More often than not, fitness and health clubs struggle to make use with a limited budget. This is why it is essential, especially for new clubs, to account for every dollar that comes in and out of your business.
In the beginning, a club owner will have to spend a massive amount of money, on equipment, staff, personal trainers, management software and other essential things to running a club. At this stage, if you are a club owner, you are probably operating at a loss. But the expenses don’t stop there. You have to pay monthly salaries to employees and independent contractors, rent, electricity, water and maintenance bills. And you always need to have an emergency budget ready at a moment’s notice in case of an equipment breakdown. Payment for these factors cannot be deferred, and they represent a struggle even for the experienced club owners.
These are just some of the reasons why you need a good cash flow to survive in this business. Here are some ways to help you improve it:
1.Have an on time collection procedure. Utilizing a gym membership management system like Visual ClubMate will help you know exactly when your members are set to pay you, which of them are about to go into default. Don’t let you hard earned dollars get away just because you can’t keep track of when you should get paid. This is the best way to make sure that your business will keep growing.
2.Cut down your costs. There’s always a way to save some money by cutting down your expenses, like the electricity bill for example. If your facility is not opened 24 hours per day, or you have wide gaps of down time throughout the day, you can turn off non-essential equipment when no one is using them. The same goes for heaters or air-conditioning units.
3.Offer promotions. These are a great way to secure payments in advance from you members. Promotions such as “get 3 months for the price of 2” will help you quickly increase your cash flow and, with such a generous discount, member retention as well.
4.Offer discounts. Discounts are another great way to improve your cash flow. Giving your members a 5% discount for renewing their membership before it expires will keep them happy and at your gym. This is also a great strategy for owners who have just opened their gyms.
5.Pay taxes on time. Yes, taxes will drain money from your account but you should always pay them before they are due. Otherwise you run the risk of paying penalties, which means more money out of your pocket.