// Grow your business: The Zenergy Group
Grow your Business features fitness professionals sharing their personal journey of growing their business. Here, Heather Smith talks to Jodie Hebrard, co-founder of The Zenergy Group based in Herston, Brisbane.
Heather Smith: Can you tell me a little about your business?
Jodie Hebrard: Tony, my business partner, and I started the business six years ago, with nothing more than some personal training experience and my bookkeeping/accounting knowledge. Zenergy is a personal training studio, not a gym. We deliver 40-minute, one-on-one personal training sessions in the mornings and afternoons and we target the high-end market, so our fit-out is plush and luxurious.
Heather Smith: It is a big decision for a small business to take on its first employee – what made you think it was the right time?
Jodie Hebrard: I guess the catalyst for me was when the 2005 Fitness Industry Award (wage and allowance guidelines for fitness industry workers) came out; before then there were no pay awards. Our personal trainers were sub-contractors, which was typical of the fitness industry back then. When the Award came out I knew that this was quite serious – if we continued to employ people as sub-contractors, they would be deemed employees.
The other influence was our margins; with a 50/50 split, there was no way to increase our margins. We realised we had been doing all the work, providing clients, sales, invoicing, and sharing 50 per cent of it. We thought, ‘if we are going to do more of the work, we should get more of the benefit’. With wages you have better control of your margins.
So there were two reasons why we took on employees, and when we made the change, it was great. We are really happy with it and find we actually attract a different type of trainer. With sub-contracting we were attracting some individuals who wanted to do their own thing and weren’t necessarily listening to us or open to being coached. Conversely, with the employee mentality the person tends to want security, and to be led. Now we have a fantastic team that works together, not a group of people who want to do their own thing.
Heather Smith: Who did you seek advice from about taking on your first employee?
Jodie Hebrard: Tony and I tend to make decisions amongst ourselves. I got the Award information from the website, I read it, and we discussed it. Our philosophy was ‘let’s just do it and see’ and that’s what we did.
Heather Smith: Was the process easier or harder than you expected?
Jodie Hebrard: For us it was an easy change. Back then, we had a small team of about three or four trainers, and we met with them individually to discuss the Award. We explained that a sub-contractor working full-time is deemed to be an employee, and went through the salary structure we had set up and asked whether they were happy to change to it. So it was not really a hurdle for us, because we had good relationships with our team.
Heather Smith: How did it affect your cash flow?
Jodie Hebrard: When we started employing, we promised trainers 20 hours per week and then built them up to full-time. Then we changed, and were able to offer full-time employment straight away. We offer security to someone who really wants to work full-time in the fitness industry. There are a lot of people out there who want a full-time job, but there are not a lot of options for them. From a cash flow point of view, we have to break-even, so it is just a matter of managing that.
I think you need to know your break-even point, and from that derive how many hours the trainer needs to do to cover their costs, and how long it takes the business manager to get a new client for them.
Heather Smith: What do you know now that you wish you had then?
Jodie Hebrard: I would have started employing trainers straight away, rather than subcontracting them. I wouldn’t have taken on too many in the beginning when we opened. In terms of starting a business again, I would be very frugal with the money. We were experienced personal trainers and I did crunch the numbers, but opening a business, marketing and selling is completely different.
We didn’t know our break-even point when we opened. That was stupid, and I wasn’t running cash flow straight away when I first opened, it was something I had to instigate when the business was not doing too well. We did not have a marketing plan in place either, so it was a very painful process at first; we nearly went bankrupt within four months.
Heather Smith: What advice would you give to other small business owners?
Jodie Hebrard: I read Brad Sugars’ Instant Cashflow and it just made me snap into a different mode of thinking. I would highly recommend his books to any small business owner.
Make sure you get into the habit of looking at your profit and loss. Look at your numbers; even if they are not good, look at them. Know your margins, track the conversion rate, and update your cash flow forecast. It is well worth it because you can’t run a business without understanding cash – if you are not controlling that, you are not moving your business forward.
Heather is on a mission to improve the financial literacy of business by empowering business owners to produce accurate and meaningful management reports in a timely manner. She is a commerce graduate, an ambassador and fellow of the ACCA, a MYOB Certified Consultant, a writer and keen advocate of technology and social media. For more information, visit www.aniseconsulting.com, email firstname.lastname@example.org or tweet T:@ANISEConsulting.au
NETWORK • SPRING 2010 • PP 56-57