Key Business Metrics Every Gym Owner Should Track

Okay, so the next part of fitness business planning is to understand the key business metrics. Now I did touch on these very briefly in the goal setting module 1 segment, but I'm gonna get into a bit more detail into it here. So you may remember this from that section, we have our leads, so that the 5 key metrics of all businesses, and I'm gonna relate it directly to personal training and fitness. But at the top we've got our leads, right? So this is how many people are coming to see us. If this ultimately fails, any one of these, if there's a failure here, ultimately the system is not going to work. So leads, just increasing someone's leads, you're going to increase someone's total revenue and turnover. So starting off with leads, how many leads are we pouring into the machine? Then out of those leads, there are leads. Another word, a nice word to say prospects. We're going to have converting those prospects into an actual client, right? So that's going to be depending on our sales conversion rate. Now, certificate 2 in the fitness business program that we've got, that, that, that piece there, I mean, if we can impact and make meaningful impact on your conversion, you're going to make a lot more money, right? And I've seen this time over time is if we can get someone who's converting at 20% to 60%, well, you know, they're maximizing the amount of leads that that are coming in. They're not burning through this. And this is why when I'm working with fitness professionals and fitness businesses, I always like to, for a lot of the time, if they're already established, I like to start here because this one sometimes costs money, it costs effort. This one, you're already doing the work. So if you can improve this one, you're gonna see quite a substantial return on investment. So that's gonna determine from the leads, from the prospects, our conversion rates are gonna determine how many new clients are gonna come in. And then we've got our average dollar sale. So this is where if we can, value add and get better at sales, we can charge more for our time, we can sell more for the same time, and our average dollar sale goes up. And then if we can upsell people in terms of training more with us, let's say instead of going for the once a week package, they're now going for the twice or three times a week package or the four times a week package, they're going to be transacting with us a lot, a lot more, a lot more frequently for training more with us. And then, you know, profit margin slash expenses, if we minus that, from all of this, then we get basically our total revenue. So obviously turnover is the total thing, but then when you minus the expenses, you get your turnover. So if we look at this example here, right, and this is laying it out, and I know for a lot of you just starting out, this example is real simple. It's going to really make it hit home for you. And I'm going to just touch on some key things here. So let's say you're at a big box gym, right? Let's say you're at a big box gym. Say you're at a Good Life or a Fitness First, somewhere like this. And, you know, you've got 10 leads that come through, right? So either the fitness manager gives you 10 leads or you've walked the floor, which I highly recommend you do. You've spoken to 10 people. Let's say out of those 10 people you spoke to, 5 people booked an appointment with you. And out of those 5 people, you know, anyway, you did your session and you closed, you closed 20%, you closed at a 20% rate. Now I use 20% because it's the lowest rate I can think of, right? Like really, I think anyone can do 20%. It's kind of the bare-ass minimum. If you see 10 people, it doesn't matter how kind of bad you are, I think you'll at least close 20%, right? I have people close 60%, 80%. I never shoot for 100% ever. If you get 100%, fundamentally you're too cheap and you're charging too little and you need to increase your prices. There needs to be a point where people say no. I think 60-70% is kind of a sweet spot. If everyone says yes, fundamentally you're too cheap, right? You want people to object on price and you want to obviously be able to handle those objections, but that's what you're looking for. But let's just say again, in this example, being extremely conservative, 20%, you get out of 10 people, you get 2 new clients. Okay? So, and again, this number here, you see 10 people, you speak to 10 people, only 5 book the appointment. Out of those 5, you know, 10 sign up, let's say, or 2 sign up. The average dollar sale, I'm just going to use $100 per session because it's easy numbers right now. Again, you might be charging $50, $75, $60, $80, many variations of— I'm just going to use $100 because the numbers are simple, right? So average dollar sale is $100 per session per sale, right? The average transaction is they transact with you twice per week, which makes it $200. So training the average person trains with you twice per week, so it gives you $200. You just sold 2 people. If you times that $200 by 2, that gives you $400, right? So $400 here. Now we move to number 5, which is our expenses and profit margin. Let's just say it costs you $20 per session. Now, how to figure out the cost? Let's say you're paying $300 a week rent. If you figure out the operation hours, which is 6 AM or the hours you operate, if you, you know, 6 AM to let's say 6 PM, let's say it's 12 hours. You can take your weekly amount, you can figure it out. Let's just say per hour it costs you in terms of operation hours, $20 an hour, right, that you're there for the sessions that you service. So per client, if it costs you $20 to pay that rent, let's say in this example, if you're doing, if you're making $400, there's 4 sessions there. 4 times $20 is going to be $80. So it costs you $80 to basically take in that $400. That gives you $320 in terms of revenue. You've brought in $400, but yeah, you've taken home because there's expenses, there's the rent associated with that. Obviously there might be other expenses as well. As your business grows, there's going to be more expenses, but you've essentially taken home $320 clear. Um, and obviously, you know, tax and all that stuff, you've got to calculate as well. And obviously on that topic, I do recommend that you, you get a very good accountant. But I digress. This system, again, when we look at this, and this is a fundamental failure of trainers, fundamental failure, I cannot stress this enough. It's this, it's leads. The reason why the rest of this doesn't work for trainers is because they're too lazy here. Now, if you're watching this, you need to really pay attention and ensure that every single week you speak, if not every day, you're speaking to at least 10 people. Your business will grow because this is somewhat scientific in the sense that if you put people through the funnel, yes, it's business. People are going to say no. And sometimes it feels like a kick in the teeth. But if you play it like a game, if you work really hard, if you learn from every consult that you do, don't take it personally. It is just business. You work on this conversion rate, you're going to improve these things. You're going to improve these things. This is how you make money. So when we look at this, right, when we go back here, we look at leads, sales conversions. You now understand what I mean by all these things. These are 5 essential numbers to business, no matter how big your business gets. Again, if you've got a big business and you increase the amount of leads, you're going to make more money. If you increase your conversion rates, you're going to make more money. If you increase the average dollar sale, you're going to make more money. If you increase the amount of times that customer transacts, you're going to make more money. If you decrease the expenses, we're going to keep more money, right? So this is what I mean. These, these numbers are crucial. So when you're starting out, the key thing I think to remember here is really these two numbers, these three numbers in certificates two, or certificates two, we're gonna focus here. Certificate three focuses on leads. Certificate four really does focus on these three areas. I mean, I interweave them all throughout the certificates, right? But fundamentally, and certificate one obviously is the overview of everything, but you really need to focus in the beginning on getting those leads in because the more leads you get in, you're naturally through doing and sitting down with people, you're going to get better at sales, right? As you get busy, as you've got runs on the board, you're going to feel more confident to increase your prices. You're going to ask for the 2, 3, 4 time a week package. You're going to increase that average transaction. You're going to work on your service, right? You may need some coaching in how to decrease your expenses, and that's a great conversation, is a great place to be. But fundamentally, watching this, if you're starting out or even if you're struggling and you need some help, focus here. Increase the amount of people. And the way you do that is if you're at a big box gym, speak to people. If you're a local studio owner, go out of your gym, walk around the local area, speak to the coffee person, see who comes in there, who they know. Ask your current clients for referrals. Get as many people coming into the front end to make that machine work. So this one, obviously, if you're getting— if you're in a position where you're getting a lot of leads, then you need to make sure you're converting those leads and work on your sales process. So these are your 5 numbers. You can download the PDF, look at the notes in the PDF on this one. Yeah, make sure you're at least speaking to 10 new people a day. And yeah, if 10 people don't want your free thing, that's fine. You know, maybe 5 people do. And out of those 5 people, you're gonna get better, better at your craft. So hope that helps.