash neutral because you have not factored in a potential tax payment or debt repayment (if any).
If you can get to cash neutral each month during a recession you are winning.
Obviously, the more cash on hand, the more margin for error there is.
But even if you do, draining cash is never a great business decision.
So yes, focus on growing revenue, but the core focus in a recession, especially when you’re most likely still closed, is getting to cash flow neutral… which is a win.
[P.S.] …Whenever you’re ready here are 4 ways to work with me…
1. Get Instant Access to My Covid-19 Special Edition Podcast Episodes
Want gobs of free advice to help your business navigate this pandemic?
Check out this special edition podcast page that’s solely built to help brick and mortar gym owners survive and thrive during Covid-19.
Click link below to access to all the episodes:
2. Get a Free Digital Copy of One of My Books
Want to beef up your library with money making advice from the trenches?
· The Ultimate Guide to Marketing your Gym
· The Ultimate Guide to Sales for your Gym
· Vince’s Hiring Book
· The 4 Stages of Fitness Business Success
Send an email to email@example.com and tell her which one you want.
3. Work with Me 1-1
Want to work directly with me 1-1?
Whether you want to become a better leader, systemize your business or simply get out of the day to day, I’ll help you get there…fast. I take very few clients for this program and have 2 open spots for 2020.
To get more info reply to this message and put “1-1” in the subject line…
4. Chat with Me About Being Accepted into My Mastermind for Gym Owners
Need ongoing coaching and accountability?
Join a super motivated group of gym owners that meet 3x/year to make more money so they can have more free time with their family.
There is so much more you get with this but the only way to apply is through a call with me and I unpack everything for you.
To apply email me, firstname.lastname@example.org with “Mastermind” in the subject.