How to Clarify Your Vision as You Reinvest in Your Fitness Business
This information contained herein does not constitute financial, legal, or other professional advice and is meant to be used solely for informational purposes. It does not take into account your specific circumstances and should not be acted on without full understanding of your current situation, future, and/or objectives by a qualified professional. MINDBODY, Inc. assumes no liability for actions taken in reliance upon the information contained herein.
Congratulations! Despite the many challenges you’ve faced recently, you and your fitness business survived. That deserves a standing ovation, full stop.
Now what? If you find yourself looking ahead and wondering how to maximise your opportunities in the post-COVID era, you’re probably full of ideas but need capital to bring them to life.
Since borrowing money carries inherent risk, it’s important to have clear expectations for how your investment will create a positive return. If you’re simply borrowing to pay bills, and don’t have a specific plan to improve your bottom line, it may not be the right solution.
That said, I believe this is an extraordinary moment to reinvest in your fitness business. And as both a Certified Mindbody Consultant and CA Licenced Business Broker, I want to help. So, here are a few things to think through as you build confidence in your forecast.
Investing in your people?
Get really clear on what roles and responsibilities you need help with and know how each will grow your bottom line. Make sure you’re setting your team up for long-term success, too. Because staffing is a major issue for the fitness industry right now, think of incentives that make it worthwhile for your team—including front desk staff, managers, instructors, and personal trainers—to onboard (or come back). For example, health insurance, paid time off, and continuing education opportunities in the industry. The lifetime value of a good team, and the investment in building one, will compound.
Revamping your space?
Invite fresh eyes to give you feedback on your fitness facility and find ways to freshen it up. Whether it's redoing your signage or retail section, putting new flooring down, or adding a fresh coat of paint to your interior, even small investments can do wonders for business.
What about expanding? Look into local retail vacancies. Is the space next to you available? Is the landlord slightly desperate to get it rented? Think of the possibilities—what if you could get a deal on that space and were able to double your business? Don’t be afraid to ask and negotiate to your advantage.
Upgrading your equipment?
First, understand your utilisation rate. If you’re maxing out your most popular workout classes or time slots, and waitlists are common, an investment in additional fitness equipment could be the difference between maximising profit and leaving money on the table. Anticipate the need to replace your equipment, too. Don’t wait for things to break and cause a disruption. Take stock of your equipment regularly to stay ahead of potential issues.
Updating your technology?
Technology maximises efficiency for both your staff and clientele. Look at your day-to-day operations—is there technology you can invest in to help create a more seamless client experience and take the load off your team? As AI, or artificial intelligence, becomes more and more prolific across the industry, there are all kinds of opportunities to invest in things such as tablets for class check ins, or automated text messaging if calls are missed at your front desk. If there’s technology that allows your team to focus more time on clients and revenue-generating activities, it’s money well spent.
Investing in new revenue streams?
Are there complementary businesses or modalities you could add to your existing fitness studio or gym to boost your bottom line? Get specific with the revenue stream you want to add and consider how much it will cost, the time it will take to integrate, how much you’ll need to invest in marketing, and what you expect as a return. A SWOT analysis will help determine whether adding a new revenue stream makes sense.
Buying another business?
Know your strategy for growth. If adding locations is your goal, buying a business as opposed to starting from scratch might yield tremendous value. If you’ve started your fitness studio scratch, you know that the cost of a buildout is huge, and the time it takes to become profitable can easily be years. If you can buy a business for a fraction of that cost and expect to make it profitable within a couple of months, you might save yourself both time and money.
That said, you’ll need to be ready when the opportunity arises. Sellers are usually willing to make better deals if things can happen quickly.
If you’re dreaming about what’s next for your fitness studio, use these tips to clarify your vision and invest accordingly. There are so many possibilities for growth.