Calculate Churn

There’s no doubt about it – your staff is what keeps your clients coming back. You and your people are the reason your members walk through your door each day instead of that big box gym down the street. But what keeps that door open? Money.

How many times do you get a first-time client walk in with little to no foundation? Do you turn them away? No way – you just start. You get the baseline recorded – weight, BMI, physical ability or weaknesses and it’s one rep at a time. Chances are that client is not going to turn into an Olympic athlete but they are going to live a better, healthier life because they took that first step towards fitness. You don’t need to be a financial expert to understand the foundation of operating a successful business and we don’t plan to turn you into one. Let’s get the baseline down, get a pulse on your finances and from there, it’s one rep at a time.

Revenue and Expenses: Your Nutrition and Exercise

Think of your revenue and expenses like your nutrition and exercise; inputs are equally as important as outputs and you have control over both. Also, like your nutrition and exercise, if you don’t record it, you tend to leave things out.

Step One: Record it in One Place

Keep everything recorded in one place. Whether this is in your software platform or on paper, write it down and make it a habit. Break it out by category and make sub-categories for both revenue and expenses. You don’t record your last leg day on the same line as your cardio tracking, so don’t do that to your finances.


  • Membership Revenue
  • Personal Training Revenue
  • Drop-In Revenue
  • Retail/Merchandise Revenue
  • Events and Camp Revenue
  • Other Revenue


  • Rent/Mortgage
  • Payroll
  • Utilities and Building Expense
  • Equipment
  • Certification or Professional Fees
  • Marketing Expenses
  • All Other Expenses
Step Two: Establish a Timeframe

For your numbers to make sense, we need to make sure they are apples to apples. You don’t compare your quick sprint times to your long-distance times so again, don’t do that with your finances. As most of your revenue and expenses are monthly – rent, utilities, monthly memberships – let’s stick with that. This may mean you need to adjust some of the numbers you wrote down previously. For example, if you pay your employees twice a month, make sure you are recording both of those amounts together. Conversely, if someone buys a six-month membership, divide that revenue equally over the next six months.

Step Three: Measure Your Baseline

Now that you have your revenue and expenses in one place and broken out in a comparable timeframe, where do you stand? Go ahead and look down at that scale. Take your monthly revenue less your monthly expenses – if that number is positive, you’re on the right track. If it’s not, let’s get there. Your breakeven point is the amount of revenue you need to cover your total expenses – net income of zero. If your net income is less than zero there are two ways to approach it, increase revenue or decrease expenses. These are not mutually exclusive concepts but to start, you need a focus. Similarly, if your net income is greater than zero, you’re not done. Just because you are at your goal weight or just hit a personal best doesn’t mean you can’t improve. Whether you are in a good place right now and just want to get better or you recognize that something needs to be done now you know what you are measuring against.

So, like you tell your members, start. Record it, put it into meaningful terms and figure out your baseline. The next step will be to determine where you go from here. Do you want to maintain, gain (revenue) or lose (expenses)? Keep an eye out for our next blog in the series Business Finances: Ways to Maintain, Gain or Lose for some ideas on how to manage your finances. We’ll give you suggestions but it is up to you to determine what is right for your business and act.

It’s important to track expenses like rent/mortgage and payroll, but wouldn’t it be helpful to get insight into what other fitness studios are spending on these items? Now you can. Get your copy of our Boutique Benchmark Report for the most detailed financial performance data available in the boutique fitness industry.
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