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WHAT’S THE BIG DEAL ABOUT NUMBERS?

Statistics reveal the quality of a club’s business practices.

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BY MICHAEL SCOTT SCUDDER

teacher of mine once said,

What’s The Big Deal About

ness practices are sound, your numbers will be too.” In my three-decades-long career in thi “sN industry, I’ve had some great boss- um and substance of your practic s. If your business practices ar numbers will be too.”

A

A teacher of mine once said,

umbe s in busine s represent the es, s partners and associates. They were great because each one of them under- stood numbers. I quickly learned from them how to analyze a business by looking at its numbers.

so

Management Education & Training Online (CMETO) 2009 Mid- Year Fitness

Facilities Results Survey for

North America. I believe that the over 1,450 club respons-

I recently completed the Club

Management Education & Training Online (CMETO) 2009 Mid-Year Fitness Facilities Results Survey for North America. I believe that the over sin 1gle-most comprehensive take on ingle-most compr hensive take on our industry at present. Let me share some of the numbers with you. You can determine what they mean to your Of the respondents, only 7.2% have what I would call “strong businesses.” That is they have seen increases in at least four of the follo “wing areas (for the fi rst half of 2009 compared to the fi rst half of 2008):

es represent the

,450 club responses represent the ou sr industry at present. Let me share some of the numbers with you. You can determine what they mean to your business. business.

Of the respond what I would ca

ts, only 7.2% have strong bu inesses.”

That is they have seen increas s in at

      ancillary revenues

retention

• net profit margins •

An •other 17% of responses warrant “steady/okay operations” in report- ing two or three increases in these “steady/okay operations” in reporting two or three increases in these opera- tSio, predictably, only just over 24% creases in more than one category.

Another 17% of re ponses warrant operational categories and no serious decreases in more than o e category.

onal categories and no serious de- of North American clubs are on solid footing going into the second half of the year.

of Nor he year.

So, predictably, only just over 24% Clubs that are deemed “doubtful operations” (declines in four or more

American clubs are on solid

foo ng going into the second half of cat tegories) number only 3.3%.

first half of 2009 compared to the first half of 2008):

• new membership sales •

membership sales drop and attrition w itnh declines in two or three c tegories.

re operating at breakeven or a loss, North American fi tness facilities are on the brink of disaster. This is corrobo-

east four of the following areas (for the rated by the fact that an average of just 37% of clubs showed higher fi rst-half

e in deep trouble and possibly will fi rst-half net profi ts. The ba ance (18%)

of 8,000 fitnes businesses by the end of next year.

ancillary revenues percentage member retention decreased by 29%. About 19% stayed roughly the same in b new sales, and 24% stayed the same in retention. Roughly 50% of all

nights?

How does your business stack up? Are you in line with the “good num- bers” or the “ba numbers?” Are your usiness pr ctices rew rding you

New membership sales increased for an average 21% of clubs, while

Ancillary sales (training, programs, child care, food and beverage, etc.) av- eraged below 20% of gross revenues in nearly all categories – far below a sus- tainable minimum, especially when Another 23.3% show as “very weak” creases. Nearly 11% of all facilities aAgain, predicta ly, almost 27% of and 20% are operating with net profits of below 5%.

Overall, one-quarter of 35,000 c ubs ne atr profi ts and 45% reported lower

not recover. We could well see the loss report net profi ts the same as last year’s fi rst half.

, your

this industry, I’ve had some great boss- es, partners and associates. They were great because each one of them under- stood numbers. I quickly learned from them how to analyze a business by looking at its numbers.

In my three-decades-long career in I recently completed the Club

Numbers? Statistics reveal the quality of a

club’s business practices. by Michael Scott S udder

“Numbers in business repre- sent the sum and substance of your practices. If your busi-

Clubs that are deemed “doubtful op-

erations” (declines in four or more cat- egories) number only 3.3%.

Another 23.3% show as “very

weak” with declines in two or three categories.

Again, predictably, almost 27% of

North American fitness facilities are on the brink of disaster. This is corrobo- rated by the fact that an average of just 37% of clubs showed higher first-half net profits and 45% reported lower first-half net profits. The balance (18%) report net profits the same as last year’s first half.

New membership sales increased

for an average 21% of clubs, while member retention decreased for an 29%. About 19% stayed roughly the same in new sales, and 24% stayed the same in retention. Roughly 50% of all clubs reported lower new membership sales, and 57% of clubs showed lower retention.

Internet-based consulting and training service specializing in delivery of edu- cational webinars, management train- ing and club consulting. Contact him at 505-514-0294, on Skype at michael. scott.scudder or at michaelscottscud- der@yahoo.com.

###

membership sales drop and attrition increases. Nearly 11% of all facilities are operating at breakeven or a loss, and 20% are operating with net profi ts of below 5%. Overall, one-quarter of 35,000 clubs

are in deep trouble and possibly will not recover. We could well see the loss of 8,000 fi tness businesses by the end of next year. How does your business stack up?

Are you in line with the “good num- bers” or the “bad numbers?” Are your business practices rewarding you now or causing you frequent sleepless nights?

now or causing you frequent sleepless clubs reported lower new membership sales, and 57% of clubs showed lower retention.

Ancillary sales (training, programs, child care, food and beverage, etc.) Management Education & T aining Online (CMETO), a industry’s leading

Michael Scott Scudder operates Club averaged below 20% of gross revenues in nearly all categories – far below a sustainable minimum, especially when

Michael Scott Scudder operates Club

      

September/October 2009 Fitness Business Canada 11

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