CFP Business & Financial Management Flashcards

A fitness business owner wants to expand by hiring a second trainer. Which factor MOST directly determines whether the business can support that hire?

Answer: Current client roster size and projected revenue

Sufficient client volume and revenue must exist to cover the additional payroll costs before hiring a second trainer is financially viable.

Which document outlines a fitness business's long-term goals, target market, competitive analysis, and revenue strategy?

Answer: Business plan

A business plan is the foundational strategic document covering market analysis, financial projections, and growth objectives.

A CFP accepts cash payments and fails to report them on taxes. Which risk does this create?

Answer: IRS audit, penalties, and potential criminal charges for tax evasion

Unreported income constitutes tax fraud, exposing the trainer to IRS audits, substantial fines, and possible criminal prosecution.

A fitness professional wants to protect their brand name and logo. Which intellectual property protection should they pursue?

Answer: Trademark

A trademark protects brand names, logos, and slogans that distinguish a business's services in the marketplace.

Which payment processing practice helps a CFP reduce the risk of unpaid sessions?

Answer: Requiring pre-payment or a card on file before each session

Pre-payment or storing a payment method on file ensures funds are collected before services are rendered, eliminating collection problems.

A CFP's gym membership revenue drops 15% year-over-year. Which business response is MOST appropriate first?

Answer: Conduct a client satisfaction survey and competitive market analysis

Analyzing client feedback and market conditions helps identify the root cause of the revenue decline before implementing corrective action.