One third of businesses fail within the first two years. Make sure yours isn’t one of them.
I attended the Zen Planner “Zen Academy: Chicago” event, yesterday. I want to share what was presented to us in hopes that this too can help you understand the health of your fitness business. While. I did know the information presented regarding how to structure a healthy business, I did learned how to navigate Zen Planner. I received login information and created an account. Following along and learning about the features Zen Planner has, sparked ideas and I noted the things I want to implement for the gym based on the easy navigation and setup within the system. Once I familiarize myself on Zen Planner and test out my ideas, I will create a blog post sharing more about the platform and if the strategies I applied are indeed beneficial. Until then, continue reading about what Chris Wayne, owner of Nexus Fitness, and Zen Planner presented.
Understanding The Health Of Your Business
1.Revenue and Expenses
First, know where you are spending your money and identify the source of incoming revenue. Really familiarize yourself with these and make it a habit to sit down monthly to look over incoming and outgoing money. Below are examples of where funds are distributed in each category.
Rent/ Mortgage + Utilities
Specialty Services (massage, boomstick, hypervolt therapy, etc.)
New Business Tip: Value Based Pricing
Remember, it’s easier to down-market than up-market. Your gym/ studio will have a more fluid transition with price adjustments if your business decreases the price per services, versus raising. Sure, your reasons for justifying the price may be viable, but not all members may share this belief, and thus decide to terminate services and switch fitness studios.
To take this a step further or guide you on setting a price point, think about where/ how you can add value. Then, determine pricing based on those factors.
For most businesses, payroll is a large expense. No matter the size or age of the business, audit every employee. Make sure the staff is indeed contributing to the business. If there is anyone inadequately performing, perhaps it is time to eliminate their involvement. Second, when performing an audit ask yourself this- “am I making the most out of my staff’s time?” Be sure everyone’s strengths, skills, and passions are being utilized. See how they spend their time and which tasks consume the most. If anything can be automated or condensed, create a plan to decrease time on a task and reallocate it to other projects.
“It costs up to 5 times more to win a new member than to keep an existing one”. So, make sure you know how to keep your members- and keep them happy. In order for this to be feasible, you must understand your membership base. How many active members are there? How many people have dropped you? It is important to look at these numbers often. For a monthly comparison and mechanism to easily track these analytics, use the “churn rate formula”, below.
Churn Rate Formula
Take the number of members at the beginning of the month and subtract it by the number of members at the end of the month. Use that total and then divide by the total number of members.
Another key fact in retaining members is knowing how and where marketing dollars are spent. The great thing about marketing is everything (and I mean everything) can be tracked. Each week analyze social media. Instagram and Facebook provide in- app reports, allowing for every user setup as a business account to access analytics specific to your account. For boosted posts/ paid ads, review the performance. Make sure the type or ad is generating a ROI (return on investment). If it isn’t, use the research to determine why. Find the patterns. For things not bringing an ROI and reallocate those funds to a project or program succeeding based on the previous analytical research performed. Knowing how to distribute funds is essential for you business’ health.
Member engagement is crucial in retention. You need members, not the other way around. Information is accessible 24/7 on the internet. Someone could easily look up a free kettlebell workout on YouTube and follow along with that trainer’s plan- but they didn’t. Those members chose you and continue to choose you each and every time they walk through the door. Onboarding members is one thing- keeping them is another. Make sure your staff/ business makes a good first impression. You can never have a second first impression- so make it right. Be sure to listen to the member- engage with them and let them know this isn’t just another gym or yoga studio. This is a community and they are welcome here. Follow up with potential and existing members regularly. Go outside of automated emails and personalize it. Take a moment to invest in them, because they’ve already invested in you. It won’t kill the staff to pause and engage with the community. Community engagement may look different for each studio or gym, however the best ones all have this in common: happy and involved members. Below are a few ideas to cultivate a community.
Cultivate your fitness community
Form a private Facebook group where members can join to engage with other gym members.
Host free community events where members can meet those who attend different class times. Speaking from personal experience, anything with food has proven to be a hit!
Send a card.
Remember personal details when shared. Make it a point to listen and follow up with them about what was shared.
Look up from the screens. Even if you’re in the office, mingle with the members. Offering a smile is simple, yet appreciated and thoughtful.
3. Missed payments
Are you aware of the money you aren’t collecting each month? Zen Planner makes it easy to access this information, hassle free. It is important as a business to be aware of any/ all past due payment reports. Are you aware of when each member’s credit card expires and how many currently expired cards are on file? Any amount of time spent tracking down money is too much. Let Zen Planner automate billing, so you don’t have to. Zen Planner is launching a full service billing system where they will focus on obtaining payment from members, so you and your staff don’t have to.
The key to growth: listen. improve. leverage.
This post is not sponsored by Zen Planner. All opinions are my own.