Mastering Your Studio’s Finances with Sue Ellen Brantley

In this episode , I'm joined by a CPA and fractional CFO who specializes in helping boutique fitness studio owners , just like you , to thrive . We'll be breaking down the most common financial mistakes that studio owners make , the best practices for keeping your books in order , and how to use your numbers to make smarter business decisions .

Trust me , this is an episode that you can't afford to miss , literally , so grab your notebook and let's get into it . Well , hi there , I'm Saren Glanfield . I'm a business and marketing strategist just for boutique fitness studio owners like you . If you're ready to be inspired and make a bigger impact , you're in the right place .

All you need are a few key strategies , the right mindset and some support along the way . Join me as I share the real-life insights that will help you grow a sustainable and profitable studio . This is the Pilates Business Podcast . Welcome back to the Pilates Business Podcast .

I'm Sarah Glanfield and I'm so glad that you're here with me today , because we're talking about a really super fun topic .

I promise and it's something that I know that many of us kind of perhaps find and feel a little bit of some roadblocks , some challenges around , and that topic is the topic of numbers , and I'm really lucky to know a lot of different folks in this industry , and when I come across people who I think you guys would really benefit from listening to , I always

invite them onto the show . And today I'm welcoming Sue Ellen Brantley from Healthy Balance Bookkeeping to share with us her insights and knowledge when it comes to the numbers within your boutique fitness studio business .

Now Sue Ellen is a CPA , a fractional CFO we're going to talk a bit more about what that is in a moment and a bookkeeper , and she is on the same mission as us to help make the world a healthier and happier place .

She spent over 15 years working as a corporate account executive within a large conglomerate in the accounting and finance department , so she knows her way around numbers .

But she wanted her work to matter and so she opened Healthy Balance Bookkeeping just last year to be able to support studio owners and wellness practices just like yours , to make more money and to expand in your community and to grow . So welcome Sue . Ellen , I'm so glad you're here . Thank you , I'm excited to be here . So why don't we kick off with sharing ?

Why don't you share with us a little bit about that transition from working within an office in a sort of a big organization in the accounting and finance department to transitioning into owning and opening your own bookkeeping company , and why you kind of chose to focus on this wonderful world of movement that we're in ?

There's some stereotypes out there about us sometimes that we have to be encounters , we're boring , but no personalities , and I am just exactly opposite of that .

I love to lead a fun and adventurous , exciting life and I just always wanted my work to matter and I just felt like working in this corporate environment , I just felt like my work was really just going towards the big corporations , the big shareholders , the big boardrooms , and I really wanted my work to matter .

And so it took me a while but I finally took the leap into entrepreneurship and started my business and it has been the most fulfilling thing I've ever done so far . I really focus on health and wellness studios just because I'm super passionate about the industry . In my own life , I practice all forms of wellness in my own life .

You know , I used to be an athlete and an avid weightlifter and back then I would go to Pilates and yoga like every now and then , just for my off day , my easy workout , which kind of makes me laugh now , because we all know Pilates will humble us for sure . But it wasn't a few years ago .

I was going through some rough times , kind of a rough bottom , and I started going to Pilates and yoga on a regular basis and I truly found the benefits of these types of workouts outside of just you know , that 45 minute physical activity and I got hooked and so I really just my mission now is just to support these business owners and making more money and

growing their businesses , because I saw the impact that it had on my own life and I'm just super passionate about bringing that to more people in our world .

You know I truly believe in abundance and that if we can , if I can , help those business owners make more money , create more abundance in their own life and in their businesses , that that just means more good happening in our world . And so , yeah , I took the leap , started last year and it's been super fulfilling since .

So so let's dive into talking about some of the , some of the numbers , and obviously you know your way around all the different reports and all the different numbers that you know any business , and especially studio owners , should be tracking .

So when talk me through and perhaps share with everyone listening what types of businesses and what kind of stages of businesses kind of come to you looking for your bookkeeping services and what kind of do you kind of and how do you get started with them ?

And so it's either that , or they're looking to grow and scale and they realize that they need to get their books in order , and so they'll come to me and say I know this is a problem and I know , in order to grow my business , I need help around this and some guidance .

So it's a wide range of either starting their business , just getting started and I'm helping them open and get their accounting system set up in a way that's meaningful to help them run their business all the way up to hey , I'm ready to scale and help me understand the numbers and dive into them more and put in strategies in place to help me reach these big

goals that I have for myself .

And so when we think about our books , you don't want to look at the books of a studio in the same way that you're going to look at the books of , say , like , a restaurant . They're completely different industries , completely different businesses . So we want to make sure that we're getting their books set up in a way that is meaningful for studios .

So she came to me and I have pretty much a framework in which I'm setting up my each studio's books kind of in a consistent way to where we're getting the data that is going to help her manage her business from the get-go . So , yeah , I got her book set up and then we just monitor the numbers on a monthly basis as she's open .

So I think we're six months in now with her , so definitely see early stage businesses .

So you know , I think , numbers and tracking numbers and all numbers , you know , I work with the studios that I work with .

I don't do bookkeeping for them , but we look , definitely look at their key numbers in terms of revenue and sales , but also some of those other kind of really critical numbers to sort of track from a business development and business growth perspective .

And it's often , you know , I think , for any business owner especially even as those like you and I who perhaps really enjoy the numbers , to take the time and dedicate time to sitting down and kind of not just tracking them but then reviewing them and trying to understand what the numbers are telling us .

So can you share a little bit about what you see are some kind of common I don't want to say mistakes , but maybe some challenges or things that you see studio owners do that might make it more challenging for them to be looking at their numbers ?

I think 9 out of 10 business owners that I talked to for the first time , they come to me with some sort of shame statement about themselves , sort of shame statement about themselves . I can't believe I let it get out of this hand . I should know these numbers . I can't believe it's such a mess . I'm so embarrassed . Insert shame statement here .

So there is no shame if you're doing any of this . But I will say you are the CEO of your business and it is your responsibility in getting this stuff in order , whether that be you understand it yourself and implementing this stuff or you hire someone like myself who can help guide you through this process . So we're not shaming ourselves .

So one of the first things that I see quite often is the mixing of personal and business expenses . I see this all the time and there's some reasons why we wanna make sure we're not doing this . You wanna keep your business expenses separate from your personal expenses so you can truly analyze the operation of your business and how it's performing .

It's going to help you plan for the future . It's going to help you reach your specific goals that you have for yourself . And if you have everything muddied up , it makes it very difficult to do that . So that's the first reason . There's a couple other reasons as well that I don't think many business owners realize , and the first would be tax deductions .

If you have things mixed up say , you got audited by the IRS it would be very difficult to prove what's a personal expense versus a business expense and you run the risk of potentially losing tax deductions , which means that you would be paying the IRS more taxes , potentially interest penalties , and none of us want to pay the IRS more than we have to right .

And then there's a third reason of and I'm just going to caveat , I'm not an attorney so I'm not going to dive too deep into this but there's potential legal repercussions that could happen if you're mixing expenses , that they could potentially come after your personal assets if your studio were to get sued .

So we definitely want to keep personal and business expenses separate . A couple other things that I see and I briefly touched on it is not looking at your numbers on a regular basis . I know this isn't the most fun thing for a lot of studio owners to do , but you don't want to wait until tax time to start looking at your numbers .

And there's a couple of reasons why . A , you want to know what's going on in your business so you can make adjustments and changes during the year if you need to right . You want to . You're the CEO . Again , you need to know how your business is operating throughout the year . You can't just wait until February or March in tax time .

It's too late to make any adjustments at that point . And then , secondly , again , it just comes back to taxes . So if we want to reduce our tax liability , there is a strategy behind that and you have to do that during the year in which the tax year is occurring . So you can't wait until February or March to do your books .

It's too late to implement any tax strategies and therefore you could be paying more taxes to the IRS . Again , we don't want to do that . And then the last thing I would share , I see quite often is just running your studio without a plan . I don't think a lot of studio owners sometimes have a plan in place .

They'll have a goal for themselves , but no plan to actually get there . And so what is that saying ? If you fail to plan , you plan to fail right . So we have to have a plan in place to reach that goal .

Whether that be you want more time freedom to spend with your family , or you want to have multiple locations and scale your studio , you have to have a plan in place in order to reach that specific goal that you have for yourself .

And just going back to the first one about mixing expenses , I think the temptation is there and I think that , especially if you start off in your small business there's always that I see it a lot the sooner that you can make that very clear distinction between your business and your personal expenses , the better for your business and for all the reasons you

mentioned , of course , but also , you know , I often , I'm frequently having conversations I , as I know I'm sure you are also about valuation of your studio , and if you want to sell your studio , if you want to have a valuation put to your studio , then you're going to need to have books that are clean , and that means that you don't want to be able to kind

of when they do their due diligence on a studio . So there's a lot of really good reasons for that . So I really appreciate you sharing all that great advice .

So if you want to get financing , you can't have things muddied up . So that's just another reason as well .

And so we're seeing a lot more interest from external investors and more and more of the studio owners that I speak to , who are doing well , even if they've only been open maybe 18 months or two years , are getting approached from all different angles , asking about hey , can I buy ? Can I , can I , can I buy into this ? Can I buy into this business ?

Can I fund you ? Can I help you expand ? I think what you have is great and you know we want you want to be able to be ready to take advantage of those opportunities . If that's part of your plan , right , like , if that's part of what you want to do , then you know you are looking at studios numbers on a day-to-day basis .

So what are some sort of best practices , recommendations for really making sure that you know you're not going to be scrambling at the end of the year or the end of the quarter , the end of the month , when it comes to your numbers and maybe picking the phone to you and saying , hey , I need your help , but what's the best ?

What do you recommend your studios do ?

I know you talk about this in your podcast and in your coaching in your podcast and in your coaching , but anytime that we can automate our processes and systems and just get one thing off of our plate makes it easier , get the thinking out of it . So there's ways that you can automate your finances and your systems .

And then you want to again set up your books in a way that is meaningful for your studio business . So getting your P&L and your report set up in a way that is going to help you manage the operations of your business . So one example I'll just share is like , for instance , your income .

A lot of times when I'm looking at studio owners books , you'll see their income and it's just one line . It'll show they got paid from Stripe or Square , wherever the money came from , but that's not telling us what they actually sold . Did you make your income from drop-in classes or teacher trainings or privates or merchandise ? What did you actually sell ?

And so we want to set up your books in a way that is meaningful , that you can see the trends of what's going on in your business , that it's going to help you make decisions , see seasonality and spot things that will help you plan for the future . So then you wanna make sure that you're set .

You're looking at your books on a monthly basis and so I would say , every month , set a money date for yourself , sit down , do your bookkeeping and look at the numbers , and you're not just looking at the month on its own , because that doesn't really tell us .

It tells us what happened in that month , but we wanna be comparing to prior periods , so you want to look at the prior month , you want to look at the same month last year , you want to look at the year-to-date trends , the history , and again , that's really going to help you understand the seasonality in your business .

Maybe you had some large expense that you paid last year that you forgot is coming up this year , and so it's a one-time cost and it helps you plan and forecast for what's to come .

So we're always looking at what the story of the numbers is telling us , to where we can implement different strategies and changes in our business to help us increase the profit and then I'll also offer . So that's like a monthly review , but I would also share .

I would love if , like once a week , you do just a little pulse check on what happened in the week prior . You're the CEO Again . You want to understand what is going on in your business . So on a Monday , just check in what were my sales last week , what was my attendance , did I gain any members , did I lose any members ?

And just keep a pulse check on what's actually going on in the business and again , not waiting until tax time to know this stuff , because it's way too late at that point .

It's almost like the hurdle is just sort of committing to the thing , and I think a lot of it's always helpful to be able to sort of talk through what the story behind the numbers really is , because the questions that I answer for my studio owners are questions like is this a good profit margin ? Is this what my conversion should be ?

Is this what my retention should be ? And that's a big question to answer right , because there's a lot of other things that are tied to that answer and whether or not it's good or could be better or perhaps is not so good .

But you know , because there's a lot of different things that go into those numbers , but you want to understand what those numbers are telling you as well , and so having often having a fresh set of eyes on those numbers , talking it through with someone who sees numbers like this regularly , can help also to fill in some of those gaps and then I think you can

develop that skill over time . Just from seeing those numbers and seeing what they mean and understanding what they say , you can kind of look at your , you kind of know what your kind of targets are for , say retention or new members or sales and sales growth .

And you know , obviously , something I talk about a lot , especially you know well with all studio owners actually , and it's it's global . The seasonality in the businesses that we have is global , and so you kind of have to know what it means for your business as well within not just within sort of the whole of the industry . So it's always helpful .

And the way that we're really doing that with my clients is we have a tracker , you know , a Google sheet where we are keeping track every single month of these key performance indicators , these key metrics of what happened in their business , and we're looking at the trends month over

month . And I do agree with you and think it's exciting for studio owners when they start to understand the numbers and they can see , when they are making changes in their business , how it actually impacts the numbers .

It almost becomes like a game , you know , like we're going to we're going to work on this and to see the impact of what you're implementing in your business on the actual numbers , I think is exciting for them .

And now she's , you know , looking at expanding and adding locations and all these things and it's sort of like you know you have to take these stepping stones right to be able to get there .

And yeah , it's great to see when , when people have the , the you know when you kind of take that step , when you commit to it and when you know what you're looking at .

And having like said , the external support is really important too , because you know we can't be experts in everything , right , and you know , I don't know why we think we should be , but that is often the way that we approach business .

And then you want to understand your net or your gross profit , which is looking at your income less the cost to run your studio , which is really like your salaries that you're paying your contractors or your employees , and understanding what your gross profit is .

And then you also want to understand what your net profit is , which is when you take your gross profit and you back out all of those extra expenses to run your studio , right ? So all the other things that are coming up in terms of costs .

And then I would also share you wanna understand your cash flows , because this is important to manage the future of your studio , and understanding how much does it actually cost and how much cash am I outlaying on a monthly basis .

So what are the costs of my expenses If you have any sort of debt payments that you have to pay , and then if you have any owner's draws that come out and so understanding what your cash position should be and making sure that you have enough reserved to cover those cash outlays .

Yes , yes , and we've seen although I will say like my studio owners have done excellent the last you know this out of COVID and even during the summer months we've seen a strong summer for many of the studio owners .

But some studio owners , studios saw a bit of a decline seasonality clients are out of town , traveling , all the things for the summer , right , and we see , then the nerves start to set in .

But if you've kind of factored in that seasonality into your expectations and into your goals and targets , but you also know you've got that cash on hand to lean on , then you're still in a very good place , right .

And so when it comes to having how many months of sort of I know this sort of in terms of operating costs , what would you recommend people have set aside and accessible .

You know , it's really just depends on how you feel , but I think a good place to start is having three months on hand of what your cash expenditures are and having that just sitting in an accessible cash account that you can access if we have some sort of catastrophic event happen , that you're covered for a few months .

And then I know in the past on this podcast and it often comes up people talk a little bit about the profit first approach . What's your perspective on this and how do you integrate that into the work that you do with your clients ?

So you have to keep up with it . So every month , you have to be making sure that you're doing your transfers from your operating account into your tax account , into whatever accounts you have established . I do think it is a great way for business owners to manage their cash and making sure that comes up all the time .

It's tax time , it's time to pay your estimated taxes and the cash isn't there because they haven't planned for that . So I do think it's a method that helps business owners stay accountable and putting that cash aside , knowing that it's not money that I can spend today because it doesn't go to the government .

So I do think it's useful if you stay on top of it . There is some accountability behind it . That's needed For sure .

A lot of account numbers , a lot of you know , and that's just for your business , so you know , and that's just for your business . So you know you want to . You do have to be organized .

But I think that as long as you are being smart about how you're managing your cash in your accounts or your account and maybe you're probably you , you and you're setting aside an amount and you're not looking at your bank account as sort of like this , this sort of bank , this pot of money that you can spend all of immediately , then I think you're probably

going to be able to manage it without having all of those accounts . But you know , I think everybody has a different kind of approach and has different kind of mindset around it . So I'm just curious , interesting . So I have one more question for you .

So you know , we're seeing so much growth in this industry right now and a lot of , like I've mentioned , the studio owners are looking to expand and add locations . So what sort of one piece of advice that you would give to studio owners who really , truly want to scale and grow their businesses ?

So , having your books in order , having them set up in that way that is meaningful to your business , and deeply understanding your numbers . What is working , what is not working , what is driving profits , are you reaching the profit margins that you want for yourself ? Where might you be losing money ?

Are you missing out on opportunities that you could be taking advantage of ? Like really truly understanding that business model , and do we want to replicate that in the next studio ?

You know , of course you have to find a location and it might be a little bit different than your current studio , but you want to make sure that you understand the first one before you just go and implement it into another one because you might want to make some changes , something might not be working in the current one , and that all starts with your

bookkeeping .

So if you go to healthybalancebookkeepingcom slash tracker , they can download some of those KPIs that we talked about earlier . That would help them start monitoring your KPIs in your business . There's a link on my website .

I would love to just set up a free chat and we can go through your books and see how I might help you reach your specific goals for your studio . Awesome .

. If you love what you heard today and you'd like to hear more , I would be so appreciative if you could take a quick minute and go to wherever you're listening to this and rate and review and follow this podcast .

It would mean so much to me and help you to help us to get this podcast out there into the community so that other studio owners and wellness practitioners , just like you , can feel encouraged and supported on their journey in our industry . Did you love this episode and want more ?

Head to spring3.com and check out my free resources that will help you run a profitable and fulfilling studio business . And before you go , one last reminder there is no one way to do what you do , only your way . So whatever it is that you want to do , create or offer , you've got this .

Thanks again for joining me today and have a wonderful rest of your day .