I lost thousands of dollars running fitness competitions.
But I didn’t realize it at the time.
As a new gym owner, this was my plan:
Run a fitness competition, do all the planning and organization myself, ask for volunteer support, and make a few thousand dollars.
I saw this as a path to pure profit.
We did sell out most events, and we did end up with a little profit after we subtracted the cost of prizes and a few other things.
But I left labor out of my calculations.
I’m forever grateful to the volunteers who helped with scoring, judging and other duties. Most events—in any realm—succeed with a lot of volunteer help, and organizers would do well to over-thank the people who donate time out of the goodness of their hearts.
But I’m embarrassed to say my staff members also donated time. And I definitely didn’t account for my own hours—probably over 100 in any event.
If I go back and pay all those hours out at a too-low rate of $20, every single event would have actually cost me a lot of money.
Let’s be clear: If you don’t account for staff and owner time, you aren’t really running a business. You and your staff are volunteering. You’ve all got an expensive, time-sucking hobby that involves hosting fitness competitions.
I Can’t Believe I Missed This
The situation gets worse if I think about all the things my staff and I could have done with the time we spent volunteering at events we thought we were running for profit.
Let’s say we all spent 200 hours total putting on one event.
What if I had devoted 50 hours to using Affinity Marketing tactics to generate personal training without spending money on advertising? I bet I could have sold 150 hours of PT at the too-low 2009 rate of $50 an hour. That’s $7,500 gross.
From that, I could have paid out 4/9ths to cover service delivery, leaving $4,200. If I had used that remainder to pay myself for the 50 hours it took to sell the PT sessions, I would have made $84 an hour. or I could have paid myself $50 an hour ($2,500), leaving he gym with $1,700 of real profit.
In the end, I would have earned more, my coaches would have earned more, the gym would have been in better financial shape, we all would have had more energy to serve clients, and our clients would have had more access to top-shelf one-on-one coaching.
Oops.
Do This Instead
If you’ve ever gone down this path—or if you’re considering running your own event, do the math ahead of time and be sure to account for all the hours you and your staff will spend on it.
If you do, you might consider passing on the event and using those hours to generate real income with less drag. Or you might just cancel the event to get more sleep or spend more time with your kids.
If you choose to reallocate those unpaid event hours to actually growing your business, this is the key question: “How can I generate real income with less drag?”
Well, you could partner with a local event and run a prep course for participants. The time commitment there might be 20 hours at a great rate.
If you’re interested in that path, check out Chris Cooper’s exact instructions:
Whatever you do, don’t forget to consider the value of your time whenever you’re making any plans.
Remember: Your time is finite. To succeed as an entrepreneur, you need to spend it on the things that will generate the greatest return.
