Most business owners have no idea how much money they actually need to make. I was one of them—until I sat down and ran the numbers. What I discovered changed everything.

I assumed that as long as I kept growing my business, the money would follow. But despite hitting my goals, my bank account told a different story.

That’s when I realized: growth doesn’t guarantee profit. Without the right framework, I was just running on a hamster wheel.

I needed a simple, proven way to turn my hard work into financial stability—without working myself into the ground.

It’s time to reignite your initial passion by having a solid plan using my Money Map. This new perspective will show you exactly what needs to happen next in order to have the business that’s predictably profitable.

For those who are getting started in business, this map will ensure you don’t fall into the same trap most people never get out of.

90% of online businesses fail within the first year—often because they overlook basic financial principles. This leads to poor marketing, unrealistic pricing, and an early sense of failure that drains motivation.

Even those businesses who keep going are being run by business owners who are working way harder than they did when they had that “safe” job.

I know this firsthand – because I was that guy.

Learning the Hard Way

When I started my first business I didn’t have aspirations of running a $100M company. Hell, I just wanted to make 6-figures, while doing what I love.

As a CrossFit gym owner (my first business), I thought I was on my way—until one night when I finally had enough time and space to actually sit down and run some numbers.

It was an obvious thing to do—because that month, I finally hit the membership goal I’d been carrying around in my head for years:

125 members paying $125 per month.

When I started, $15K months ($187K per year) sounded like a lot. And I was a simple guy with simple desires—I wasn’t trying to be rich.

But the reality? I was bringing home less than $50K a year.

That $187K disappeared fast—eaten up by expenses, rent, payroll, and more.

Every year, I’d sit down with my accountants to go over the numbers—and every year, I’d feel defeated.

Taxes.

I never had enough to pay them, so I ended up on a never-ending payment plan with the world’s most relentless collection agency. You know the one—the one that sends scary letters.

A bachelor’s degree. Military experience. Less than $40K a year after taxes. And no vacations.

Most days, I wanted to punch myself in the face for being so damn stupid.

The Wake-Up Call

People in town treated me as though I must be rolling in dough because I owned a business. And I had the most expensive gym membership in town (this was 2010). They didn’t do the math though.

Your customers never do. They only think about what they’re paying.

And the fact that people looked up to me as a successful entrepreneur made it worse. I felt ashamed. So, I put on a facade and worked harder than ever to fix the problem.

Until one night, I realized that no amount of “hard work” was going to fix my business model.

I was doing the exact same thing I had watched my dad do—trying to outwork bad numbers.

Reverse Engineering Profit: The Game-Changer

It was a Tuesday. I sat in my home office with my business partner and a whiteboard.

Instead of looking at our current numbers, I started with a clean slate. I was so disgusted with my situation that I was ready to shut the business down if it was unable to pay me what I wanted.

The number I came up with? $75k a year.

Laughable now – but life changing then. I asked my partner what he wanted to make.

He stated the same number. Copycat.

Total: $150k. That is what we needed to profit.

BTW, I didn’t even know the actual definition of profit. We just knew that the business needed to make $150k beyond what it cost to run the business.

Knowing that it was so close to how much the business was making, it was obvious we required a dramatic shift.

I was willing to collapse the whole business… and that is what it took for me to find the solution.

We had another business partner who wasn’t present, and I figured he’d probably want to make the same. He wasn’t full time, but he wanted to be.

We’re now at $225k of profit. More than the business has ever made.

A number I had never been present with before. In that moment it was obvious we required a dramatic shift.

The Reality Check: Raising Prices Without Losing Customers

It was time to reverse engineer the business.

We figured the capacity of the gym was 200 members. There would be some additional costs to running the facility we factored in. We also wanted to give our staff health insurance, etc. Because we wanted to be good employers.

Our math? The gym needed to pull in about $450k a year.

$450,000 divided by 200 members, divided by 12 months = $187.50 (I’ll never forget that number).

That’s how much we needed to make, on average per member.

Current average? Less than $125.

I felt hope and panic all at the same time. Hope, because I now knew exactly what it would take. I had clarity.

Panic, there could be someone at the gym signing up with a contract at my bitch ass rate right now. Dragging down my average.

I figured I would start by grandfathering in all my current members where they were at, and cover the difference with new members. Plus, there’s always a churn. Lower payments drop off every month and we replace with bigger ones.

And, I could always change my mind 😉

I changed my agreements from $125/mo for a 12 month commitment to:

• $265/mo for 3 month commitment, paid in full = $795
• $212/mo for 12 month commitment
• $197/mo for 18 month commitment

The Shock: More Customers, Not Less

That was the day I stopped experiencing that sinking feeling when I told new prospects my prices. I stopped giving a *uck about their opinion.

You know what happened?

We had more sign-ups in the first month with new pricing than ever before.

My expectations were shattered.

And it continued to happen, month after month.

As I reflect back on that time, I realize that the number had very little to do with the decision making process of those signing up.

It had to do with the man handing them the agreement. I embodied my values and they felt it.

Within two years we were clearing more than our goal.

Ignore Competitors

Do you know why I was charging $125/mo in the first place?

I had a habit of going to other CrossFit gym’s websites and checking out their prices. You know what they were charing? Between $100 and $150/mo.

My gym was in Memphis, TN. A city with the lowest incomes and lowest cost of living in the nation. $125 felt bold to me. I put myself right in the middle.

When I had my financial revelation, I realized that those other gyms were suffering.

No matter how cool their site looked, or how fancy their gym was when I visited, I knew the owners were barely making ends meet, just like I was.

Years later, after I started podcasting, and traveling to CrossFit competitions with my team, it became obvious to the other gym owners that we were doing it different.

I started getting phone calls multiple times a week from gyms in other cities asking for advice.

I felt important. And I was astounded that years later other gyms hadn’t come to the same conclusion I did.

Over and over again I found myself encouraging them to raise their prices. Each call I was met with resistance. They all had the same concern, “the other gyms…”. They were stuck in the price comparison loop.

A vicious cycle of fear of driving the price down – which in turn made the business unsustainable – eventually eroding the culture of the community.

Members would become dissatisfied with the service and decide to open their own gyms, believing they could do it better. Those same people would find themselves in the same exact position a year later.

If you were ever part of the CrossFit community you know what I’m talking about.

If they would have just ignored the competition and got objective about their numbers they could have succeeded.

Demystifying Profit

You’re probably not a CrossFit gym owner, but the principles I share still apply to you – whether you’re already years into the game or just getting started.

Predicting exactly what it will cost may seem like a mystery. Each business is unique. Models differ, and how it’s executed is personal.

For those who are established but treading water, adjusting your cash flow accordingly will reignite your growth.

This approach will inform your choices moving forward.

Your Personal Profit Target

Like in the story above it starts with you getting real about how much money you desire to put in your personal bank account. Please tell me your business and personal accounts are separate. If not, that’s your first step.

This advice has nothing to do with taxes. That’s the least of my concern here.

Fast forward 3 years from now. Is there a number you want to hit that provides you with your desired lifestyle? Add 20%. You’ll notice I add 20% to a lot of my figures. Do business long enough and you’ll get it.

This is your Personal Profit Target. It dictates your model, prices, marketing & operational budgets, and beyond.

Write it down.

Psychological Profit Programming

Traditionally, profit is considered to be the money left over after the operational costs, expenses and taxes are paid out of the business. See definition from Investopedia.

Key words: left over. It’s thought of as “extra”. And to most, it’s a last consideration. This is the psychology of a struggling small business owner that will never be big.

The world at large thinks about “profit” this way. And that’s very important to know. Because the majority of the world has no idea how to create it, nor are they primary party responsible for it.

But they do seem to have an opinion about it. Don’t let ignorant cultural narratives pollute how you feel about the word. That’s important. If you want to go deeper into how your feelings are impacting your decisions, you can read “The Ultimate Mindset Hack” post I wrote awhile back.

The word profit typically carries a heavy negative connotation because we have a history of predatory politicians that thrive on using “us vs them” narratives to remain in power. We’re transcending that now.

Listening to accountants will keep you poor

Accountants giving advice about managing money is like a scale giving weight loss advice. They may be able to let you know the result of what you’ve done, but are rarely helpful in strategic planning, unless you’re getting into sophisticated investing where tax strategies play a large role in growing your wealth.

The psychology of someone who chooses accounting as a profession seeks safety, and predictability. It’s a technical job with little innovation involved. They are not growth oriented. They’re there to minimize losses.

There’s nothing wrong with them. They’re important but they’re a minimal advisor.

Early in my career I sat in the office of my accountants trying to make sense of things. I wanted more from them, thinking they were experts in money management, but finally realized their advice makes up about 1% of my money managing decisions.

Also, don’t rely on accounting software to make decisions. It’s a snapshot of what happened, that’s it.

So, if you talk to accountants about profits, their understanding of it, although positive, is also backwards. It’s the very last thing they look at.

Your job as a business owner is to make it the first thing you look at. It plays a role in every decision you make. That doesn’t mean it’s the only consideration, but it is a constraint. And creativity loves constraints.

If you choose to ignore it, it’s not risky or noble, it’s you choosing to ignore reality. That’s what we call being “asleep”.

Our Definition of Profit

Our definition of profit is: the money you choose to take home as the business owner from creating value for your customers.

It’s choice.

Even if you choose to think about it last, that’s a choice. And the result of your choice will dictate your financial position over time.

Dissatisfied with where you’re at? Look at the choices of your past. There’s no one else to blame. Take 100% ownership if you want a chance to change it.

Choose your Personal Profit Target now and allow your business decisions to be informed by it.

Reverse Engineer Your Profit

Step 1: get real about what your desired lifestyle costs and write the number down.

Step 2: Add 20% to account for those unexpected expenses. That number is your Personal Profit Target. Example: You think you need $100k, add 20% and now you’re at $120k.

Step 3: Predict the cost of doing business by multiplying your Personal Profit Target by 2 . Expenses, taxes, etc. That’s your Business Target Revenue. Example: double that $120k to get $240k.

Step 4: Check your prices and model to see it’s possible to hit that number.

That’s it! In this example your business needs to pull in $240k to meet all your needs and any of the needs the business will have to continue operating and growing.

Very simple for when you’re just getting started.

Putting it all together

You may be excited by the fact that you now have a plan.

You may be feel disappointed. Your number may be bigger than you originally thought. It’s ok. Don’t let it get you down, it’s time to update you plan.

If you’re new to entrepreneurship you’ll soon learn that it can be a rollercoaster of emotions. I gets easier over time if you allow it to help you grow as a person.

Most established entrepreneurs pay themselves too little and dedicate too much money to paying for the cost of doing business. For them, taking a hard look at your expenses and cutting back, while seeing where you can increase revenue is necessary.

Others may be paying themselves the majority of the revenue, which can hurt the growth of the business. Taking all the money home and not investing back into growth related expenses will keep you small. It could also mean there’s adjustments to be made in pricing in order to make sure there’s enough money to go around.

Either way, you’re likely experiencing the need to adjust somewhere. Take it slow.

Next moves…

You may be wondering exactly how to allocate everything else.

Or, how to change your business model.

Or, what to do with operational money in order to grow.

Or, how to make adjustments if you’re waaaay off.

There can be so many questions that are specific to your situation.

Good news.

I got you covered.

This is just a piece of the Money Map inside The One Hour Business community.

If you’re ready to go deeper…

>>> Join The One Hour Business Crew

-Mike