Is Your Gym’s Bank Balance Your Profit
I confess for the first few years I owned my club, my entire financial strategy was checking the bank balance on a Friday afternoon.
If there was cash in the account, we were having a good week. I felt confident, successful, and in control. If there wasn’t cash in the account, I panicked. I would immediately run a flash sale, discount our memberships, or push my team to sell more personal training packages just to cover the upcoming payroll.
I thought I was running a business. I was actually just managing cash flow.
And in the fitness industry, managing cash flow is a very dangerous game to play.
The Illusion of Top-Line Revenue
Many fitness business owners fall into the trap of focusing entirely on top-line revenue. They celebrate when sales are up 15% year-over-year, completely ignoring the fact that their operational costs might have increased by 20% in the same period.
When you run a business based on gut feel and or the daily bank balance, you are operating in the dark. You might know how much cash is coming in, but you have no idea how efficiently that money is moving through your business.
You cannot improve what you do not measure. And you cannot measure success if you are operating in a vacuum.
The Power of Fitness Industry Benchmarking
The turning point for me was sitting in a room with other successful fitness business owners and actually looking at their numbers.
I had always assumed my club was doing well. But when I opened my P&L and compared it to the P&Ls of my peers, I realised that what I thought was a “great” profit margin was actually well below the industry standard for top-tier clubs.
I didn’t know what “good” looked like, because I had nothing to benchmark my business against.
I was thrilled with a 10% margin, completely unaware that a club with the exact same model was more profitable. They weren’t working harder than I was; they were just operating more efficiently. They knew exactly which levers to pull because they were tracking the right fitness business metrics.
Turn the Lights On in Your Business
When you join a REX Roundtable, the guessing stops.
You stop managing cash flow and start managing a business. You look at real data. You benchmark your performance against 15 other highly successful CEOs who are outperforming you in specific areas. You find the inefficiencies that are hiding in plain sight, and you finally turn the lights on in your business.
Are you running your business on data, or gut feel?
If you are ready to stop operating in the dark and start building a highly profitable facility, you don’t have to figure it out alone.
We are currently interviewing owners for our June & July meetings. If you are ready to stop guessing and start building real value, send me a message directly. Tell me your biggest current challenge, and let’s see if there is a seat at the table for you.”
Apply Here ↓
Justin is the Managing Director of Active Management, which he began January 2004. He offers coaching to businesses worldwide in everything from start up and design to marketing and sales systems. Justin also facilitates four Australian and New Zealand ‘fitness industry roundtables’ events, which allows him to see a huge cross section of business models.