Profit Centers and Cost Centers
Carefully interpreted survey results can provide useful information about where the money is.
As you read earlier this year in IDEA Health & Fitness Source, wages/ salaries for most fitness staff increased over the past 2 years. A similar comparison for revenues and expenses indicates that for the fitness business as a whole, and group fitness in particular, revenues have gone down since the year 2000—but so have expenses. On the other hand, both revenues and expenses have increased for the personal training side of the business.
When kept in perspective, survey figures can help benchmark the industry. However, there are a number of things to consider when interpreting the numbers. One problem with collecting financial information is that businesses account for dollars differently, so figures may represent some apple-and-orange comparisons. Also, some managers who responded to the survey may know only a part of their facilities’ total financial picture. Finally, because IDEA’s membership comprises a wide array of business models, “averages” can be deceiving. Members include huge city parks and recreation departments, as well as 75-square-foot training gyms. The range between a minimum and maximum number for a given response can be vast. For example, revenues varied from $200,000 to $16 million! (Whoever reported $16 million, please contact me so I can report on your best practices!) To get a truer picture of the membership as a whole, let’s focus instead on the most frequently reported number, or mode; and the midpoint number, or median (which 50% of respondents are over and 50% are under).
Keeping those issues in mind, what can we glean from the figures? One thing is clear: For most facilities, personal training is a profit center that pays for the expenses of the group fitness program—which is often wildly popular, but doesn’t show a profit because it is “free” to members (included in membership dues). To see the number of facilities that charge “a la carte” for their programs, refer to the October 2002 issue of IDEA Fitness Manager.
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These statistics from the 2002 IDEA Fitness Programs & Equipment Survey provide an overall picture of IDEA’s membership base.
- 69% charge a membership fee to access their facilities.
- 58% sell products or have a pro shop.
- 67% of clients stay with the business 1 year or longer.
IDEA Fitness Facility Industry Benchmarks, Resource Series book. Gives programs and compensation survey information from 2000.
IDEA Fitness Industry Compensation Survey, Resource Series book. Provides compensation data, plus comparisons for 1998, 2000 and 2002.
“2002 IDEA Fitness Industry Compensation Survey,” IDEA Health & Fitness Source, January 2003.
“2002 IDEA Fitness Programs & Equipment Survey,” IDEA Fitness Manager, October 2002.
Visit the Pro Shop at www.ideafit.com, or call IDEA member services at (800) 999-4332, ext. 7, or (858) 535-8979, ext. 7.
© 2003 by IDEA Health & Fitness Inc. All rights reserved. Reproduction without permission is strictly prohibited.
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