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In Two-Brain Business 2.0, I wrote:   “Good debt creates an asset. Bad debt creates a liability.”   I was talking about investment. But now I want to talk about the myth that you should avoid all debt, or make paying off your loans your top priority.   This myth is on heavy rotation among affiliate owners. I don’t recall Greg ever saying “Don’t go into debt” (but he might have)–his advice was to smart small, outgrow your space, and then get a bit bigger. This means minimizing what’s owed to other people, and it makes perfect sense.   I come from farmers who pay for everything in cash. They didn’t have debt; they thought borrowing money was an unnecessary risk. Many farmers would agree.   And so, when I found myself in a cash flow crisis in 2010, I spent a very tough few months. I went without sleep; I fought with my wife; I went to the gym when I didn’t have to because I didn’t want to miss any opportunity to make money. I cut staff costs. I even cut our own pay.   Then I got hit with the perfect financial storm: a tax bill I didn’t expect. A large refund to a client that I shouldn’t have given (but didn’t have any sort of policy to the alternative). And a huge power bill finally tipped the scales: I couldn’t afford to skip another paycheck, but I couldn’t pay the rent either.   I called the bank and asked to refinance my loan. I was ashamed. I was embarrassed. I felt like a failure.   She said, “Oh, you mean a cash flow loan? Yeah, everyone does that.”   Everyone does that.   Except the voice in my head.   I refinanced the balance on a couple of loans. I had two years left on each, but at the rate I was going, I wouldn’t have ...

How do we measure business success?   For CrossFit coaches, measuring fitness is easy: it’s improved capacity across broad time and modal domains (the ten elements). Are you getting stronger, faster or more flexible? Your fitness is improving. But until Greg created a formal definition of fitness, we were unable to measure the effect of our training. It seems funny to say now, but until CrossFit, we were all selling a moving target.   Likewise, business success must be reduced to its core elements before it can be measured. The intangibles–helping our clients, saving lives, reducing body fat and associated health risks–these are the elements of coaching, not business. I’ll wait for someone else to make “good coaching” measurable, observable and repeatable in more than an empirical form.   My job is to make gyms profitable. And that means starting with a simple definition of success.   Your idea of success is different from mine. After 22 years of coaching, I’m no longer jumping for joy at the 5am class. But we can all agree that financial success is measured by profit, and lifestyle success is measured by choice: the freedom to choose how we spend our time.   With those two variables in mind, the master equation for success in any single business is this:     $ (profit) over T (time).   I’ve written extensively about valuing your time, moving to high-value roles in your business, and even the “retirement” point, where your business runs autonomously. There are many different variations of business success, but my role as mentor is to get each entrepreneur to their “Perfect day”. Let’s consider three sample cases. Each of these was recently on a call with me to discuss the path to better business.   Case #1: $1,000,000 gross revenue; 10% profit margin; 12-hour workday (plus Saturday) Case #2: $600,000 gross revenue; 25% profit margin; 12-hour workday (weekends off) Case #3: $300,000 ...