Gym owners across Australia know that health and fitness is very competitive business. If you’re serious about outplaying and outlasting your competition, you need to get savvy about critical business performance indicators like cash flow. Here, our experts explain why understanding cash flow is your key to growing your fitness business and leaving your competition behind you.
Your gym’s financial health depends on cash flow
When it comes to your gym’s financial health, it may surprise you to know that the way cash flows through your gym is just as critical as the number of dollars you’re turning over. For example, if you were to receive all of your membership fees on the last day of the year, how would you pay all of the expenses that popped up every day before you got paid? Cash flow is just one reason why it’s really impractical for gym owners to collect all of their members’ fees on the same day. You need cash to flow into your gym every day that you operate so that you can pay your operating expenses and outlast your competition.
Cash flow forecasting will improve your business acumen
As a successful fitness professional, you already understand the importance of setting goals and working hard to achieve those goals. Similarly, one of the best ways to strengthen your gym’s cash flow position, and improve your business acumen at the same time, is to conduct regular cash flow forecasts. The purpose of your cash flow forecast is to predict how much cash will flow in and out of your gym during the coming month. Your forecast will reveal how much cash you have available for normal operating expenses (such as rent), investments (such as new facilities) and special projects (such as marketing campaigns).
After a few months of forecasting your cash flow you will get better at predicting things like sales peaks and seasonal trends in your industry. This expert knowledge will help you to make quality business decisions so that you can outplay and outlast your competitors.
Understanding cash flow will help you to sell more
There’s one thing better than achieving your business goals: exceeding your goals! One way to consistently outperform your cash flow forecast each month is to create additional opportunities for your members to buy more products and services from you – in addition to their regular membership fee – more often. You can do this by creating opportunities for your members to buy from you anytime, anywhere – online. How would the cash flow situation in your gym be improved if you could sell your products and services to your members 24 hours a day, 365 days a year?
In our article about the top three must-haves in gym member management software we highlighted the competitive benefits of gym management software that can automatically send SMS and email communication that’s based on a member’s behaviour – such as automatically reminding them of a booking, thanking them for their loyalty or wishing them happy birthday.Consider how this same software could be used to offer additional relevant products and services to your existing membership base. For example – you could email an exclusive offer of limited edition event merchandise to everyone who attended a special fitness event at your gym. Your members will be far more likely to buy the merchandise if the fitness event is still fresh in their minds and they can purchase on the spot, online via credit card or BPay. Regular add-on offers such as these are a sure strategy to getting more cash in the door, more often.