Let’s talk gym financials…
Ever seem like people join your gym but there’s no real growth? Or the new revenue doesn’t make a dent on your ability to pay yourself or profit?
It might be because you’re not running your gym based on profitable numbers.
I remember opening my gym in 2012 and telling people I charged $120/month for a gym membership. This was in 2012 and people lost their minds.
“What!? That’s way too expensive.”
I knew this was what other gym owners were charging so I went with it and for a while, it all worked out.
But then…as I grew, I got distracted.
I started to fall into what I like to call the “big gym, big growth” phenomenon.
Members would tell me, “I’m going to another gym because I want a 7:00 pm class time.” or “I wish we had a noon class.”
So what would I do? I’d add class times, which meant more payroll each month. But what I didn’t do was adjust my prices. I added more service but kept my prices the same. Big mistake.
A lot of gym owners did this. Some of us are still running pretty expensive gyms and not making enough to break even, let alone profit.
One of my clients and I just did a financial audit of his gym. I do this will all my clients to get to the root of why they’re not profitable.
What we found out was pretty wild…
He was spending 80% of his operating expenses to run his group fitness program, only to generate 20% of his revenue.
He hadn’t done the math with profitable numbers.
His class times, team and space had gotten so big and expensive. He thought he was growing. But really he was slowly killing his profit margins.
He was optimistic about people enrolling into his new class times. “If I build it they will come.” But he provided the service before knowing if it had enough profitable demand.
So we started working backward and found that given his capacity now (meaning: social distancing guidelines) and his operating costs… he needed to increase his prices to break even or downsize his class times/team.
Those are the 3 key indicators of profit:
2. Operating Expenses
Knowing how to work these key numbers will catapult your business success.
Which makes more sense? Running 1 class at 12-15 people or running 3 classes at 2-4 people? One is highly efficient the other is very costly.
This is the kind of information you need to evaluate before you start adding more and “growing more.”
You shouldn’t just add classes just to add classes.
Our industry is notorious for adding classes just to add classes. But we have to look at the numbers, always.
The trick is to only add classes when you’ve maxed out class times.
Now, I know what you’re thinking…
“But Chris what if not enough people want to go to the class times I have?”
Find more people who can attend those classes. Meaning, get better at lead generation & lead nurture.
What are your profitable numbers?
What should you be charging to be profitable?
How much does it take to run each class?
How are you factoring the hours of work for “off the floor” coaching?
How are you pricing to create a hedge against not being at full capacity?
These are the question that will set you up to succeed.
Our coaching program is unlike any other. We don’t just throw you a cookie-cutter marketing strategy. We help you build and scale your brick & mortar gym efficiently and sustainably.
We focus on measuring true growth indicators. Running a FREE 6-week challenge, creating a ton of work, and attracting the wrong client is not our strategy.
That’s a bandaid and it results in spikes of revenue with no real sustainable growth.
If you’re ready to build a brick & mortar gym that can give you a professional salary, consistent profit, and lifestyle freedom…apply to work with us.
Want to see our video/podcast episode on this? Check them out here: