Running a successful fitness business is about more than bringing in revenue. Gym owners also need to manage their cash flow, pay themselves properly, and build a business that can support their long-term goals. In this Fitness Marketing Agency podcast episode, Ben speaks with Duncan Lloyd from Profit Genie about how a profit-first approach can change the way gym owners manage their finances, increase profitability, and build long-term business value.
The Challenge
Before working with Duncan, Ben had experienced the frustrations of working with accountants who focused mainly on tax returns and financial paperwork rather than providing proactive business advice.
He explained that he often had to chase his accountant to arrange meetings and ask questions, without getting the support he needed to make better business decisions.
After discovering Duncan during COVID, Ben began looking at his business finances differently. Duncan’s approach changed how he operated his company and influenced the wider Fitness Marketing Agency community.
One of the biggest issues they identified among gym owners was the struggle to make enough money from their businesses. Some owners were taking home just £2,000 or £3,000 per month, leaving them under pressure to cover household expenses while continuing to run their gyms.
Cash flow was another major concern. When all the business’s money sits in one bank account, it can be difficult to understand how much is genuinely available to spend. A healthy-looking balance can quickly disappear after a large purchase or payment, leaving business owners worried about making payroll.
As Duncan explained, this creates an unnecessary distraction from the activities that actually help a business grow.
The Strategy
1. Putting profit first
Duncan introduced Ben to the Profit First methodology, a cash management system designed to make profitability a priority rather than something business owners hope to achieve at the end of the month.
The approach involves using five separate bank accounts: income, profit, operating expenses, taxes, and owners’ pay.
Money is allocated to these accounts at agreed percentages and regular intervals. Profit is set aside first, alongside money for tax and the owner’s salary, with the remaining balance used to cover operating expenses.
Rather than relying on whatever happens to be left in the bank account, the system creates a more deliberate approach to managing money.
As Duncan explained, the goal is to make sure the business can meet its obligations while building a consistent profit reserve.
2. Reviewing pricing and profitability
Duncan also highlighted the importance of reviewing pricing instead of relying on what other gyms in the local area charge.
Many gym owners worry about increasing their rates, particularly for long-standing members who supported them through difficult periods. Others are concerned that charging more than competitors will make it harder to attract new members.
Duncan acknowledged these concerns but explained that pricing decisions should be based on the financial needs and goals of the business.
His approach involves modelling potential price increases, considering possible membership cancellations and calculating how many members a gym could afford to lose before the change negatively affected revenue.
He also looks beyond pricing to understand the wider business, including membership structures, trial periods, conversion rates, customer acquisition and churn.
This gives gym owners a clearer picture of what they need to achieve each month to reach their profitability goals.
3. Focusing on business growth rather than cost-cutting alone
Another important lesson was that reducing expenses is not enough to build a profitable business.
Duncan encourages business owners to examine their pricing, productivity, profit margins and costs together. The objective is to improve the commercial performance of the business rather than simply spending less.
He also explained why avoiding growth to remain below a tax threshold can be counterproductive. While tax planning remains important, it should not prevent gym owners from developing their teams, improving their services or investing in their businesses.
For Duncan, building a strong company means creating something that can operate successfully beyond the owner’s day-to-day involvement.
4. Introducing accountability and regular financial reviews
Duncan’s approach is built around three pillars: accurate financial data, accountability and cash flow management.
Regular meetings with clients help them understand their numbers, identify problems and make decisions based on what is actually happening in the business.
This is more than simply producing financial reports. It involves asking difficult questions, reviewing progress and helping business owners stay accountable for their goals.
By combining financial information with regular guidance, gym owners can make more informed decisions about staffing, pricing, investment and future growth.
5. Building a business with long-term value
The conversation also explored the importance of preparing a gym for a potential future sale.
Duncan explained that he works with clients as though they intend to sell their businesses, even when that is not their immediate goal. This encourages owners to maintain sound financial records, build reliable systems and demonstrate consistent performance.
A business that pays its owner properly, generates predictable cash flow and operates with an effective team is better positioned to demonstrate its value to a potential buyer.
The Results
Ben’s experience demonstrates how changing the way a business owner thinks about money can influence both business decisions and personal financial confidence.
The key takeaways from the conversation include:
A more deliberate approach to profit: The Profit First system helps business owners allocate money regularly rather than relying on whatever remains after expenses.
Greater visibility over cash flow: Separate accounts make it easier to understand what money is available for operating costs, tax, owner payments and profit.
More informed pricing decisions: Reviewing membership prices and modelling potential changes helps owners make decisions based on business performance rather than fear of losing members.
A stronger focus on commercial performance: Pricing, productivity, margins and costs all contribute to building a more profitable gym.
A clearer approach to owner remuneration: Duncan recommends paying the owner a proper salary before treating profit distributions as additional rewards.
Better preparation for future opportunities: Consistent profitability and reliable financial systems can help build business value over time.
Duncan also shared a benchmark for gym owners to consider. He described a 10% profit margin as a good target after the owner has been paid a proper commercial salary, with 20% representing an excellent level of profitability.
These figures are guidelines discussed in the episode, rather than guaranteed outcomes. The appropriate targets will depend on each business’s circumstances.
Words From Ben And Duncan
Ben described the impact Duncan had made on his approach to running a business:
“I found you in Covid and we became a client of yours. And you’ve changed how we operate as a business.”
He also explained that learning to manage profit more deliberately had changed his outlook on business finances.
Duncan reinforced the importance of taking control of profitability rather than waiting for money to be left over:
“You can’t cut your way to profitability.”
His message was clear: business owners need to focus on delivering a valuable service, charging appropriately and managing their finances intentionally.
What’s Next?
For gym owners, building a profitable business is an ongoing process rather than a one-off financial exercise.
Duncan explained that improving profitability through the Profit First approach can take place over several quarters. For example, a business might gradually increase the percentage of revenue allocated to profit as its financial position improves.
The wider goal is to create a company that can pay its owner properly, generate additional profit and build long-term value.
The discussion also highlighted the importance of planning for retirement. Duncan encouraged gym owners to develop a regular savings habit and consider professional financial advice as part of their longer-term plans.
Ultimately, the focus is on creating a business that supports the owner’s life rather than one that creates constant financial stress.
Ready To Scale Your Gym?
Ready to improve your sales confidence, eliminate objections, and attract premium clients who stay longer and pay more? 👉 Book a call with FMA and let’s level up your business.