How To Get Your Studio Profitable And Growing Again During COVID-19
BY SEAN GREELEY, NPE FOUNDER & CEO
We’ve been through arguably the most damaging period of the fitness industry’s history. Studios and gyms have lost many clients and a lot of revenue. Everyone’s trying to figure out what to do next.
You may be questioning:
- Am I going to lose money?
- Will my clients ever come back?
- Will I just burn cash?
- Is it even worth it to try and rebuild my business?
The answer is YES… you CAN re-engineer a more profitable, high cash-flow fitness business.
But to do that you’ll need to reassess your business… and be willing to make changes. These changes might be small, or might require complete overhaul of everything in your business.
The fact is there IS still tremendous demand for fitness services in the market. People still want to lose weight, get stronger, look better, get out of pain, and more. And they’re willing to pay for support to solve their problems and achieve their goals.
It’s the way we deliver value to the client through our services offerings, how the business model is engineered to make a profit, and how you go to market with finding and signing up new clients that must evolve.
Let’s explore each of these further….
HOW DOES YOUR BUSINESS DELIVER VALUE TO THE CLIENT?
We measure value with an equation: Value = Client Experience + Relationships + Results
When you deliver great value to clients, price no longer becomes an issue. Because clients aren’t buying on price, they are paying for the great value they receive.
Client experience refers to the experience someone has at every ‘touch point’ with your business. What is their experience when they call you on the phone, walk in through your doors, interact with your team? All of these things (and more) contribute to their experience of doing business with you.
Relationships are also extremely important to clients. When they feel part of a community, connected to your team, to you, and have friends that they look forward to seeing, they receive something invaluable.
Results are about the transformation. That usually involves not just a physical transformation of some kind, but a mental and emotional one too. Fitness impacts every area of our life when it comes to our health, relationships, career and more. The more results we get, the more that spills over into every area of our lives.
All those add up to the value you provide your client. And they will pay premium prices for that value, which in turn means more profits for you.
HOW IS YOUR BUSINESS MODEL ENGINEERED TO MAKE A PROFIT?
Whether you want to serve clients online or offline, or through private, semi-private, or group delivery of services, there are lots of ways to make money and run a profitable business.
Profit is engineered by managing the numbers that drive your model. There are 7 questions you need to answer to start engineering more success:
1. What’s your model? Group, semi-private, private.
2. What’s your pricing and packaging? Program, commitment level, sessions per week, and weekly investment. This can be complicated and it’s important to get support in making decisions in this area of your business.
3. What are your gross profit margins? You need about 60-85%, depending on your model.
4. What are your income goals? How much do you want to earn? Not just take home pay, but consider the amount of profit that you’ll be required to reinvest in the business for continued growth and success.
5. What are your expenses? You need to know your cost structure, and the relationships between fixed and variable expenses.
6. What’s your average client value? How much money does each client bring in?
7. How many NET clients do you need to hit your goals? This is your most important number you need to know and focus on to succeed.
You can’t track seven numbers in your head at the same time.
But you can focus on ONE NUMBER (such as NET CLIENTS) that when you hit it… ensures your business works as planned and you achieve all your financial goals.
HOW WILL YOUR BUSINESS FIND AND SIGN UP NEW CLIENTS RIGHT NOW?
Think strategically. You don’t want to just “promote” your services with free trials or discounts. Instead, get clear on your ideal client. Get clear on the messaging and offer that will actually solve their problems. Educate prospects on how to solve a problem with content marketing. And inspire them with success stories.
Next, master your sales system so you’ll know how to communicate with your ideal client in an effective way. We teach the 7-step AUTO-CLOSER® Sales System that shows you how to lead conversations with prospects in a way that uncovers their needs and inspires them to commit to their goals.
Finally, you need to get some easy and inexpensive wins to drive in the right clients with:
- Networking (online & offline)
- Content marketing (education + offers)
- Public Speaking
- Bring a Friend Campaigns
- Advertising (online & offline)
- Partnerships (local business alliances)
- What else?
These strategies will start driving in the right clients you can help, with an upgraded business model that delivers more profits and cash flow.
Yes, the fitness industry has been through the wringer, but you can rebuild and grow a highly profitable fitness business with the right strategies, plan, and action steps.
The first key is to increase the value you deliver to your clients. Next, re-engineer your business model by answering the 7 questions to improve profitability.
Finally, stop discounting and using promos. Instead, think strategically about finding and signing up new clients – while also focusing on quick wins to get clients in the door right away.
No matter what disruptions have occurred in the fitness industry, people need your help now more than ever.
Deliver the value they need, engineer a profitable business model, and get a sales and marketing plan in place to attract great clients and help more people achieve their goals.