Creating A Succesful Personal Training Business Part 4: Achieving Your Dreams

Achieving Your dreams

-3 Action Steps-

1) Develop Autonomy

A) This week partake in 1 activity that you were directly in control of. It can be as easy as taking a walk on that new beach or forest you've been thinking about. Bonus, walking in nature is really good for you too. You could set a boundary in a relationship that was not being well respected by the other party. You could take that next step to get out of debt. 

2) Develop Competence

A) Within the next 3 days practice something you love and engage in deep practice. Deep Practice is a repetitive, engaged practice where your attention is focused only on the task at hand. No cell phones, no disturbances. Tap into a flow state if possible 

3) Develop Relatedness

A) Within the next 5 days introduce yourself to two new people, or reach out and expand your network. You can also work on bettering a relationship that hasn’t been working out exactly as you would like.

With this new knowledge of what motivates you as a person, I believe you can go on to achieve and fulfill the best you. Chase competence in all that you do, transcend normalcy and be your best self. Life moves quickly and every moment is precious.

Psychological Resilience

Grit may be one of the single biggest factors in manifesting success in your life. Coined by Angela Duckworth at UPEN it can be easily said the gritty people are better at doing what they want in this life. Even in the face of massive adversity how can you take the hero’s journey?

Now I’ve been observing a lot of anxiety and stress during this pandemic. It’s a virus not to be taken lightly. Many people will die and it will throw us into a lot of uncertainty. These things we know, there’s no changing this. We can personally mediate the spread, but these are largely out of our control. 

Saying this, how can we remain rationally optimistic during this time? What are the lessons to be learned? How can we grow? How can we grind our way to success?

Eastern philosophy shows us yin and yang, for every certain thing in life, there is an opposite yet interconnected dichotomy. For every bull market, there’s a bear. For peace, there was war. During a crisis, there is growth. 

Now that we’re being forced to isolate, instead of just seeing the negatives of this uncontrollable situation, how can we find the greater good? How can we grow? As an extroverted person who is uncomfortable with the lack of social connection, how can you explore introversion and the introspection that can come with it?

Finding the silver linings in challenging situations is the hallmark of a gritty person. Even better if you find yourself invigorated with the chips fall out of your favor.

As an introverted person, this situation is tapping into my natural state of being; and it’s deeply relaxing and brings to mind the topic of margins. Instead of focusing on the negative burden that this pandemic has placed upon us, how can I make the choice to be gritty in the face of adversity?

Let’s talk about margins. In business, your margins are essentially how efficient your product is at making money. A product with low margins will, generally, not make a successful business unless the scale is massive. Even then, it may seem like the juice isn’t worth the squeeze. Would you rather be making 10$ an hour or 100$, margins are great at figuring out how to get more with less. 

Now, this doesn’t just have to apply to finances, margins exist everywhere and in everything you do. From a big picture, perspective let’s define margins as the effort and time of the energy used to accomplish a task. Margins = Effort+Time.

Something that took a lot of effort and time with little reward would be a task that had low margins. Something that took a lot of effort and time with massive reward would have good margins. Something that took only a little effort and time and still had a massive reward has great margins.

When you start your personal training career at a box gym you are expected to do two floor shifts at opposite times of the day. Let's say 6am-11am and 4pm-9pm. While you may not be working the whole time you are away from your home and doing something related to work.

The second you leave your house until the second you get home and stop thinking about work you should consider yourself working, even if unpaid.  

If you’re out the door at 5:20 am and back at home at 10:20 pm you are working a 17 hour day only while making, let's say, 20$ per client hour. $80/17hrs= $4.7 per hour. These are awful and below poverty level margins. If you’re working at a gym and making 10$ an hour for your floor shifts let’s add $80 to that. $160/17hrs= $9.4 per hour. Once more, terrible margins.

If you have a client at 6 am and then 6 pm, this is a very low margin activity, but it has the potential to turn into a high margin activity. So the juice, while initially is not, may be worth the squeeze in the long run. Although you want to expedite the low margin process as quickly as humanly possible.

Another example of margins is the gross versus net profit from your client hour. If you are charging $150 an hour at a gym and only making $20 an hour your margin for that activity is 13% with the gym taking around 87% of your labor. That’s a lot of money. Now you may ask yourself how can I raise my margins and be more efficient?

The gym usually takes this money for a good reason. Running a business is hard, and not cheap - and if it was so easy, why aren’t you doing it? The issue that needs to be mediated here is if they are dropping the ball on any of the operational tasks (sales, marketing, working environment), then their margins must go down. This can be one of the first steps to figuring out if you need to go independent or switch jobs as discussed in later chapters. 

Knowing when to be gritty means you must know your margins. It is much easier to know when to persevere in the face of adversity when the juice is worth the squeeze. Without a solid foundation and knowledge of your margins, you will not know when to employ grit and when to cut ties or shift laterally into something else.

During this time of forced isolation, would it be interesting to reflect on what your personal margins are? Are you spending your time focusing on things that have a good return on the energy used? Is the juice not worth the squeeze on anything in your life? How efficient are you being towards accomplishing your personally selected dream? 

This topic, in terms of business, is why a lot of people choose to invest in cash-flowing real estate. If your goal in life is to make good money,(Gasp! Talking about monetary success), while not trading massive amounts of your personal time, margins become a very good topic to explore. When you work for someone else or when your business has low margins, you might be making good money, but you might not be very efficient with your time and effort.

Real estate and index funds are a great way to combat this paradox and a good example of something with the potential for ideal margins. The gold standard of efficiency and high margins activities is “passive income”. Something that pays you out with zero time and effort involved like an index fund with a withdrawal rate of about 4%. This is a very common theme in the financial freedom communities and most people would be well served at adopting this mindset. 

In real estate, after the initial time and energy investment with your due diligence, and then the hiring and delegating of the managerial tasks effectively, you have money that is coming in relatively passively. 

This plays out as such: Initial due diligence = 30 hours; Month 1 = 2.5 hours, Month 2 = 1.25 hours, Month 3 = 0 hours, Month 4 = 0 hours; so on and so forth until interaction with the business entity is required. 

So, let’s say your rental nets $500 per month. Month one = $14/hour, Month 2 = $200/hour, Month 3 = $333/hour, Month 4 = $500/hour; so on and so forth until interaction with the business is needed. In terms of grit, the initial due diligence may be massively inefficient and challenging in terms of the time and energy used, but you know in the long term that the business entity will throw off net profits that would be near impossible to make from any sort of job. 

So now that your margins are high, instead of being bogged down by menial tasks that are essential to survive, you can now explore the new exciting dreams that you naturally gravitate to. You can have more time to spend with your family. More time to pursue your passions. More time to kick back and enjoy life. More time to grow and become the person you’ve always envisioned. With this virus, we’ve all been forced to face our own mortality, so living a life that expresses your own wants, needs, and dreams should be of top priority. Our time is limited, make sure you’re using it wisely. 

Asymmetrical Risk Reward 

Asymmetrical Risk reward is a term I like to use and has application, like many others, in business and life. One could also think of it as starting small. When making decisions we are all faced with the benefits of making the decision versus the potential risk. This can apply when going on a first date to deciding to take on venture capital money, or whether to drop into that 20-foot wave. Using critical thinking to calculate the potential risk can be one of the most beneficial skills you can develop as a human. 

Calculating risk. A wise person once told me to never invest money you aren't willing to lose. Risk doesn’t have to always be monetary. There is a risk when getting into a relationship. There is a risk when trying a new skill. Humans are constantly mitigating risks and coming to conclusions based on this formula. It’s pretty neat!

Your Pros And Cons List

The very basics of risk management are self-preservation, whether death or financial stability. Some questions to think about on the cons side: Will I survive? Do I have the skillset? What is the chance that it goes wrong, what can I do to keep it from going wrong, what variables could lead to my failure?

On the pro’s side: What are the benefits for completion? Will my return on investment suit my criteria for success? Will it be worth my time? What will I learn from this?

For me, when making the decision to start my business my thought process was as such.

Pro: You are young, don’t even try to live a more conventional life until you have more conventional values; family, mortgage, typical middle-class dreams. I don’t have those dreams. I want to remain childless until my late 30s and I knew I wanted to run a successful business before even thinking about starting a family.

Pro: I have tax advantages that would allow me to make more money in half the time.

Pro: I won’t answer to anyone except myself and my clients.

Pro: I have substantial autonomy and control. This is all on me. My success is my responsibility.

Pro: this business has little to no overhead. All I need to do is pay for gas and food. Even if that food is one whole chicken and fat-free chocolate milk!

Pro: I can switch my client base to work with some of the top entrepreneurs and executives and get paid to learn from them.

Pro: I can surround myself with other like-minded people.

Con: You don’t have any place to live. Sure, but I don’t right now either!

Con: You could not be successful. Okay, captain state the obvious, but is that really going to prevent me from trying?

Con: It’s the unknown! Yes, but look at how many things I’m going to learn.

In my case, I saw transitioning from a brief stint at a commercial gym to bridging out on my own as not a huge jump but a small step in terms of risk mitigation. I had nothing to lose, except my ego; which who cares! Now if I was overleveraged, say financially and under different circumstances, I would have chosen otherwise. Some examples where this risk wouldn’t have been asymmetric. If I had excessive financial obligations. If I had a family to support. 

An example of me saying something is too risky because of too many cons:

A potential business partner came to me wanting me to help co-found and subsequently invest in a new gym, $100,000 to be exact. I am always open to entertaining investment ideas, and building businesses.

After meeting a couple of times I got a good understanding of the pitch. After being initially very excited, I backed off tremendously when shown the business strategy in detail.

Pro: Start something new, needed, novel, and with a good mission.

Pro: I personally liked the owner.

Pro: Attractive location.

Pro: Top-of-the-line equipment. 

Pro: Well funded…but not smartly funded. So 50/50.

Now, this sounds like all great things, but unfortunately, when looking at potential new business ventures you must be able to see the forest through the trees. These were attractive small details that appeal to my feelings, but the big picture logic did not make sense. 

Con: Massive overhead that seemed almost impossible to meet under even the best circumstances

Con: Not smartly funded.

Con: Asking for way too much money for the potential return on investment.

While these were only three cons, the length of the pros and cons does not matter. It is the weight behind the principles that matter. Particularly finances.

While I don’t care if someone has a business background to be good at business, I understand the need for some people to need direct education in certain fields. The picture that was being painted quickly was that the owner did not value or understand the value of a dollar.

My main deciding factor for any sort of business venture is predominantly financial. Wherein understanding risk in my extreme sports field is predominantly based on my safety. 

Big Picture Deal Killer Con: Doesn’t know the value of a dollar and I can’t work with someone like that.

This trial and error experimentation can occur within your head before the activity can actually take place and it’s a good idea to properly assess risk before any amount of effort is put into the task at hand.

Asymmetrical risk-reward is essentially making sure the old school scale weights are evenly balanced. You want to make sure that before you make a decision the pros evenly weigh out the cons, or even better yet there are no cons to this decision-making process.

While every failure is an opportunity for growth, I feel we can skew ourselves for success and keep from potentially having to learn the hard way. Especially when the hard way can mean financial ruin or even death in my sports like mountain biking, surfing, and freedive spearfishing.

Your risk tolerance is personally mediated by your own specific values and needs as well. So something that seems risky to others, you may not feel the activity carries as much risk. For instance, when starting my business a fellow trainer came up to me and said I was very brave. I do not see myself as an inherently brave person, I just see my risk tolerance as being much different than others.

Developing an understanding of what your unique values are in life will allow you to come to quick decisions that align with your unique wants and needs.

A business venture that made me a little more uneasy was buying my first rental property.

This is where the boundaries for my own personal risk tolerance were pushed. 

First off, I only like business ventures and any risky activity to be a slam dunk of sorts. Highly lucrative with little to no risk involved. I am not a prolific person making broad investments. I am a selective entrepreneur. A great white compared to a fox. One eats once every couple of months because the payout is so large. The other eats constantly. Both are nourished and live to see another day.

After you have an emergency fund of 6 months saved up, a tax-deferred index fund, and spending money set aside (you don’t want all your money to sit in a savings account being depreciated by inflation).  When you have these metrics achieved, you’re ready to take on more risky investments.

I wanted to build passive income because my business is a service business and I can only get paid with me showing up and doing the service. One thing you’ll hear the rich say is to not trade your time for money. A relatively safe passive income stream in real estate will give you about a 5% yearly return on your investment. Standard cash on cash return is around 9% and an index fund is 7% but needs to be compounded over a 20 year period. Side note, compound interest is like magic. You let your money sit and it grows. How much or how little headache you would like depends generally on how risky the investment is.

For this investment, I wanted passive income to give me more financial freedom and started a research period of over 3 years. I knew my metrics for success and I knew the amount of energy I was willing to expend on this investment. My priorities and values were crystal clear, and so I sat and waited, for years. Treading water like a great white would.

An opportunity popped up in an out-of-state area for a potential good property.

Pro: Huge returns

Pro: Passive income

Pro: Tax advantages

Cons: Out of state

Pro: Remodel Needed

Cons: Risky economic factors

Cons: Could lose all initial capital if economy tanks

Con: Hiring a property manager

Con: Remote communication 

Normally this would seem pretty one-sided in favor of not making the investment but once more it depends on the weight of each con and the nuance involved. Usually, this kind of investment is unwise, or just a short-term investment. Make your money and leave before a bust, but I saw the nuance so that risk was mediated to an acceptable level of risk.

Remote communication is a great way to work on effectively managing, delegating, and hiring the right person, which will serve me well for my future businesses.

Potentially losing all that money was worth it to me, once more, I was not overleveraged financially in my life and had nothing to lose but my pride. Did I work hard for that money? Sure, but I was willing to risk it if it meant chasing my dream.

Since the purchase of that property, it has been relatively passive. Maybe 5 hours put into worrying about it. So far the cash on cash return has been near 30% 3 times more than average, leading to a relatively passive return on investment of about 30% or around 6 times more than average, and in 30 years I will have many times more my initial investment; increasing my net worth by multiples. So the risk was worth the reward, and if it all went up in flames the lessons learned and knowledge gained would be worth the risk.

So make sure you understand risk and how much your willing to, and can afford, to risk. You can safely chase your dream, just make sure there’s some keen foresight and planning that occurs beforehand!