Incorporate your Fitness Training Business

   Many Fitness Trainers come to the eventual conclusion that accumulating a clientele and running your own show is their preferred business plan.
My last two posts suggested three options for running your own Fitness Training enterprise.

1. Be a sole Proprietor
2. Form a business partnership with other fitness colleagues
3. Incorporate

   Option 3 is the one to seriously consider if your client base is showing potential for significant growth and you want to call the shots without a partner. Incorporation demonstrates that you are serious about building your Fitness Training empire. 
   A corporation is a separate legal entity that has been registered with a legislative body. The word is derived from the Latin word Corpus which can mean a body or a body of people. (Wikipedia)
   Becoming a corporation means that the business is distinct from the owner. This affords a certain amount of legal protection. Trust me - as your business grows this is an extremely important factor.
    There may be some inconveniences in becoming incorporated:

• There is a fee to register as a corporation. 
• You will need to obtain the services of a lawyer.
• You will need a professional accountant.
• You are no longer a stripped down operation. You must now deal with government regulating agencies at the municipal, provincial (or state) and federal levels.
• You must now pay personal taxes plus business taxes if there is money left in your business account at the end of the year.
• You have to draw a salary from the business earnings. You no longer have free access to the finances. 
• Even if you are still a one person operation, once incorporated you are theoretically responsible to shareholders and a board of directors. In this case, YOU will be the shareholder and the board of directors. Think extra paperwork!

   Becoming a corporation means that you sacrifice a certain amount of flexibility. However if the Fitness Training business that you operate is building financial momentum it may be the sensible way to proceed. Here are the positives:

• Personal assets are PROTECTED from financial liability of creditors.
• Personal assets are PROTECTED from legal liability in the case of injured clients (see Picture).
• Your business can now add the professional title of 'incorporated' to the name. Clients deal with a business instead of an individual. This enhances your status in the fitness world. 
• Potential clients may consider the business to be a viable enterprise rather than some 'fly by night' operation.
• In Canada employers of a corporation pay into the Canada Pension Plan. Stateside it may be Social Security or an individual pension fund. YOU NEED AN ACCOUNTANT! Paying into a pension plan is a future bonus for when you retire to that senior's boot camp in Belize.

A fraudulently injured ex- client
plus - a strip mall, ambulance-chasing lawyer
equals -  Potential Legal and Financial Trouble !
If you are incorporated they can only go after your business assets.
Your personal assets are legally protected.

There is also an issue of whether to become a publicly or privately held corporation. Fitness Trainer businesses are usually small enterprises and will qualify as a private corporation.

It can be confusing - that's why you need a business lawyer!

To sum it up, incorporation is a sensible option for Fitness Trainer's who intend to run their own business on a full time basis. Legal protection is important!  However there can be a trade off with the laissez - faire nature of     how a sole proprietor can operate.
You will have to decide on what works best for you.

Until next time,.......keep fit

Little Bobby Strong

Links

schwabe.uwmfatloss.hop.clickbank.net

www.fitnwell.com

AudienceBuilder.ca

References

1. The Business of Personal Training Scott O. Roberts
Human Kinetics Publishers Inc. 1996
2. The Complete Idiot's Guide to Starting Your Own Business - Third Edition
Edward Paulson    Alpha Books  MacMillan USA Inc. 2000
(I guess I'm not an idiot because the book confused me...Little Bobby strong))
3. Greg Harvey Proprietor of Fit'N'Well Personal Training Inc.
Edmonton, Alberta, Canada
www.fitnwell.com       greg@fitnwell.com