What’s your big picture (part 1)

Warning

I’ll give you an advance warning, you’re going to need a notepad, pen and calculator on this one. We’re getting in to the business numbers today and next week. So I know this can prove to be a bit confusing for some or it may even become a bit mind numbing for others – but choose not to do this at your own business peril.

Every CrossFit Affiliate owner has their own reasons for getting in to business. And it’s fair to say that there are no right or wrong reasons for opening up your own CrossFit box. However, whether you’ve opened up your own box so that you can set yourself up for financial security or if you’re doing it so that it gives you the balance and lifestyle that is important to you, the one common denominator that you need to consider is; What is your big picture?

“What do you mean by big picture?”

C’mon, it’s not that hard is it?…

When we talk about knowing your big picture, what we really mean is you need to know exactly what it is you want to get out of your business long term. As I mentioned, for some it may be about living the CrossFit dream – getting out of the corporate hamster wheel and having the freedom and the lifestyle that you desire. For others, it may be all about development, growth and financial security.

Irrespective of where you want to go with your business, you still have to have a picture of what it’s going to look like, what it’s going to do and importantly how it’s going to help paint your big picture.

Time to paint the picture

So here’s a little exercise that we like to do with some of our box building members that lack direction in their box.

If I was to ask you, five years from now, what is it that you want from your business? What sort of income do you want to earn? How many weeks holidays do you want to be able to take each year? How much time do you want to spend coaching each week? How much free time do you want each week to spend with the family, friends or to do your own thing? Try and get as specific as possible with all of these. Really drill down and get a clear picture of your big picture. Like I mentioned, there is no right or wrong with this one, it’s really up to you….

What’s it all going to cost?

Whether you run a CrossFit box as a hobby or as a serious business, at some stage, you will still need to factor in the costs. So let’s start to do this by looking at the answers to the previous questions and factoring in our general operating expenses for our big picture operations.

Firstly, let’s add up the expenses of your ideal personal income, the wages needed to cover your holidays, the general wages to pay for other coaches (and any other wages expenses you’ll have such as admin support etc), and let’s also look at general expense items such as rent, power, water, phone, internet, affiliation, business loans, insurance and so on. When working out these expenses, be a bit mindful not to base it on what you’re doing now. Rather, you need to base it on what it will be when you’re operating at your big picture capacity. This may involve offering more class times, renting a bigger space or purchasing more equipment. If you need a bit of a hand with this, I’ve got a great budgeting spreadsheet that you can use. Simply click here to go to our contact page and tell me a bit about where things are at for you with your business and mention that you’d like the budgeting spreadsheet.

What you will finish up with is an end figure of the exact dollar amount that you’re going to need to achieve the lifestyle and have the business that you want. And now divide this number by 12 to get a monthly end figure amount.

The member currency

Now that we have this monthly end figure in mind, it’s still not an actionable goal. To make it more actionable and specific for what we can aim for, we now need to work out our member currency. Basically, how many members do we need to have to achieve this end figure.

To work this one out, firstly you’re going to need to know what your average client spend is. The average client spend is how much, on average, your members spend at your box each and every month. For some box owners, it’s going to be just the membership side of things. For more developed boxes, it’s going to include multiple streams of revenue including membership, nutrition programs, product sales and personal coaching amongst other items.

The easiest way to work out your average client spend is to have a look at your last three months of trading. Simply take what was deposited in to your bank account each month and divide that by the number of members you had at the end of each corresponding month. And from there, simply average out the three months of trading.

If you’re yet to open your own box, an indicative average client spend that we’ve seen with a lot of boxes is around the $150 per month.

With your end figure in mind, break it down do a monthly cost. From here, divide this monthly cost by your average client spend and you will now have an idea of how many members you’re going to need each month to achieve this goal.

Where are you at

Okay, time to take stock. You know how much you’re going to need each month to have the business working for you. And you also know exactly how many members you’re going to need to achieve this. Now you need to work out how far from the mark you really are.

This one is easy. How many members do you currently have? Now take that away from how many you need.

What’s your timeline

You now know exactly how many new members you’re going to need to enrol so that you can achieve the business and lifestyle goals that you’ve set in place. This means that we now need to put some timelines in place for when we want to achieve all of this by.

So the big question is how soon do you want all of this achieved? When do you want to hit your big picture? Are we talking 6, 12, 18, 24 or even 36 months – it’s up to you really. Just keep in mind, goals need to be challenging, yet realistic, but they also have to be reviewed.

Okay – so there’s a fair bit to get you started. Have a crack at these numbers and next week, we’ll dig a bit deeper into this little strategy called reverse engineering.

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