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Create predictable revenue & profits for growth
In recent times, the fitness industry has seen rapid growth and rapid growth also brings with it more challenges. Something that has always been a challenge for gym and studio owners is the lack of predictability with revenue and profits. Our partner, Fitness Business Development Academy (FBDA) has seen a number of their clients go through this in the past and have the solution you need to help solve this problem.
Build a strong foundation
Growing your fitness business, or any business for that matter, hinges on one crucial factor: revenue. Without a steady cash flow, it is very difficult to expand and grow your fitness business. Most gym or studio owners find themselves trapped in the same cycle of challenges when it comes to bringing in steady income.
The key to success lies in establishing a well-thought-out pricing strategy right from the start. Your pricing strategy should take into account how much money you need your fitness business to make to:
- Pay you
- Pay staff
- Pay the business (i.e. retain profits earned)
- Pay all operating expenses like taxes
- Prepare for growth
By addressing these vital business components, you can focus on not only your fitness studio growth but also your business profits growing rapidly. Setting your pricing strategy with profitability in mind is the best way to ensure your fitness business is always successful. Nicky, the CEO of FBDA, has seen this multiple times in the past and has developed some great strategies to secure a strong financial foundation for your fitness business.
Moving to a Monthly Recurring Revenue Model
It can be tempting to attract new clients with a short 4-6 week trial program. However, the ultimate goal for any fitness business is to get more paying customers. Here lies the true aim for all fitness business owners - transitioning your trail clients into monthly recurring revenue (MRR). Simply put, MRR is money that your gym or studio is guaranteed to make every month - i.e. predictable income.
When executed correctly, you can not only predict your monthly income but can also build loyal communities and leverage your brand on a global scale. Shifting your clients from a sporadic one-time payment to an MRR model, you can take charge of your cash flows, bid farewell to the uncertainties of seasonal fluctuations and continue on your growth journey.
Track your gym or studio expenses
Managing your business finances involves two crucial aspects: revenue (what's coming in) and expenses (what's going out). While many fitness business owners prioritise revenue generation, they often overlook the critical importance of managing expenses effectively.
To achieve financial success, it's imperative to pay close attention to your expenses. A common mistake often made by smaller businesses is to observe what larger, financially stable ones are doing and attempt to replicate their strategies. This can be a perilous approach, potentially leading to financial ruin.
It is of paramount importance to stay focused on your unique path and play the game of business at the level that aligns with your current financial standing. A simple way to forecast your gym or studio’s cash flows is to use FBDA’s 40-40-20 Cash Flow Forecasting System. Their clients have found this to be a game changer, helping them to revolutionise the way they plan and visualise their financial future.
From “Just surviving mode” to “We’re thriving mode”
When you're looking to grow your fitness business, you want to make sure your cash flow is stable. This is the most critical and impactful aspect of your gym or studio transforming from survival mode to thriving mode.
Unstable cash flow can cause massive amounts of stress, hindering your ability to make sound business decisions. The stress caused by not knowing how much and when money is due will restrict the creative and problem-solving part of your brain and can prevent you from effectively solving other business problems.
FBDA can help you take back responsibility and unlock that problem-solving part of your brain by taking control of your gym or studio finances and continually improving your financial literacy. You can hire the right people to help with your accounts but no one else would be able to fully grasp how to use these insights to unlock the full potential of your gym or fitness studio.
If you find yourself worrying about your gym or studio cash flow and would like to help understand your business finances, FBDA is the right partner for you. They will help you identify the issue and help you craft a workable solution to create financial stability and growth for your gym or studio. Schedule a free discovery call with an expert FBDA coach today to unleash the true potential of your gym or studio.
For all our valuable customers and as part of our partnership with FBDA, we have also got exclusive access to FBDA’s 30-day Business Coaching Experience for free! This offer is valid for a limited time only so get your access today!
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