4 Aug
Business or Hobby? Fullfilling Our Calling While Fullfilling the Budget
It was chilly this morning. Finally. After weeks over 100F we were due for a little cooling off.
I opened all the west-facing windows to tempt the cool air in while I packed lunch, made coffee and thought about a conversation The Wife and I had last night on the back porch.
Is it a business or a hobby? What’s best for our family? When is it time to say “when”? Who should we ask for guidance?
Six years ago The Wife took a leap, left a desk job and opened her own business: a fitness studio. She had a passion for the work and it showed. Clients loved coming to her and the first year was a success.
In its second year we doubled not only the studio’s size, but our family’s size as well with the birth of our children. Those two events proved pivotal for the business. The Wife cut her hours back to be home with the babies.
We had raised the overhead and reduced the most valuable part of the workforce — you see where this is going.
The economy began slowing the following year and clients began falling by the wayside. At first slowly then in droves. We had four employees at the time and I remember the first month we paid payroll with my personal credit card.
We bought our way out of the lease and scaled back to a location less than half the size of the original studio. We sold more than half the equipment, cut advertising to nothing and said goodbye to the staff.
That was 18 months ago; a full year before we started our financial makeover.
Today The Wife works when the kids are in pre-school and the studio pays its own bills. Some months she brings home $1,000, some months nothing. The “nothing” months are pretty painful. The Wife went so far as to fill out applications at Home Depot and Barnes and Noble, but balked when I asked if that was really what she thought she was put on this planet to do.
Kindergarten starts next week and adds two things to the equation: a $560/mo reduction in tuition and a 60% increase in The Wife’s available time.
That brings us to last night’s discussion:
What should we do? The Wife loves the work, but not so much the business side of entrepreneurship. She is reading Tribes
I encouraged her to call Dave Ramsey and ask for a dollop of his common sense. My guess is he’ll say, “It’s okay if you don’t want to own and run the place. You can always work for someone else’s studio, but a business that’s not making any money is a hobby.”
The sun peeked over the horizon as I closed the front door and enjoyed the chilly air on the way to the car. Another beautiful morning, another chance to do the thing we were put here to do.
I just wonder what that is.
the Dad
Posted by Jac Lynn on 08/05/09 at 5:08 am
As a Personal Trainer of 13 years and a big Dave Fan I say keep her in fitness. That doesn’t necessarily mean keeping the studio open. There are many options.
Is there a public gym or YMCA in your area that allows personal trainers to work there for a fee? Sometimes it’s a percentage, sometimes it’s a flat rate, like rent. Either way it would cut the overhead of the studio, and simultaneously expose her to a constant flow of customer base. Usually it’s an independent contractor type of arrangement. She can still make her own hours.
There are many ways to practice fitness education. Owning your own studio is just one of them.
From a different perspective, there is a big difference between training clients and being a business owner. If you guys haven’t read Michael Gerber’s E-Myth get it ASAP. It does a great job of identifying the problems I’ve seen in the fitness industry (which are not unique to fitness) over the years AND recommending solutions to those problems.
Fitness is a tough living to make because making money requires face time with clients. Adding business running responsibilities to those hours can be a lot to take on.
Best wishes for a fulfilling decision!
Posted by Granny on 08/05/09 at 5:57 am
It has always been clear to me what we were put here to to: Bring up our children and enjoy our time with the next generations. At least work allows us to do that. At most we enjoy the time we spend doing it. I’m not so clear about hobbies; to me they have been expendable. But, I do have to admit that I am really enjoying getting back to mine. So, what does this say about The Wife’s business? I think the question still remains: Is it business or hobby? Maybe it’s OK that it’s not clear. Or that it is both.
Posted by Jennifer on 08/06/09 at 2:10 pm
I could ask the same question about my own business I suppose (peachypendants.etsy.com). I love doing it, but I rarely make more than $1,000 a month doing it. And this year my youngest goes to first grade – meaning that for the first time all my children will be in school full day (well, from 9am to 2pm anyway). I know there are other things I could probably do that would earn more money, but I really like running this business.
I think I’m going to give it one more year and see how it goes.
I wish you and your wife the best in making this decision!
Posted by KELSALYNN on 08/07/09 at 6:50 am
Hmmm… I don’t have any insights to be honest. Just wanted to say that it’s great you guys are looking at it from a different perspective, communicating about this topic, and really evaluating it from all angles. Whatever you guys decide, I think you’ll make the right decision and you’ll make it for the right reasons. Keep us posted. Good luck!
(You know from my blog that my husband and I are really into fitness. He works full time, but works one day each week doing personal training. It means that he works a lot of hours, and sometimes he’s tired, but he loves it and can’t seem to give it up. I know that if he could find a way to make a better living at it, he would do it full time.)
Posted by the Wife on 08/07/09 at 10:56 am
I have decided to dissolved the corporation part of my business, with Dave Ramsey’s blessing. My business is not big enough, I don’t have any employees but myself, nor am I making enough money to require the protection of a corporation. I have insurance that is good enough for me. That will save me over $800 in taxes a year!
I have two new clients this coming week. Another client renewed. I have checked in with the local health food store and shook hands and left business cards. I also checked in with the YMCA and was a hit! I am expecting their call next week and hope to teach two classes a week in the mornings.
Things are looking up. Must keep the pressure on!
Posted by Tam on 10/05/09 at 5:18 am
I know with a great deal of certainty that I am not put on this earth to sell warranties at a car dealership, HOWEVER, if I can stick it out and we can continue the momentum we established in April, we will be debt free in 3 years. That is $180k paid off. For now, I will work 60-68 hours a week as a means to an end. I hope to start my own business at that time…for now I work for the man who pays me regularly and ridiculously well.