Managing our financials can be a touchy subject. Sometimes the financial side of business is ugly, so we choose not to look at it. I think this comes from a lack of understanding, knowledge and proper guidance on the subject. Simultaneously, we know that if we want to be profitable, we have to be on top of our finances. Our guest today, Charlie Bean, does a great job of mapping out excellent financial practices in a way that is easy to digest and implement.
What You’ll Learn from this Episode:
• Overall requirements for anyone to find success financially
• 4 significant success keys as a business owners
• Life and business hacks to cut costs
Here’s the Complete List of Tips:
1. Overall requirements for any studio:
Establish your vision.
Establish your mission.
Define a small bowl of values and guiding principles.
Establish your strategies and tactics.
2. Your studio could be a hobby, but you should think of it as an investment. These three keys should be top of mind:
Return on Investment: Something equal to putting cash in the bank.
Return of Investment: Paying off your capital expenses (CAPEX).
Operating management compensation: Earning and income from the business.
3. Four significant success keys when thinking about your job as the studio owner/operator:
Being technically excellent: Delivering and excellent experience to the client.
Business acumen: Maximized utilization of assets and financial prowess.
Managing a team: No way around this one!
Selling your services: Promoting (hint: the best marketing of your business walks around on two legs)
4. Today talk about business acumen
Maximized utilization: What does it mean?
Bums in seats: You only have so many slots to fill
• Plan your revenue expectations (do a projection for baseline, midline and topline volumes)
2. Retail products
3. Food / refreshments
4. Special events
• Determine every possible expense in advance
1. Think in terms of CAPEX and OPEX (capital expenses and operating expenses)
2. Apply a dollar value to everything, do research if you don’t know, assume nothing. CAPEX will be mostly at buildout, OPEX will be ongoing
3. Consider local ordinances
4. Build out a complete financial forecast 12 to 18 months out
• Determine where you can reduce costs before you build
1. What is flexible
2. Negotiate deals, everyone will give a deal, even government
• Determine your final CAPEX and OPEX needs
1. Can you afford it
2. Take your plan to the bank and see if they will lend you money
3. Raise your capital: Grants, loans, leases, lease hold improvements, friends and family
4. What you should expect from lenders
Financing CAPEX and fixed assets w/o and with serial numbers
5. Monitor monthly, produce a budget, actual, variance report on all line items every month
Create a spreadsheet, use pencil if you need to
Adjust accordingly as you move forward
Plan for the worst, hope for the best
Other References in This Episode:
Spin Towel & use promo code “BARRY” or for studio owners, mention FCM!