» Profitability


GROW YOUR BUSINESS


Improving your club’s profitability lets you offer a richer member experience


BY BILLY KATELNIKOFF


require an increased in- vestment to cover items like additional towels, in- creased wear and tear on equipment and increased staffing levels. You need to factor in these costs.


Measurement tip:


Compare the increase in memberships to mem- bership revenue and net income from operations.


2 Reduce the


exiting members Decreasing member


W


hen your business is profitable, it gives you the freedom to be more innovative and to ad-


vance your members’ experiences. Becoming profitable or increasing


your profitability can result from in- creasing sales, increasing the num- ber of members or streamlining your expenses. Every club has its own unique busi-


ness dynamics and personal situations which determine the best methods for profitable growth. Here are four key areas to consider.


28 Fitness Business Canada January/February 2014


obviously increases revenues for your club on an ongoing basis. However, you need to also consider


1 Increase your membership Growing your membership base


the cost of acquiring new members, the impact a larger membership will have on your existing membership base, and your club’s capacity. For example, how will members re-


act to the increasing size of the mem- bership? Will the weight room, locker rooms and group exercise classes be- come overcrowded? As well, adding more members may


attrition is a simple strat- egy that also needs to be factored in. Initiatives such as structuring member contracts for longer terms and add- ing member perks that are low cost but high value –such as monthly giveaways of club mer- chandise, and member discounts at complemen-


tary businesses–can be powerful tools for growth.


Measurement tip: Compare per-


centage of members contacted to num- ber of lost members. Also compare year over year.


3 Increase the average spend per member Offering ancillary services, like per-


sonal training and specialty classes, typically requires an upfront invest- ment of additional space or staff. However, evaluate your current


number of


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