5 reasons why gyms fail.
1. Too Much Debt
Too much debt is a killer for any business. Especially in the year 2020 I'd see gyms and clubs with unmanageable debt. Some debt like equipment and lease are justified, but we want to stay away from debt. This is the top reason that gyms close.
2. No Business Plan
Maybe you don't have it, maybe you don't follow it. Maybe you do have it, but you don't understand it. Not only do you want a business plan, you want to follow it and understand it.
3. Mismanaged Cashflow
Alot of clubs tend to have a tendency to think that they have alot of money, and when things start to go bad they say things like "Let's just keep going and this thing will get turned around." One saying that I like to suggest to manage cash flow is "You start every day from zero." We're starting everyday from scratch, don't operate like you got plenty of money in the bank and plenty of money sitting there.
Let's also make sure to have defined budgets, one of the things that I see working well for clubs that are trying to get on track is, depending on the size of the facility, is giving every department a budget. They'll have overheads, but they also have the expectation to produce themselves. Now, we have to teach them how to do this, how to produce a workflow or plan of actions, and how to generate revenue. But we want everybody producing, because at the end of the day when it comes to managing cashflow you need to have a positive balance. Sometimes it means making difficult decisions along the way. Alot of times you're not willing to make it, or be able to make it.
4. Ineffective Leadership
You're gonna have to be a leader. You're gonna have to guide this thing. You're gonna have to have regular meetings like, "Here's our numbers, there's where we need to be, here's where we at. We're gonna manage based on these projections. Here's our marketing plan-trying to get known by everybody in town. Here's our sales process, there's different ways we're gonna acquire revenue in our gym."
And we got a real plan here, and as a leader, you are following up with your employees. What they expect, what you expect, and making sure that these thing happen. And it's not as simple as, "here's an email now let's go do it. It's just not gonna work that way. We need stronger, more dynamic leadership. "It's never gonna be important to somebody else unless it's important to you." "It's not your words that make it important, it's your actions.
5. Failure To Adapt
What we see in the fitness industry is that the ones that win keep themselves as new today as the day they first opened. You want to constantly stay up to date on equipment, technology, on different things that happen, on ways of doing business, etc. Make sure you're constantly evolving and adapting. You're continuously reinventing the business. If we stay on the same old thing, the business is gonna pass you by and die out.
Recap
Take a look at these 5 reasons with a critical eye and ask yourself if you're falling victim to any of this.
