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‘Our fines were bigger than the tax bill’

Adam Zuchetti
Adam Zuchetti
11 August 2017 1 minute readShare

Two business partners reveal how their business finances hit rock bottom, and what they did to turn things around.

“The worst case was when the fines were bigger than the tax bill. That was rock bottom!” admits Raph Freedman of CrossFit Creature gyms and The Mind Muscle Project podcast.

It also coincided with the owner-operators being unable to pay themselves for a period of three months.


“I think that was the moment where we realised, okay, this is not good. And that’s when we got more serious about it,” says Raph.

Co-owner Lachy Rowston says a big part of this was not having the right skills managing the business finances to ensure that cash flows were kept on top of and that communication of any issues was made before things reached crisis point.


“I guess we put the wrong person in charge at the finances. He didn’t ever tell us that we’re in a terrible situation,” Lachy recalls.

Combined with this was a poor focus on running the business as a business, and instead they found themselves caught up “doing the fun stuff”.

“We were athletes from day one that started a gym to have our own gym to train in, essentially. So [we] weren’t ever really business owners at the start,” says Lachy.

“We had very little business background, so just slowly over time, as it was like, ‘Hey, you can’t pay yourselves this week, and you have to coach other classes, and this member leaves, and they’re not walking through the door anymore’; that’s when slowly the reality starts to hit.”



It was this lesson that helped Lachy and Raph understand the true value of hiring people early on, to ensure that your core skills are used primarily on your core competencies that drew you into business in the first place, and let other qualified people assist you with the operational side of the business.

“That reality kicks in, and it’s like, ‘Okay, so maybe we should hire someone that knows how to run a business, or who can teach us’. And then slowly over time, the pieces start to come together,” says Lachy.

“What really kicks you into gear is when you start investing business money into stuff like business coaching, or other people that can pull you aside as mentors [who tell you], ‘You need to not train today, and instead you need to pay your taxes, or pay your tax fine, or pick up the phone and make sales, or do some marketing, bring in some leads’ – that sort of thing”.

Hear more insights from Raph and Lachy on transforming a business to generate positive cash flows on the My Business Podcast below:

‘Our fines were bigger than the tax bill’
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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