Let’s face it – owning and running a fitness business is not for the faint of heart. The long hours, hard work, and constant pressure to bring in new clients and revenue can leave even the most dedicated gym owner feeling drained and frustrated. Yet, despite the challenges, many gym owners continue to push forward, driven by a desire to succeed and to make a real impact in their communities, because they love what they do.
At the end of the day, though, the main reason why most gym owners are in business or considering growing their gym is simple: to make money. It’s the career they’ve chosen. It’s how they provide for themselves and for their families. And up until now, they’ve been told that the only way to make more money is by getting more leads, getting more clients, and scaling up to multiple locations.
And while those things are important, and they can certainly help to grow a gym business and make more money, they aren’t the only means to those ends. You might even already know that they’re not the universal magic pill for growth they are often presented to be.
The point here is NOT to deter you from marketing and selling. Those things are essential and need to be done well.
The point here is to explore the possibility that there might be additional ways to make more money in the business. What if you could do it without having to add new clients or open a new location?
We’ve seen gyms leave a lot of money on the table by neglecting some of the basic systems that every gym uses. Amounts that added up to as much as 20% of their revenue, due to problems in three critical systems: how they price their services, how they pay themselves and how they make their time more valuable. These systems may fly under the radar, but it’s been shown that intentional improvement of them can have a significant impact on your earnings, often without requiring any additional resources or staff.
If you stop and think about it for a second, it makes complete sense. How could you NOT make more money if you’re nailing these three things?
- Charging what you’re worth
- Being smarter with how you pay yourself, and
- Making your time more valuable.
In this blog post, we’re going to challenge the conventional approach to gym growth and show you how optimizing these three systems can help you keep more of the money that’s already coming in. By the end, you’ll have a new perspective on how to increase your revenue, simplify your business, and achieve the success you’ve been working so hard to attain.
Optimizing 3 Crucial Fitness Business Systems
What you’ve been told:
Increasing your revenue involves scaling your business. That means you need to be getting more leads, more clients, and eventually opening multiple locations. This approach isn’t entirely wrong, but it’s not for everyone in every situation. At times it can create more problems than it solves. For example, simply getting more leads might require hiring more staff, needing to move into a bigger space, increasing session size, or even opening another location. While these all may seem great on the surface, or even be what you ultimately aspire for, they come with additional expenses you may not be able to afford and require additional skill sets that you may not have yet. Therefore, we think that it’s wise to consider an alternative approach to growing your business that may yield the same net result with less work.
What I want you to consider:
We’re here to tell you there’s another way. There are three systems that you already have, and by optimizing them, you can increase your revenue without having to add new clients or locations. Many gym owners are not intentional with these systems or aren’t even aware that they are systems, which causes them to leave money on the table. Here’s what you need to solve that problem and take home more of what you’re already making.
Fitness Business System #1: Pricing Your Services
The first system, and maybe the one we see that causes gym owners to leave the most money on the table, is Pricing Your Services. The biggest mistake is that gym owners are just not charging enough. Whether they haven’t raised their prices in years, or they are not priced appropriately for their position in their market, they are underearning.
Most of the time, the issue with pricing comes down to the gym owner’s mindset. This mindset can stem from not wanting to raise rates for a fear of losing clients, appearing greedy, or even not feeling confident enough in the value that they provide to their clients. Gym owners must have conviction that their services are valuable and that clients will pay what they are worth.
So, to state it as simply as possible, the solution to this problem is to charge more for your services. By increasing your prices, you can increase the amount of money you make without adding any new clients to your business. You just need a system for knowing how much you should charge, what the triggers are for needing to reevaluate your pricing and the process for communicating all of that to your team and your clients.
A price increase can happen on an annual basis, to account for inflation, when your rent is raised, because you’re investing in your team, getting new equipment — there are tons of these triggers that should cause you to stop and evaluate your pricing, but the bottom line is when your service is worth more (ESPECIALLY when it’s costing you more to deliver), you need to charge more. By optimizing how you price your services, you can increase your revenue without adding any additional clients or locations.
Fitness Business System #2: Your Compensation Plan
The second system that you need to improve in order to quit leaving money on the table is your Compensation Plan. Many gym owners struggle to find the right way to pay themselves which can lead to frustration, burnout or other serious issues. And for many gym owners, when they first get started, they’re so focused on growing the business that they don’t take the time to learn how they need to pay themselves as the owner. They end up investing most of their revenue back into the business. They may be investing in expensive equipment they don’t really need or upgrading their facility too early, but they back themselves into a corner with high operating costs. Then they pay themselves whatever is left over… which is typically way below market-based wage. The problem becomes compounded as they grow, because they don’t have a plan to pay themselves as revenue increases and they become profitable.
You need to be paying yourself a wage in your business that reflects the value that you’re bringing to your business. So list all the jobs you’re currently doing in your business that you could hire someone else to do and add up the total amount it would take to pay them all.
That is what you should be getting paid. That is how you take home more of what you’re already making.
Fitness Business System #3: Your Weekly Operating Routine
The third and final system that gym owners need to optimize to avoid letting money you’ve already earned walk out the door is their Weekly Operating Routine. By taking control of your time, and making it more productive, you make it more valuable. This is the easiest way to work fewer hours while making more money (sounds like a no-brainer, huh?). You can do that with a Weekly Operating Routine. It’s a consistent cadence for meeting, planning, reporting and managing yourself and your team.
(Pro tip: If you don’t have a staff yet, NOW is the time to implement this! It’s critical to get control of your time-management before you add staff.)
The weekly cycle enables constant communication and check-ins to ensure that everyone is involved in the constant forward progress of the business. Consider your Weekly Operating Routine to be the heartbeat of your business. A strong and consistent heart rate indicates good health.
This will help you stay on top of your monthly, yearly and quarterly priorities without having to micromanage your team. Having a weekly cadence ensures that you’re setting deadlines for action and communication on a manageable schedule to avoid procrastination and keep everyone on the team in sync.
As you can see, while the conventional approach to gym growth involves scaling up by getting more leads, clients, and opening multiple locations, it’s not the only way to make more money. If you want to take home more of the money you’re already making, you should consider optimizing those three critical systems. It’s important to also mention that by working on making your business more efficient and optimizing these three systems, you’ll be set up for even more long-term success if you eventually choose to go the more conventional route. Therefore, it’s an even better idea to consider this alternative path and start taking home more money from your business today.
Fitness Revolution helps fitness business owners build and scale successful businesses they love running. Through Strategic Business Coaching, powerful tools and metrics, and live training events, FR is able to help these studio owners tackle their biggest, most pressing challenge. For more information, visit https://frnation.com/.