Running a business can be both the best and most challenging endeavour many people will ever know. To be successful requires a wide range of skills and knowledge.
We’ll be focusing on the latter. Most owners know their profit, sales and expenses. Have processes in place for managing cash flow, but for some it ends there. A deeper look into your membership and financial data not only gives you a more accurate understanding of your current position but also your likely future one.
Current Membership Base
Current membership numbers are often a badge of honor for many Gym owners, a testament to the blood, sweat and tears they have poured into their business. Yet as feel good as this statistic can be it has the potential to easily mislead.
A more relevant question is what breakdown of memberships do you have? Are these short term members, inactive concession cards, low profit enticements or long term revenue streams? How many members are on a hold or free time and are they counting towards your total? Concession cards without a time limit especially can quickly artificially inflate your membership numbers, while a large number of Paid in Full’s means a lower ongoing revenue stream.
None of the above are necessarily bad but not being aware of them can cause you to make less optimal choices about important decisions.
Future Membership Base
You should also look to the future. How many members are expiring in the next month, three months, six months? What retention rate do you have currently and have you refined your policies regarding retaining members? If you have personal trainers do you monitor their performance, are they driving members to your facility or away from it?
In the same vein how many leads do you have in the pipeline and how many do you have coming in on a monthly basis. What conversion rates do you have and what is the timeframe they are likely to convert in. Do you have a promotion coming up, will you need one? What promotions have been the most successful for you. Do you have statistics on radio vs newsprint, five day passes vs 50% off for 3 months.
Both of the above will directly affect your future membership base and are important for knowing whether to tighten your belt or bring on more staff to meet demand.
While some of the above questions may not apply, it’s well worth your time to dig a little deeper and get a better picture of both where you are and where you are headed.