This is Pete Moore, Halo Academy. We are here for another two minute drill. We're gonna talk about expenses. The prior one, we just talked about revenue. That's all the money that is coming into your business. Now we gotta talk about what does it cost to generate that revenue. Alright. The first thing I need is I need people. Right? So I got expenses on payroll and labor. The next thing I gotta do is I gotta find out a place where everyone can work. If I'm a
health club operator, I'm paying rent. I'm also paying something called CAM, which is my common area charges that are gonna show up on maintenance back to the landlord on a monthly or annual basis. Okay? So I've got my total rent. I've got my total lease payments. After that, I've got utilities. Gotta turn on the water, gotta put on the electricity, and I gotta make sure that I have this place staffed properly. And I also need to make sure that I got HVAC units, which
is heating, ventilation, air conditioning. There you go. We gotta make sure this place is well stocked and presentable for all of our members. What do we have to do after that? Well, we've got supplies. We got a pro shop. We've got equipment. Okay? We've got TRX. We've got supplies that break down and things that we need to fix. All these things go into our expenses. I've got some treadmills down. That's a maintenance expense. Okay? I've got trucks that are going around and
they are dropping off supplements. Okay? They're moving equipment around. These are all going into my expenses that allow me to generate the revenue. In addition, you're the owner of the business. You are entitled to get paid as the owner of the business. Therefore, I've got owner salary. I've got guaranteed payments. I've also got other people in my company that may be related to me. All those people are expenses of the business and will help us generate what is called operating profit.