What if you could save your business thousands of dollars over the next three years? With the additional revenue on hand, what good could you do for your clients, your team, your business and your community? Running a debt-free business can save you money and give you peace of mind, and it isn't as difficult as you might think.
Years ago, my wife and I decided to renovate our 3,000-square-foot facility. We wanted to bring in a designer and architect to create a look and feel that was truly unique. After rounding up all the numbers, it was going to take an investment of $200,000.
We could have taken out a loan, but the interest rate would have led us to spend thousands of dollars more. Instead, we saved up the $200,000 needed over a three-year period. After the renovation was completed, when the last worker walked out of our facility, we wrote the last check. We had no more payments, our business was completely debt-free, and we saved thousands of dollars in interest. We delayed gratification, which is what we preach to our clients. We set aside short-term, instant fulfillment for the long-term benefits of taking small daily steps. Other club owners can do the same.
Running a debt-free business can be the biggest key to your sustained success. Why? You don't have to worry about making enough money to cover monthly debt payments. You can make business decisions based on your clients' and team's needs without having to worry if they will compromise paying off the lender. You can focus 100 percent on growing your business because nobody else is calling the shots when it comes to where your profits are spent.
But how do you get started running a debt-free business? We paid off more than $200,000 of debt in two years by following a simple plan laid out by financial guru Dave Ramsey in his book "The Total Money Makeover."
Start with one small step. Write down all your expenses on a piece of paper, everything from debt to monthly rent to the light bill. Try listing the payments from biggest to smallest. Create a simple list that you can refer to on a daily and monthly basis to stay on track, and spend every dollar on paper first. Tell your money what you are going to do with it, besides reacting to incoming payments.
Then start paying off the smallest debts, making minimum payment on everything else. Once the smallest debt is paid off, you can take that payment and apply it to the next debt. From there, you can see how quickly additional funds can add up.
The benefits of running a debt-free business are more than financial. You don't have to run specials to get people in the door to make the additional funds to pay your loans. Simply do what you do best: Serve your clients to create raving fans who want to tell their family and friends about their experience. Running a debt-free business also allows club operators to invest in personal and team development. With the money you save, you can pay for trips, rewards and conferences and continuing education.
At a time when the economy is tough and our health is deteriorating, taking the small steps to run a debt-free business is very empowering. It is comforting to know you can keep your doors open to help people become better versions of themselves.
Brent Gallagher is co-owner of West U Fitness in Houston with his wife, Cassie. He can be reached at [email protected].