If your gym has been forced to close due to the Coronavirus outbreak, get this 4-step action plan immediately.
In just 20 minutes you’ll know exactly how to maximize your cash flow, while minimizing any damage.
Please share this post with as many gym owners, personal trainers & club owners as possible.
Let’s pull together as an industry and help each other out.
Gym Closure Action Plan
Its likely that gyms in the UK and USA will be asked to close, for at least one month, in the coming days.
This is not confirmed as of writing this (on Saturday 14th March) – however this rule has already been enforced in many European countries.
The foundational step is for you to step into your leadership.
Whether or not you believe the situation is ‘overblown’, the reality is your clients are feeling uncertain.
So first of all address your team, and your clients with a public statement.
Record a video or livestream letting them know you’re aware of the situation, and you have measures in place to continue their results & experience with minimum disruption.
Your audience will appreciate your leadership & being prepared.
Now into the 4 immediate steps to take, so you can maintain cashflow, and minimize churn rates to get through this period as smoothly as possible.
Listen to the Audio Version (23 Minutes) Below:
Step #1: Minimize Churn
Offer your clients an adaptive service that allows them to continue getting results, even from home.
This could be a Zoom / Skype webinar format where you will put a live workout on 2-3 times per day.
They’ll be able to tune in from home, and even get their kids involved (since schools could likely be closed too).
Consider the possibility you may have to slightly reduce your rates for a month or so, as you’re not providing the full service as usual.
That’s ok, as long as it keeps clients engaged and retaining for the long term.
Step #2: Upsells
What else could you offer as upsells or cross-sells during this time?
Could there be an opportunity for you to deliver mindset coaching, nutrition coaching, home equipment or even supplements or merchandise?
Every small sale helps at this point, because the key objective is to raise cashflow.
Step #3: Generate Operating Cash
The key to survival in hard economic times is having a bare minimum of 3 months’ operating cashflow in reserve.
Operating cash is the amount of money it costs to keep your business running & cover all the costs to break even each month.
So, for example if it costs £5,000 per month to pay your lease, cover all your costs, payroll, and pay your own salary, then your priority is to have at least £15,000 is “savings” money put aside in the business.
I’ve been telling any gym owner who’ll listen about the importance of saving at least 6-12 months of operating cash for many years.
This is because cash on hand is the best way to prevent a crises, and get you through a “bad month”.
(And a “bad month”, as I’ve said, is always coming…)
Now is that time we’ve been preparing for. Many fitpros on my business mentorship are well prepared and are able to navigate this economic challenge smoothly.
Many of them have heeded my advice and collected at least 6 months of operating cash reserves.
However, if you have not taken this advice, or you’re new to my content and didn’t know this was a key, then what can you do?
You must attempt to generate more upfront cash, while reducing in-efficient expenses as fast as possible.
Where can you cut un-necessary spending in your company?
Look through your previous month’s profit & loss statement, and analyze every cost carefully.
Could you cut out, or at least negotiate a lower temporary rate on your biggest outgoings?
Could you square a deal with your landlord to reduce rent?
Could you freeze a couple of memberships? What subscriptions and softwares are you paying for but getting no use from?
Again, every little helps here.
As well as cutting costs, its also important to generate more positive cashflow.
Consider offering a limited number of “Paid in Full” (PIF) offers to your top clients.
You likely have at least 10-20% of your client base who are sticking with you no matter what.
If you know they are going to commit anyway, you could let them know this situation has presented a rare opportunity for them.
Tell them honestly that you’d like to reserve extra cash as a business right now, and so you’d like to extend to them a one-off deal to get 3,6, or even 12 months of membership at a very special price, if they pay in full today.
For instance, instead of paying the usual rate of £100 per month for 3 months, could they get the next 3 months pre-paid for only £225?
If you sell just 5-10 deals like this you could have at least £3000-5000 in cash, which will at least give you a month or so of operating cashflow.
This means you can cover the costs of your rent & payroll until your gym is open again.
Note: Many “marketing gurus” will tell you its a bad idea to drop prices or give discounts. Ignore them.
Most of them have never run a real business and therefore don’t understand that cash is KING (or, as my mentor Yaseen puts it – “Cash is king, queen, Emporor and Dark Sith Lord of your business).
In other words, cash in the bank to keep your lights on is more important than your ego being stroked by keeping prices up and being positioned as “high ticket”.
Step #4: Personal Finances
Finally, could you be more frugal in your personal life?
One of the major reasons gym owners fail to make profits is because they’re taking too much money out of the company.
Its easy to get caught up buying liabilities like cars, fancy watches, luxury holidays and have overblown personal expenses.
However, this puts more stress on your company, as you demand a higher salary or dividend each month.
Its time to be more frugal, cut some costs and maybe live without expenses coffees & Netflix for a few months?
The less you can live comfortably on (and still feed your family of course), the more cash can remain in the business.
Take these steps to generate more cash, and minimize churn.
Remember its based on a foundation of leadership! Be the person that everyone trusts is calm and resilient, while everything else falls into uncertainty and panic.
Create the environment & energy of safety, certainty and sanity for your clients!
And finally… this experience will only develop you as an entrepreneur. You’re going to have to go through your first recession at some point.
Its a bit like being a virgin I guess… it’ll hurt the first time, but eventually you learn to ride it properly 😀
You got this! I am here for you – I’ve opened up my calendar schedule more than usual to help any gym owners or fitpros who need some support or guidance.
You can contact me personally on WhatsApp (I answer every single message): 00357 9680 6626 <<
Join our FB community of gym owners HERE <<
Or follow me on Facebook HERE <<
Additional Support & Resources
Here are some other resources and support from trusted places in the industry:
Emergency Measures For Your Gym (Facebook Post) < Click Here
Free Coronavirus Resources for your Community from Alicia Streger << Click Here
Podcast: 3 Things Every Gym Owner Must Focus on For Sustainable Growth Through Hard Times << Click Here