A Love Letter to YNAB

Dear YNAB,

We love you. We think you’re the perfect compliment to any CrossFit affiliate or boutique fitness studio.

Love, SugarWOD

I usually blog about affiliate best practices that are related to coaching, but we here at SugarWOD always strive to understand the client and the many components that go into running a successful fitness business. We focus on the front end workout experience, but we never lose sight of all of the pieces that go into running an affiliate. In this post, I'm going to talk about a budgeting tool that I think will change your life as an affiliate owner or manager.

A Super Cool Budgeting Tool

In 2016 one of our developers here on the team at SugarWOD discovered You Need a Budget, or YNAB (affectionately pronounced why-nab) - a super cool budgeting app for personal finances. It made perfect sense that Jonathan would find this tool as he always seems to be at the forefront of the cool stuff - and budgeting, obviously, is totally cool. He mentioned it to me, and I set up an account on a beach vacation.

Over the next year, YNAB started to help my husband and I manage the birth (i.e., additional finances) of two kids, a growing gym of which became our sole livelihood but which did not have a predictable income, and all the other expenses that happen in a family of four.

By the end of three years, we had grown our money to 43 days. That’s YNAB speak for we were 43 days out from living paycheck to paycheck - no more living retroactively and unpredictably - and we were working toward some big goals.

Affiliate Owner Budgeting Frustration

At about the same time we started using YNAB for personal budgeting, I found myself always frustrated with the lack of information around our finances at the gym. We had multiple systems to pull together to get an accurate picture of where we stood financially each month - QuickBooks, merchant processing, our client management system, many company credit cards, and various bank accounts created for taxes, savings, apparel, and general operations. It was a tedious process, consistently inaccurate and completely retroactive.

We had multiple systems to pull together to get an accurate picture of where we stood financially each month - QuickBooks, merchant processing, our client management system, many company credit cards, and various bank accounts created for taxes, savings, apparel, and general operations. It was a tedious process, consistently inaccurate and completely retroactive.

In both my personal and business finances, I’d always struggled to find the system that worked. I had tried Mint, spreadsheets, QuickBooks, and yes, we even hired a fractional CFO for the gym to help us better manage our finances (I won’t share with you how much we paid per month for that service, let’s just say it covered half a month’s grocery bill).

But alas, it never worked because all of those systems are retroactive. They gave me a picture of where I stood at the end of each month, but there was little to no real-time information. It was as if every month we threw a bunch of money in the air and then had to wait for the next month to see where it all fell, if we were in the hole, or if we’d come out ok. The disjointed system also took the budgeting and business ownership power out of my hands as I had to rely on others to get the information I needed.

When I used to work the Level 1 seminars for CrossFit Headquarters, some of the most common questions I would get at the social were, “How do you guys do your books? Are you profitable? How do you pay your coaches?”

Remember when you first found CrossFit and you wanted to tell everyone you knew about this fantastic fitness program? That’s how I felt about YNAB. I wanted to tell every gym owner about this completely affordable gift from the budgeting gods.

The Guy That Started YNAB IS a CrossFitter!

Little did I know that Jesse Mecham, the guy who started YNAB IS a CrossFitter!! Figures. And he’s totally jacked in his videos. See what I mean? AND he uses a whiteboard! He’s also written some great posts on CrossFit and budgeting and you can find one of them here.

What is YNAB?

YNAB is a proactive budgeting tool that is based on four budgeting rules. You can learn more and read about those four rules HERE or watch the video. Below I’ve written about how each rule applies to us as affiliate owners.

YNAB’s Four Rules and How They Apply to an Affiliate
1. Give Every Dollar a Job

In the YNAB method, every dollar that you have is assigned a job such as yearly affiliate fee, merchant processing fees, internet, equipment budget, etc. We affiliate owners are flooded continuously with opportunities (i.e., sales pitches and money pits). By giving every dollar a job, you have an accurate picture of whether or not you can spend some funds. And this picture isn’t based on one day or month, it reflects an entire year.

Let’s say, for example, Rogue sends you a super dope email with Free Shipping! You immediately remember that reverse hyper you’ve wanted forever. You hop online and view your bank account, see that there’s enough money there to afford it, and quickly purchase it.

But, then two days later you remember your yearly affiliate fee is due, and you’re now solidly in the red. You then get three emails from members who say they’d like to cancel their membership and you stay up all night with a solid anxiety attack trying to figure out how to get more members to cover the deficit. You decide you need a new website to do this but alas, websites cost money, and you don’t have any.

With the YNAB method, you would hop on YNAB, check your equipment budget and see if you have the funds to make the purchase at which point you would see you don’t. You could then either reallot funds you already have to make the purchase or see that you have to hold for now.

2. Embrace Your True Expenses

Let’s face it, there are A LOT of recurring monthly and yearly expenses that affiliate owners have to deal with, yet many of us rely on our memory and that “uh oh” moment to get them paid. Take for example that pesky affiliate fee that comes up each year. In the YNAB method, you would allot 1/12th of the affiliate fee to that expense each month so that when it comes up - voila! - you just pay it and move on. Low stress, happy life, better workouts.

3. Roll With the Punches

This one was hard for me to embrace initially, but after almost 2 years as a CrossFit YNAB'er (or CFYNAB'er) I can happily report that it really does work. Shit happens. Maybe you’re like us and have some seasonality during the summer months and have to shift some money around. Or perhaps you purchase a crappy set of collars that ruin all of your 25s and have to replace $3,000 worth of bumpers. YNAB helps you see ALL your money in one place and makes making those tough decisions a lot easier.

4. Age Your Money

The gist of aging your money is to spend less than your revenue. - Always. This is what makes it possible for you to be proactive (i.e., have money in the bank to pay your credit card every month) and not be a prisoner of your monthly revenue and deposits.  

Our age of money has grown from 4 days to 22 days in the past year. While this doesn’t sound super impressive, it has worked wonders for us and the health of our business.

What Are Our YNAB Categories?

It took us almost a full year to solidify all of the categories we need and come up with an appropriate budget for each. Here are the categories we’ve landed on for our budgeting in YNAB in 2019. I hope they can be helpful to you as you start your YNAB journey.

Start Budgeting!

If you’re a gym owner that has struggled to get ahead of your small business finances, I can’t recommend YNAB enough. Read the book, watch the videos, and get started.

Questions? Post to comments!

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