Whether you have 50 or 500 members, it doesn’t hurt to take a good look at the financial fitness of your box. Your idea of success may not be centered around high profits but the truth of the matter is if you’re not generating profits, you won’t be in business long. Here are three things to focus on in the new year to ensure your business will be around to see your members’ success.
1. Charge for the value of your product
You shouldn’t nickel and dime your members but you should be charging for the value of the product you provide. On average, financially successful boxes charge 30% more for their unlimited monthly memberships than their counterparts operating at a loss.
2. Don’t discount your product
In addition to charging more out of the gate, financially successful boxes rarely discount the original value of their memberships. Think you’re not guilty of this practice? Multiply your current member base by the value they should be paying for their membership type. Now look at the actual revenue received monthly from those same memberships. Surprised? On average, financially fit boxes earn 50% more revenue per member. Use your discounts sparingly.
3. Optimize your space
At this point, you are either in a lease or mortgage for your facility with a set monthly cost that isn’t changing anytime soon. But, the key to managing facility cost is not necessarily the cost of the facility, but how well you use the space. Financially fit boxes average 26 square feet per member. What does this mean? When you start to max out on class space, instead of moving to a larger facility, try adding more classes and class times. Adding more options throughout the day can give your current members the freedom to attend more classes that fit around their schedules and may also attract new members who can only attend at those times.
Financial fitness, whether it is your ultimate idea of success or not, is crucial to ensuring the existence of your business for the foreseeable future. For more insight on the state of the industry and maximizing efficiencies in your box, get your copy of our 2016 Affiliate Gym Benchmark Report.