Episode 383

The Secrets to Building Personal Wealth as a Gym Owner with Mark Fisher

In this episode, Mark Fisher joins me to talk about the secrets to building personal wealth as a gym owner.

[00:00:00] Hello, my friend on today’s episode. I’m here with Mr. Fisher, and we are talking about the secrets to building personal wealth as a gym owner, we’re talking a little bit about the mechanics of how you build revenue and wealth and profitability in your gym and how that cashflow can enable you to build real.

Personal wealth as an entrepreneur, we talk about the pitfalls and things that get in our way of building that wealth and some best practices we think for building that personal wealth as a gym owner. So if you want to create more wealth for yourself personally, this is a great episode for you. Keep on listening.

Welcome to the business for unicorns podcast, where we help gym owners unleash the full potential of their business. I’m your host, Michael Keeler. Join me each week for actionable advice. Expert insights and the inside scoop on what it really takes [00:01:00] to level up your gym, get ready to unlock your potential and become a real unicorn in the fitness industry.

Let’s begin.

Hello, fitness, business nerds. What’s up? Welcome to another episode of the business unicorns podcast. Before we jump into today’s episode, I just want to give a quick shout out to our business unicorns, Instagram account. Honestly, we’re crushing it over there on Instagram. We put out some great content on a regular basis, snippets from this podcast, from our YouTube channel tips, advice.

So all of that is over there for free. So if you’re not following us, go, go to Instagram right now, join us at business unicorns and you won’t regret it. Link is also down below in the show notes. Let’s pivot to today’s episode. Mr. Fisher, welcome. How are you, sir? I am a overall good. Yeah. I was away this weekend speaking at a local host supporters event in Seattle.

So it was fun connecting with some pals I hadn’t seen in a while. And, uh, but it is the, I think third conference in four weeks for me. So [00:02:00] one day I’ll take a day off. It’s not for you listeners. No, no day off for me. Listeners while you still need my help. Jim business. Superman’s here. It’s conference time.

Yeah, for sure. Yeah. Luca Josefar has been on the podcast before. We know him and love him. What a great guy. What a forest industry. Great. And he attracts such great people around him, so I’m glad he got a chance to go. Yeah. Shout out to you, Luca. Well, let’s talk about today’s topic. So today, what we’re going to talk about is actual personal wealth.

So we spent a lot of time on this podcast talking about strategies for, for building profitability and cashflow and through your business, but we haven’t really talked a lot in a while, at least about actually personal wealth, how you having a successfully run gym translates to you taking money out of the business and doing something with it that helps you.

Generate wealth over time. And so this is a big topic. Obviously we could have many episodes about this, but we thought we’d dive in today and just to give a kind of a high level overview of some things we think are [00:03:00] just agreed upon. Best practices, no matter where you turn that it was going to be super valuable.

And also start with a caveat of like, we are not a financial advisors. This is no advice. Yeah. This is musings from two people who have been trying to build personal wealth that are also entrepreneurs and gym owners. That being said, for sure. Big picture. How do you think about personal wealth as an entrepreneur?

Yeah, certainly it’s something that’s easier to create, I think, as an entrepreneur than an employee. But that presupposes that you’re actually making good money with what you’re doing, or at least adequate money with what you’re doing. So the first thing I’ll say is this is probably a confronting conversation that feels sad and distant and inaccessible.

If your gym is not accessible, Garnering sufficient revenue and with adequately low enough expenses that you’re actually able to make a decent income or as we we use the term total owner compensation. I think that’s maybe the first place I would start is we can’t talk about what we do to build wealth with your cash flow if we don’t [00:04:00] have.

Cashflow. So this is a great conversation. I think even if you’re just saving a little bit, that’s more than nothing. I think we had a friend of the show, Billy Hoffacker was on a recently ish. And I think maybe he has talked about some of these things. So it’s important to save as much as you can and start getting investing and money compounds over time.

And as the entrepreneur, as the owner, sometimes the very best thing you can do is just get better at the skills of business. Maybe work with a company like Business Free Unicorns, even if it’s an upfront investment, because then over time, the sheer amount of cash flow you have to do things with to grow your wealth will increase dramatically.

So that’s maybe the first I would say, you got to start with creating wealth, creating, I would say revenue, and then understanding your expenses and building a model that allows there to be enough money left over at the end of the month. Yeah, I think it’s well said, I think there’s probably some of you listening right now who are maybe not at that point yet, where there’s not enough revenue for you to be as profitable as you want to, and you’re maybe not controlling your expenses to the degree that allows that, that profitability to stay [00:05:00] consistently throughout the year.

So you might not be taking much money out of the business yet, which is normal for a business that’s just a few years old and experiencing some growing pains. Or obviously there’s a lot of markets that are still finding their footing after COVID. As we record this at the end of 2024. And so there’s a lot of factors that contribute to whether or not your gym is profitable.

I think you’re right, Fisher. And unless you’re at the place now where it’s consistently profitable and you’re taking some money out of the business as the owner, it’s hard going to be hard to do any of the things we’re talking about yet. So if that’s you. Keep listening, take some notes. You just might not be able to apply this for a little while.

And some of you are at that place where you have been taking money out of the business. So these tips will be immediately useful for you. So let’s just start at the top. So when people are going to think through what the best strategies are for them, how to save, how to invest, how do they even get started in that conversation with themselves?

I think the very first thing that we like to do is Do as always is begin with the end in mind. And the first thing, in fact, one of the playbooks that we have in the Unicorn Society, which we’ll touch on some pieces of it here today, but [00:06:00] we’ve got a pretty comprehensive playbook, I think, for the principles of how we think about this.

And again, we’re, we are purposely not prescriptive about you should do this thing to grow your wealth because we’re not financial advisors. But regardless, I think we need to start with. your goals, right? Everything from like how much you currently making per year, what does that break out to if you were to do that as an hourly rate?

I think those are can sometimes be sobering, but assuming that’s all well and good, then I think there is, then it can get a little fun and we start to want to dream a little bit about, okay, what would be your dream income and dream hourly rate, right? What needs to happen to get there? And then I think you can also start to think about, How much money you would need to retire?

Comfort again, not financial advisor here, but the classic percentage you say is whatever it is you need to live on is optimally 4 percent of whatever you have saved. Or if you want to think about that differently, basically your preferred yearly income upon retiree times 25, we usually put you in a reasonably safe place to retire for a couple of decades and not run out of cash.[00:07:00]

Yeah, I think that’s a great place to start. I think whenever people are trying to figure out how to reorganize their behaviors and their mindset to get different results, it starts with taking like an inventory like this of what am I making right now? What do I want to be making? What’s my dream hourly rate?

What’s the gap there that I need to actually fill? What kind of savings do I need to have for retirement? Even just asking those simple questions of yourself and actually writing down the answers, Looking at those numbers. It was straight in the eye is I think more than a lot of folks do right now, we lived in this wonderful ignorance is bliss kind of place.

But I think just getting started to get tactical and writing down those answers and circling back to it once or twice a year to make sure you’re still on track and see if you’re making any progress. I think that in of itself would be a step in the right direction for a lot of listeners. So let’s say that they’ve done that already.

Then what’s next? What’s next? Yeah. So I think from there, once we’re clear on where we want to go, it goes back to the first thing I said. Okay. So if there is, this is the Delta between. The money I’m made [00:08:00] last year or made this year. If I want to make X realistically next year, and then maybe X the year after, what does that mean for the revenues the business needs to do?

What does that mean for how I control those expenses? And then what actions do I take to do those things? So it’s not a secret. Obviously, arguably it is all downstream of leads, right? Even though people that do what we do are often sad. Cause every gym is like, I just need more leads. And so you definitely don’t just need more leads.

You probably need a lot more things than that, but leads are a part of it. Yeah. Cause one thing that’s interesting too, that I’ll say I’ve observed as well, that. in the spirit of hopefully provoking some people and maybe making you mad at me is on the one hand, listen, you want to be patient. These things don’t happen overnight.

You want to obey the law of the farm. It does take time, I think, to build a business, to build a gym. And on the other hand, if you’re in your second full year and you’re still not paying yourself, or if you’re in your, certainly your third year, something is wrong. That’s okay. It’s not the end of the world.

You’re doing something either wrong or maybe you’ve had horrible luck and you’re the wrong market. But the thing [00:09:00] that I really want to push on here, and if you’re listening to this, I love you so much because I realized this might be like tough love. But if you really care about a business that works and developing some kind of personal wealth, if you’re in year four or year five and you’re still not making close to what you hope to be making and you’re just grinding through and you don’t have a really clear plan for how things are going to be different.

That’s something to, that’s something to be honest about. And it’s something to look into making some serious changes in some situations. It’s really investing if need be for the kind of help that can help you start to really pull different levers and really see kinds of results in some situations. If you really feel strongly, no one can help me and I can do, well, there’s a case made sometimes would be like, this just isn’t the right thing for you.

And again, Not a crowd pleaser comment, but I do think luck always plays more of a role than anybody wants to say. I don’t think it means necessarily that you’re a horrible operator, but yeah, you might need something drastic. Like maybe it is actually the wrong location, right? Or maybe you really chose the wrong model, but I just really want to push on you here because we think about the [00:10:00] personal well generally and we start to think about this distance between what you’re making versus what you want.

If you’ve been spinning your wheels for years and you keep doing more of what’s not working, I really want to push on you to do something different, right? Do something different. Yeah. I think that’s really well said. And we have this conversation somewhat regularly with Unicorn Society members and gym members that we talked to that they think if they just have a little more revenue, then they’ll be able to pay themselves.

If I have a little more revenue, then I’ll be able to take some time off. I have a little more revenue, that revenue is somehow the Holy grail here. And I’m not saying it’s not important, but if you are three years in, and you’re four years in and haven’t paid yourself at all. Having 20 percent more revenue is probably not going to be the magic key that unlocks your ideal income as a gym owner, right?

There’s gonna, there’s gotta be some other things going on. If you’ve made it to year three or year four and you’re just not paying yourself at all. And so I think that those are all really great points for sure. Cause unless you can crack that code and start finding a way to put more money in your pockets, [00:11:00] personally, there’s no wealth to be built.

If you’re just grinding and hustling year after year, and you haven’t found some way to find the right ratios of revenue to expenses that puts some money in your pocket, then there’s no other strategy to discuss. You got to start there. Yep. It’s going to be simple. You either have to make more money or spend less money, right?

And probably both. Yeah. There’s only some both. Yeah. There’s only so much. Yeah. And I think people just only focus on selling. They can sell their way out of any financial issue. And that’s just not the case. More money does not always make more profit. More money does not always make more owner pay. It can, but it’s not always the case.

And oftentimes that do something different is cutting some expenses that you think are sacred. Doing something different often means paying your team differently, often less. Doing something different might mean being, moving to a cheaper place where your rent is actually something you can afford. Might mean raising your rates.

So there’s a lot of things and more revenue is not the only thing that can be on the table. [00:12:00] If you haven’t had a chance yet to leave us a rating and a review on whatever platform you listen to this podcast, it would be so awesome if you take just a quick second to do that. And here’s why. Number one, by leaving us a rating review, you’ll allow our podcast audience to grow some more gym owners can build a life and a gym they’ve loved.

And number two, by leaving us feedback, you’ll help us shape the future of the podcast. So we know what you like. We know what you don’t like and we know what types of content is resonating and what else should we create for you? Thank you so much for your consideration. And now back to the show. Let’s just assume we have some listeners out there and I know we do who have been paying themselves and maybe been paying themselves more of our time.

Maybe they have a salary as part of part of their work in addition that they take some regular contributions or distributions as gym owners. And so what are some levers they have access to start building that wealth? Yeah. So now I think this is where we start to get into the more interesting conversations and more interesting, like the better feeling problems, which is what do I do now that I’m making this money?

And [00:13:00] for me, the next step often is really considering how one keeps the money. And I think there’s a few different ways that I would offer. One can keep more of the money, right? Because Yeah. Understand to date or to so far this conversation we’ve talked about, there is the revenue and there’s the expenses and everything that’s left over arguably is yours, right?

Whether you’re taking it through distribution or payroll, that’s all money you can do stuff with, but you don’t get to keep it. All of that, because some of that is going to go towards taxes. Two things that one should do as an entrepreneur and a gym owner is first of all, make sure that you are taking the legally allowable deductions.

Usually we’re doing this, but sometimes maybe we’re not taking all the ones that we could or should. To be clear, you can go too far on this. You don’t want to be a pirate. You don’t want to start doing, there’s a hilarious like viral Tik TOK video where someone’s, you can legally do board meetings. So just take your family to Disney World and then you can.

Write it off. I’m like, no, that’s actually not the way this works. It doesn’t work like that. So to be clear, I’m not saying put [00:14:00] every single thing, like you’re buying your groceries on your business. Like I’m not saying break the law, but I am saying the tax code is set up, at least in theory, to provide some advantages to people that are contributing the economy and that are starting businesses.

So when there are legally defensible things that you’re legally using for your business, but get some personal use out of, you just want to make sure you’re thoughtful about that and doing that correctly. And again, that’s a CPA thing. So no. Specific advice there other than talk to your CPA to make sure you’re doing that properly related to that.

I think the second longterm wealth building opportunity that you’re going to want to consider is tax advantage retirements accounts, right? And that’s going to look different based on what you have set up your business. There are some. Jim owners that set up 401ks. It’s pretty rare. You don’t tend to see a lot of that.

It’s be pretty sophisticated. Jim usually do that, but at the very least, there are a number of independent retirement accounts with like yearly caps that you can contribute to that will do short taxable income. And that is a great way of reducing your tax liabilities and saving more of that money. Now, of course you are locking up that money for retirement and you may or [00:15:00] may not want to do that based on your short and longterm goals, but it’s at least worth considering.

And then the, I think maybe the most under eliminated element under Uh, appreciate it rather element of keep is just making sure you have adequate amounts of insurance, all kinds of insurance. I think I fit this one is all of this. This is a whole a hard conversation half because I’m so aware of, uh, not being able to give specific advice because your personal circumstances will determine if and what you need to do.

But in practice, I think there’s somebody said for making sure you have the right kinds of insurance, which is another potential threat for your business, even to your family, having some kind of life insurance strategy. Particularly once you have dependents is going to be an important thing to, to loop in your conversation around like long term wealth, although I admit it, I guess it’s less about you and more about your loved ones, which we probably care about.

Yeah, I think you’re really hitting all the most important basics here, Fisher, which is have a CPA or someone who can help talk to you about tax strategy and make sure that you are properly saving for your taxes. It’s a big part of what, of how we have to navigate, [00:16:00] big part of how you build wealth is making sure you’re only paying the exact amount of taxes you need to.

Legally, not much more having a person who will help you do that, I think is critical. We’re saving for retirement, especially with pre tax dollars, huge, having the right insurances. I think you said is also really important. And I think without getting into too much investment stuff, I think the advice I would give is go learn about the kind of investments that interest you genuinely, right?

A lot of folks really get interested in real estate. And there can be a lot of great strategies to grow and save your money in real estate. So go learn about that. Read some books, find some people that you really trust that can be a good mentor for their, for that. If you want to learn about investing with index funds and other financial vehicles, go learn about that.

Go find people that you trust that are doing that, that you can learn from so many other ways beyond. The scope of this podcast, that you can invest and build your own personal wealth, but I think finding those folks that you feel really comfortable following in this space can be hard to [00:17:00] find. And when you do really valuable, I know for sure, there’s a lot of folks, obviously a lot of folks you follow books you’ve read, and a lot of them say a lot of the same things, and some of them are.

Total bullshit. Yeah. Yeah. I’m a big fan of Ramit Sethi. If you’re looking for someone who’s hilariously and unfortunately titled, I will teach you to be rich is actually, I think like a very, if you’re just going to read one, that’s a good one. David box automatic millionaire, I think is also worth a read because everything about money is.

First of all, there’s a lot of emotions involved. So that’s one of the things that makes this like fraud and stressful. Second of all, as an entrepreneur, there’s an inherent amount of like stresses because there’s going to tend to be a little bit more variance usually, or at least potential variants for an entrepreneur than an employee.

And then third of all, it, there is some things to learn, right? There is like some complexity depending on who you talk to. Yeah. And there’s different things you can do. Someone like Ramit, I think would say that a lot of people, uh, It’s one of those things where the, Oh, it’s the Oscar Wilde quote, like all professions are conspiracies [00:18:00] against the layman, where the financial services industry intentionally make it feel very complicated and overwhelming.

So you throw up your hands, I’ll just give you, just somebody take care of it for me. And in practice that can cost you a ton of money. I’m not saying there’s never a place or a time for financial advisor, but they do. Oftentimes they’re charging you a percentage of assets under management, which can have massive Impact on your, uh, long term wealth building.

Like I say, like 1 percent standard assets under management usually means they’ll have taken about 25 percent of what you otherwise would have had when you retire. Now, again, it still can make sense if they can beat that 1 percent regularly. It’s. Not always a can’t always bank. That’s going to happen, particularly with like a typical financial advisor.

So this is not to dissuade you from doing that. That’s the path you want to go. Another pro tip there generally, however, is if you are going to work with a financial advisor, you should just want to make sure they’re at least a fiduciary, which is to say that legally they are bound to do things in your best interest, because even like well intentioned people that are not fiduciaries that make a lot of their money by selling you commission heavy products are usually not going to be.

Not you should at least. [00:19:00] Yeah. You should, I should, you sniff around about that. Have some conversations before you make a final call. If you are going to work with someone. Yeah. 100%. Yeah. I’ll add one more thought here before we wrap things up that I know is, I don’t think it’s represented in our playbook, but I know it’s something you and I care about deeply in our personal lives, which is, I think the big part of.

Building personal wealth, especially when you are partnered up either married or some other or otherwise partnered up is actually having good open communication strategy with your partner. I take that for granted. That’s actually super important. I never think about it because she and I are so like. Go on.

Go on. Same thing with me and Andrew. Yeah. With our spouse, we’ve put a lot of, both of us, I think it put a lot of work in with our spouses to be on the same page about money, including reading books together, having monthly meetings where we talk about our finances, trying to both be, you know, financially literate in some way that we can communicate these things to each other with each other on a regular [00:20:00] basis.

And so I think when that’s not in place, and I see this all the time with gym owners, especially gym owners who are married. And their spouse is also a gym owner and they don’t have great vocabulary about how to talk about money. They don’t have great boundaries when it comes to the business’s wealth versus their own personal wealth.

They maybe have goals for the business’s finances, not for their personal life. And so there’s a lot to navigate there. But I think being in a relationship where you don’t have. healthy dialogue and boundaries about money. And I think all the divorce statistics prove this out decade after decade, that money’s a big reason why a lot of relationships don’t work.

And so I think having just clear communication, I hope, yeah, this is something I hope we can get into more with our members and maybe even in the future. I know we’re planning on doing other more high level groups. I think the intersect with your money goals, I think is pretty critical. I know we’re both on the same page about that.

Yeah. Yeah. And I probably do tend to underrate that. Candidly, she’s just like, do whatever you want. What’s best, baby. That’s one way to do it. [00:21:00] And then it makes it very easy if one of you is just like in charge and you’ve, but even then it’s helpful if you’ve clearly communicated the scope of your, each of your zone of responsibility in the marriage and the partnership, which is not necessarily a marriage, but yeah, but it’s, I probably do underweight that and that’s probably a good point that if you’re listening and you don’t think a lot of people, yeah, sorry, keep going.

I was going to say, it’s probably a good point if you’re listening to this and there’s a little part of you being like, Oh, I don’t think I am. 100 percent on the same page as my spouse as far as what their goals are or how much we should be saving or how much we should be spending or what we should be spending our money on.

That is a very, I think, important thing to work through and get on the same page about. Yeah. And I think a lot of folks, even Rameen, I think I’ve heard Rameen talk about this recommends against having the finance person and the other person being saying, I’m not the finance person. I just trust you. Just do it.

Yeah. They really want it. And you think you said this. At least some degree of communication and consent and that you’re all on the same page about how the money flows through your lives together. And that takes some [00:22:00] work. It’s not always comfortable. People have a lot of hangups about money, understandably.

It’s one of the things we have the longest relationship with in our lives. And so I think that I’ll, I’ll, I’ll wrap up with saying this is another one that I think you could take action on immediately by if you are partnered up having a monthly Or even quarterly meeting with your spouse, where you just talk about the finances, how the money is coming in, how it’s going out, how that makes you feel things you can do differently to tighten up the expenses or et cetera, et cetera.

I think even just to have a container, a set time to talk about money is a really good. First step. Anything else you would add to that? No, I agree. Yeah, I agree. Yeah, it’s an important one. All right, let’s wrap it up there. I feel like we keep talking about money all day long, but hopefully this gives all of you listeners at least some framework for how to get started this conversation with yourself, how to think about building wealth in your business first and how that wealth can translate to your personal life and a few things you can do to start to build that wealth over time.

But if you have more questions, hit us up, go over to Instagram, shoot us a DM. We’re here to [00:23:00] answer your questions. Let us know if you want to talk about this topic a little bit more on the podcast. We’re happy to but thanks for a great conversation Fisher. I’ll see you on the next one. See you soon

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