So how many of you can truly say you put the time and effort into financial planning and reporting? Some 86% of personal trainers we interviewed cited financial reasons for their decision to leave the industry, yet only 16% admitted they had ever done a financial forecast…
There are two financial factors you need to consider when it comes to the running a personal training business: financial reporting and financial forecasting.
Reporting: Assuming you are running a self-employed business, you should have an accountant. They will often have their own way of doing things and will want you to report your finances so they can file your end of year tax return and keep you out of trouble with HMRC! You have two options with reporting, use a spreadsheet or use a piece of software. Like I said your accountant will have their preference and it is often easiest to go with what they use as it will make transferring information from you to them far easier. However my favorite for running a PT business is FreeAgent (www.freeagent.com), it is a simple, online accounting system that will allow you to upload all your receipts, send client receipts and export the simple reports you will need. There are more complex products on the market like Sage and Xero but for what you will need as a PT FreeAgent gives you what you will need without being overkill.
Most PTs, one way or another, will have a way of tracking their income and expenditure – something you have to do if you are self-employed. FreeAgent just makes this process as simple as possible and keeps you on the gym floor not stuck in admin, however the majority of PTS whom I have met often give little focus on financial forecasting.
Forecasting: reporting is something you have to do, forecasting is something you really should do! I can’t even count the amount of PTs I have seen trying to ‘set up a business’ without knowing the most obvious numbers such as how many sessions they need to deliver to live their life and how much it will cost to achieve their target. Although there are again loads of bits of software you can use, a PT business should not be a complex one to plan and I have found simply using excel is the best way to forecast. You should always be looking at least 12 months ahead and planning both your income and expenditure which will help you to see a number of things…..
- How many sessions you need to deliver
- How much expendable income you will have after you complete your target number of sessions
- How much you will need to invest in setting up your business
- What fixed costs you can afford to take on
Plus obviously loads more….
Many of forecasting documents you will find will be far too complex for what you require so we have created a nice simple one to help you make a start in financial forecasting. Click on the link below to get started…
This quick blog is only the beginning to the financial info required for any PT. But may be the first and most important decision you need to make, is whether to employ an accountant or not… In my view it is the best money you will ever spend on your business because you have enough to think about without the additional worry of how to manage your cash flow and keeping on top of your accounts!