In the competitive Gym and Fitness sector, having a financially sound business is crucial for long-term success. As well as a passion for fitness and exemplary customer service, mastering finance is a fundamental skill for owners and managers.

Accounting and finance best practices for Gyms:

• Establish an efficient accounting system:
  • • Choose accounting software that suits the size and complexity of your business.
    • Ensure the accuracy and reliability of financial data.
    • Automate repetitive tasks to save time and reduce errors.
• Manage cash flow masterfully:
  • • Monitor cash inflows and outflows in an organised way.
    • Identify areas of savings and opportunities for optimisation.
    • Protect yourself against defaults and financial constraints, which can be delays in receiving payment from your customers, poor cash management (paying suppliers in 30 days but receiving in 90), low profit margins, unexpected expenses, etc.
• Prepare accurate financial reports:
  • • Have a clear vision of your gym’s financial health.
    • Track performance over time and identify trends.
    • Make strategic decisions based on concrete data.
• Fulfil tax obligations with peace of mind:
  • • Keep up to date with taxes and other legal obligations.
    • Avoid fines.
    • Ensure that you comply with the law.
• Make strategic decisions based on data:
  • • Use key performance indicators (KPIs) to evaluate the performance of your business.
    • Identify strengths and weaknesses to make targeted strategic decisions.
    • Optimise your investments and maximise profits.

Essential KPIs for success:

Knowing which indicators to monitor is key to making assertive decisions and achieving objectives.

• • Member Retention Rate: It measures the percentage of members who stay in the gym for a specific period. A high retention rate indicates that you are offering quality service and your customers are satisfied.
  • Customer Acquisition Cost (CAC): It measures how much you spend to attract a new customer. A low CAC indicates that your marketing and sales efforts are effective.
  • Average Ticket: It measures the average amount a customer spends. A high average ticket indicates that you are selling additional products and services beyond the basic monthly fees/subscriptions.
  • Profit per Square Meter: It measures the revenue generated per square metre of your business. A high profitability rate per square metre indicates that you are using your gym space efficiently.
  • Customer Satisfaction Level: It measures how satisfied your clients are with your gym’s service. A high level of customer satisfaction indicates that you are building customer loyalty and a good reputation.
  • Return on Investment (ROI): It measures how much the company has earned from a given investment. A high ROI indicates that you are using resources efficiently.
  • Break-even point: It measures the point at which your gym’s revenue becomes equal to its costs. A low break-even point indicates less vulnerability to fluctuations in sales.
  • Churn Rate: It measures the percentage of members who unsubscribe in a given period. A low churn rate indicates that you are successfully retaining your customers.
  • Lifetime Value (LTV): It measures the total revenue a client generates throughout their relationship with the gym. A high LTV indicates that you are building lasting relationships with your customers.

Monitor these indicators regularly and use them to identify areas for improvement and make strategic decisions that boost the success of your business.