Over the last three issues, this column has followed the story of “Mark,” a former club trainer turned entrepreneur who opened his own facility in Smithville, USA, using $100,000 of his own money and $400,000 in investment capital from his brother-in-law, his parents and a personal training client. After struggling for two years to make ends meet and suffering a substantial loss in personal income, Mark entered the third year of his business with a corps of disgruntled investors,
a facility operating just under breakeven and
Most fitness facilities spend thousands of dollars on advertising in the hope of recruiting new members. Once a campaign is launched, if people don’t immediately start calling or
walking through the doors with their checkbooks in hand, everyone is disappointed. How do you get the results you are looking for? Follow these 10 guidelines.
Every facility follows a business model, which impacts all costs,
including salary levels. When looking at these figures, keep in mind how costs are associated with revenue. For example, it is simpler to
associate the cost of a personal trainer with the revenue of a session fee than it is to associate the cost of a fitness instructor with the revenue of a membership fee, which allows access to an entire facility. These cost-revenue associations may impact compensation.
What are your short- and long-term goals for the business?
How will you differentiate yourself from the competition?
What will your carrying costs be for the kind of facility you want?
How much will you need
to charge for memberships in order to meet your goals and net a profit? idea fitness manager/may 2001
idea fitness manager/may 2001 programs
How much equipment can fit into how much space at what cost?
a reality, though, can be quite a challenge.
How much space is needed? What kind of equipment will it take? Can the overall objectives be achieved within the designated budget? Many questions must be answered to successfully outfit and open a facility. This article presents a basic overview of how to gauge space and equipment needs for...
Average hours worked and compensation for the industry were reported in the January 2001 issue of IDEA Health & Fitness Source. These charts break down those results into regions. When looking at the numbers, consider that the region includes big cities and suburban areas, as well as small towns.
Each year business owners and managers in the fitness industry spend millions of dollars promoting their
facilities and trying to sell memberships. Every form of media is utilized
—television, radio, direct mail and so forth. And yet, when we ask those
customers who do end up joining our clubs how they heard about us, the number one answer in my many years of experience remains the same: word of mouth. Here’s what I hear: “My
sister is a member.” “My neighbor
encouraged me to join.” “My friend
at work brought me as a guest.”
In the last “Money” column (January 2001), I addressed what it takes to start a new fitness facility. As you may recall, I introduced “Mark,” a real-life entrepreneur who lives in “Smithville,” a fast-growing suburb on the U.S. East Coast. Despite my warnings, Mark opened a 10,000-square-foot club with $100,000 of his money and additional funds from investors. His competition was a slightly aging YMCA, a licensee of a popular fitness chain, an older racquets-based club and a small “ma and pa” operation.
There is nothing wrong with competing on price. However, if it’s not a part of your overall marketing strategy, then flirting with price concessions to win short-term business could indicate a dangerous trend for your business. Compete on value, rather than price. Use the following questions as springboards toward action.