Functional Training Zones

Learn More from My 5 Fitness Business Mistakes than All My Successes

Bill Parisi

By: Bill Parisi, Founder & CEO, Parisi Speed Schools

After being in the fitness industry for as long as I have, I have heard pretty much every question in the book. The one, however, that I get more than any other is this…"What makes you so successful?"  People always want to learn from someone's success. I am here to tell you that you will learn more from an individuals failures, than from their success. Since I started my business over 20 years ago, I have made my share of mistakes but there are five that I believe can derail a business faster than all the rest. The key is that I learned from every one of them and it only made my business stronger, and me a better leader. 

1. Not Being a Master Communicator with Your Staff

First off, you have to master the interview process. A bad hire can cost your company up to 24 times the person's salary according to Brad Smart in his book TopGrading. Your interview process matters a lot, so you really need to master it. One of the most important questions to ask potential hires is for them to share how their previous supervisor would describe their biggest weaknesses and strengths. Then make sure they know that you will be calling their previous supervisor to ask them the same question. This will get your candidates to speak with a lot more candor.

You also need to perform background checks on anyone you are about to hire. This is critical before you pull the trigger. You never know. In addition, you should require non-compete agreements in states that allow them. If non-compete agreements are not allowed have at least a non-disclosure agreement. In addition, I require all our franchisees to enforce a reimbursement contract. This is a financial reimbursement agreement back to the business if the new hire does not last for two years. We spend a lot of time and money educating new hires. If they leave within two years they need to pay for that education. Remember that this is a business. As much as you may want to, you can't save everyone. If someone's not a good fit you're doing him or her a favor by parting ways. So take long to hire, and be quick to fire.

2. Not knowing your numbers

Another common mistake—and I'm going to keep saying this—is not knowing your numbers. If you don't understand your financial situation; if you underestimate how much things really cost or how long they take … you're pretty much doomed to fail. Or at least tread a lot of water. Running a successful business is a numbers game. So get to know them. Make them your friend and ally. Make sure that you learn basic accounting and never let just one person manage your numbers if it is not the sole business owner. I have seen siblings, marriages and best friends get into disagreements, fudge numbers or outright steal from one another. I am sure you heard many horror stories as well. You cannot trust anyone completely with the numbers of your own business except yourself.  You need to know them enough to be able to understand them. This is a business imperative for all business owners.

3. Not Appreciating the Importance of a Back Office

Speaking of numbers … another common mistake—number three on today's hit list of what not to do—is not appreciating the importance of a real back office and the power of having a designated collections and payables person. This is especially important when you have more than one location. The value of having the right software, picking the best vendors, consultants, and partners cannot be overstated. One strategy I have followed was to always pay my venders early or on time, at the latest. On time for me would be late. By paying early, a level of trust is built up and it is something your vendors appreciate. The reason is, if cash flow ever gets tight and you need some slack, you now have an open and trustworthy relationship with your vendors. Chances are, they will cut you some slack and help you out when you need it and give you some extra time to pay your open invoices.

4. Letting Success Go to Your Head

And fourth … being successful at one aspect of your business does not automatically make you successful in other areas. This kind of hubris and self-deception has led to the downfall of more enterprises than I can count. Don't let success go to your head. Remember … when you start making real money—an entirely new set of challenges occurs. Employees are all on board in the beginning. When the business is new, they are excited to work extra hard to help get the business off the ground. But when the business is successful and making money, they expect more. This is why is it critical to have preset compensation and bonus plans in place that lay out their growth as the business grows. I cannot stress enough how important it is to have job descriptions, bi- annual employee reviews and detailed compensation plans mapped out. This is something that has to be looked at and reevaluated every year without fail. This tells your employees you take your business and them seriously.

Also, despite how confident you might feel, or how much money you are making, you can never be over capitalized. There's definitely such a thing as too much risk. Don't get greedy. Come up with an income that makes you happy and then set a course that allows you to grow slowly from there. Most importantly, take whatever profit you can from the business and start a 401k for your company. Reward yourself and your employees with a retirement matching program. This is a great way to keep employees on board and take care of your own retirement fund.

5. Not Identifying What's Really Important

The fifth mistake people often make – and this applies to almost everyone – is losing sight of what's important in life. You have to ask yourself—on a regular basis—what's more valuable to you? Time or money? You can always make more money but you cannot make more time … you only have a limited supply. This changed for me when my kids reached the ages of 8 and 10. Being around them was more important than making more money. When I did not have kids and when my kids were very young, a 14-hour day was the norm. Now I pulled back to 8 to 10 hours on average.

So know your limits. Remember your kids are only young once. You're only young once. If you skip YOU time and fail to meet your individual needs … what's it all worth in the end? Keep your priorities straight. Respect them. Balance them. It's like with too much physical training….You'll burn yourself out.

Well, I gave you the plan, but I can't make you act on it. You can read and research all of things that you should do to run a great business but when the rubber meets the road, you need to simply EXECUTE. Hopefully this article helped to provide a basic for your business success but it is not worth much if you do not follow it.

For more information check out parisischool.com/businessopportunity   

(June 2015)