5 Tips for Controlling Expenses
Running a gym is like running any business. Sure, health clubs may do more for the health and wellness of its members than a fast-food restaurant or vape shop, but in the end, they are all in the same boat when it comes to building and growing a successful business.
While most gym owners focus on money coming in, they may lose sight of what they are spending. However, to be successful, it is key to understand how to keep expenses down while still operating a successful health club.
Here are 5 tips on how gyms can stay on top of their expenses so they can hold onto more of their hard-earned revenue.
1. Monitor your spending
It may sound simple, but gym owners wear many hats. Perhaps you’re jumping in to teach a class or work the front desk in a pinch. Or you could be out scouting a new location or attending a meeting with a potential corporate client. Or just doing your daily routine of walking the club and checking in with staff and members. With all that to do, it is easy to lose track of how much money your fitness facility is spending on a daily, weekly, or monthly basis. If you aren’t keeping an eye on your spending, you could be racking up unnecessary bills.
It’s easy to use your business credit card, debit card, or checks to cover small expenses. But over time, the small expenses add up. If you don’t keep an eye on your spending, you could be fitted with a sizeable bill that you aren’t prepared for.
Monitoring and tracking your expenses, be it with pen and paper or through accounting software, will make it easy to know just where your business is spending and how much.
2. Stay on top of due dates
While autopay has made life easier for both payer and payee if you don’t know when your bills are due, you might not have enough cash on hand to cover them. And not having money to cover bills when due can set you back with late fees, added interest, and your business credit, and can ruin relationships with vendors.
3. Staffing Costs
One of the largest—and depending on the size of your business, often the largest—expense for most health clubs is payroll.
Having department heads track usage patterns of members by each hour of the day, by each day of the week and by each month of the year can help reign in unnecessary payroll expenses. By knowing usage patterns, gym owners can adjust their mix of full-time vs. part-time employees, eliminate a part-time position if necessary, or outsource or bring in-house certain employee functions, such as housekeeping, maintenance, and other roles. This can help reduce not only hourly or salary expenses and benefits, but reduce wasteful over time, all while ensuring staff levels are in-line with the needs of the members.
4. Utility Expenses
Other large expense categories include telephone, technology infrastructure, and utilities. Local utility companies will often perform free audits of a health club’s systems and ensure proper classifications of the bill. There are also possibilities for gym owners to invest in energy-saving devices, partially underwritten by energy company rebates not only by cutting costs, but allowing them to operate in a “greener” way as well.
5. Equipment Upkeep
Repair and maintenance is an expense that is difficult for many health club owners to track and control. Because repair costs add up quickly, reduce the cost by tracking each piece of equipment, making the replacement vs. repair decision in a timelier fashion. Also, adhering to a schedule of more regular preventative maintenance on all equipment and shifting the burden of fitness equipment repair costs to manufacturers through warranties can help gyms save money on equipment upkeep costs. Even before buying equipment, utilize buying groups to lower the cost of equipment and negotiate longer warranty periods with manufacturers so you won’t have to spend on repairs until later in the product lifecycle (when you may be ready to trade in your equipment for newer models instead of repairing it).
While every business faces expenses, managing them is key to taking your gym to the next level. If you want some help in implementing operational efficiencies and budgeting for success, reach out to us today and let one of your health club experts help you reach your goals.