“What has been the best budgetary change you’ve made for your business during the recession?”
Before the recession, I traveled all over the map to go from one client’s home to the next. I didn’t think much about travel expenses or the time and energy it took to get to my locations. I considered it a trade-off for charging a higher rate than most other trainers around the city.
After the change in the economy, my visits to the gas pump began to feel too frequent, and the wear on my vehicle started to cost me more in maintenance. Increasing the number of clients became a difficult solution, because the longer commutes resulted in my reserving 3 hours to work with a client for 1 hour. In addition, some of my clients who lived farther away were starting to talk about how the economy was affecting them and their expenses.
I decided to limit my coverage area to no more than 15 miles outside my ZIP code. This change allowed me to reduce my transportation costs and focus on recruiting and keeping clients who were more or less recession-proof (those who never questioned my training rates). This strategy also freed up my time so I could see more clients per day if I wanted to.
Initially, limiting my client base to local clients seemed counterintuitive; most other trainers were expanding their territory in order to recruit clients. However, the decision lowered my expenses and actually increased my “job security,” since I was able to focus on offering my services to a clientele who could afford them.
Delf Enriquez, CSCS ACSM Health/Fitness Specialist Studio City, California
In a challenging financial climate, reviewing your budget and expenses is certainly important. But if you are running your business properly to begin with, whatever changes you make will probably not make a significant difference. Although I understand the importance of managing expenses, I believe that the key to success is staying focused on growth, regardless of the economic environment.
In 2009, after 23 years of consistent top-line growth, our business was down 20%. We made a significant budgetary change to address this: We cut our retirement benefit by 50%. It was a difficult decision, but not as difficult as the alternative, which would have been to lay people off. Our staff understood the situation and they were grateful for our prudence—and thankful to still have 50% of the benefit! By the end of 2010, we were able to reinstate the full corporate match.
In challenging times, it is more important than ever to be creative with your marketing. In 2009, we started our charitable “Give Back” initiative. Instead of paying to participate in a group training program, clients made a donation to one of a number of charities we designated. We knew this initiative would be well received and would generate new traffic into our facility. It has been an unbelievable success! In addition to raising tens of thousands of dollars for charity, we have a whole new source of referrals for our core business: personal training.
The most important advice I can give is to never get complacent. Most of the changes you might make in tough times are things you should have been doing all along. Also very important is to stay focused on the long term, because recessions don’t last forever. If you make rash decisions—like running ridiculous “specials” to generate business—you will have a difficult time recovering when the economy gets better.
Bruce R. Burke Founder, One on One State College, Pennsylvania
In Canada, we’re fortunate that we aren’t experiencing a recession. However, our unemployment rates are up substantially, and people have been tightening their belts as a result of the doom and gloom we hear from around the world.
Most of my clients tend to be high earners, and many of them have been with me for several years. Though everything seems stable and my client load has remained steady, over the past year I’ve made forward-looking changes in two areas: my corporate presentation fees and advertising.
Corporate presentation fees. Large companies are willing to pay relatively large amounts to speakers if they can be assured that they will get value for the investment. In fact, I think they feel more confident hiring presenters who charge relatively high fees; they associate higher rates with people who are more successful, experienced and professional.
As I’ve steadily increased my fee for this part of my work, I’ve also steadily increased the value of my presentations by custom-fitting my talks to each group, providing handouts that are professionally designed and offering generous door prizes when appropriate. My email communication tells my contact person to expect that I’ll arrive at least 30 minutes early, and I follow up promptly with a thank-you email and my invoice.
When small companies, nonprofits or volunteer organizations are unable to meet my rate, I still manage to make it work. Depending on the topic of the presentation, I can often get a sponsor to cover my fee (or make up the difference between the fee and what the company can afford) and provide door prizes. If an organization that I admire has no budget at all and I can’t find a sponsor, I do the presentation for free rather than cut my rate.
Advertising. After many years of depending on referrals and word of mouth, I now occasionally pay for targeted advertising the way I did when I was starting out. Many of my clients live in a neighborhood that has its own widely read community newspaper. My business card–size advertisement there has brought me many clients and subsequent referrals. Because it’s a small newspaper, my ads are highly visible. It’s also a great investment because the newspaper is read specifically by my target market, and the cost of the advertising is very reasonable.
Barb Gormley Owner, CustomFit Personal Training Toronto
While many people focused on cutting costs during the recession, I did the opposite! Here’s what I did and why I did it.
1. A little over a year ago, the opportunity arose to expand our studio space within our existing location. With the number of Pilates instructors at our studio, we were “bursting at the seams” in our existing space. Though expansion was a financial risk during the downturn in the economy, we decided to double our space. This decision allowed us to increase our services, add equipment and become an approved Balanced Body® Pilates instructor training facility. We took the opportunity to also give the studio a fresh new look. All of this generated excitement among existing clientele and within the local community.
2. My staff and I also decided to deepen our training and education within the Pilates and fitness industry. Our entire staff completed the full CoreAlign® training with Balanced Body; then we purchased the equipment and added that program to our repertoire. I completed the 2-year Pilates Master Mentor Program with Pilates Elder Lolita San Miguel. Another staff member will be starting the same 2-year program with San Miguel next year.
3. Over the last 2 years we have actually expanded our advertising budget.
The positive uptrend in business in the year since the expansion has reinforced the investment we have made—as well as the investment of all our instructors in additional training and education.
Patricia Massey Welter, PMA®-CPT, Lolita San Miguel Pilates Master™ Owner/Head Pilates Instructor, Suncoast Pilates & Personal Training Studio Palm Harbor, Florida