The following is a guest post by John Burch of The Biz:

 

After working for the better part of 20 years in small businesses (and owning a few very successful ones) just like yours, I’ve seen several similar traps that affect the profitability and longevity of the fitness BIZ you’re running.

 

“Who’s this article for?” you may ask.

 

This is for anyone who allows themselves to slip into a perpetual case of the “Mondays,” gets that sick feeling in their stomach if the topic of their BIZ even comes up, or is just plain doing a crummy job - and knows it!

 

It’s also for anyone and everyone who wants to learn from others’ mistakes and just get to the groovy part of running a BIZ. Yes, I said groovy because when you run a BIZ the right way, it’s Friday every day.

 

The following is a list of problems I’ve culled from having hundreds of BIZ owners trust me with their success. By no means is this everything, but if you take my advice with the fixes, you’ll have a lot less heartache moving forward.

 

FIX #1: Create a list. Don’t worry about space.

 

PROBLEM:

The single most powerful skill any business owner must posses is to be able to cast a wide net. And no more important is this than when you’re opening your business. Your skilled instruction will never see the light of day if you don’t find the people who want what you have.

 

One of the biggest problems is we small BIZ owners get caught up in the accoutrements of the BIZ such as the space, phone service, or paint on the walls. Listen, those are ALL important. However, if you haven’t first developed a relationship with buyers in your market (even if those buyers are “free” buyers who just give you their email, they also gave you their trust and attention) you’re behind the eight ball from the start. You need a list of several dozen to several hundred, depending on the metrics necessary to have a robust BIZ, BEFORE you open, hire a staff and go into debt.

 

FIX:

Create events and activities that get you communicating directly with prospects via email. A robust email list of potential future buyers has far more impact than a ton of Facebook friends.

 

I can hear you now asking “What event?” This can be done easily and nearly every pilates, yoga, small gym, and Crossfit BIZ can do it without much start-up. Set up a fitness screening which is free (although limited to a certain amount of people, who must register early) where you show a group how your service helps solve their problems.

 

Once you have a list of potential buyers THEN you can find the space to put them in. If you skipped to the “getting a space” part in your BIZ without having a robust potential client list, no worries. You can do what I said above with a business that is already running.

 

FIX #2: Test the edges of pricing.

 

PROBLEM:

In the excitement of (finally) having paying customers, we BIZ owners tend to forget to ask, “Are we leaving money on the table?” And why should we? We’re not greedy and we would probably be willing to do this for free - and most of us do indeed do it for free (or have done it in the past). Shouldn’t we just be thankful for HAVING a business that is making money? Or is it really making money, or at least as much money as possible?

 

A thousand people paying $100 per month isn’t the same as a hundred people paying $1,000 a month. The thousand clients require much more fixed costs: space, equipment repair, staff, follow up, etc. This is the problem with globo-gyms. The desire for a large corporation to make SOME money off the masses has driven the price to nearly nothing. The upside is the company has a lot of people paying and not many using the product. The downside is their quality and prices are in a downhill race to nearly $0.00.
 

FIX:

Decide what you want to be - McDonald’s, where a lot of people can buy a (soy) burger for $1.00 - or a higher-end restaurant that actually provides a great meal for a bit of a higher price. You could do some research with pricing in your local market for a more precise answer, however know that this isn’t an exact science.

 

Next, you’ll rely on your data - the amount of people who call versus those who come in versus those who enroll versus those who stay. Adjust as needed if the numbers aren’t what you desire. And for those of you running a BIZ who are fearful of increasing your prices, here’s the good news: Even if you DOUBLED your prices you would only lose 30% of your clients - you would still be more profitable.

 

FIX #3: Master a system, then hand it off.

 

PROBLEM:

The standard bearer MUST be the business owner. Let me repeat that in a raised voice: THE STANDARD BEARER MUST BE THE BUSINESS OWNER.

 

And therein lies the invisible conundrum - how do you TRUST anyone if you’ve never had to build a team to continue the traditions you’ve started? Most small BIZ owners are so afraid to hand their BIZ off to anyone that they resemble a mother who doesn’t know when to stop (s)mothering. And others just plain suck at delegation because they have never run a BIZ.
 

FIX:

There are several items here and they all will help you test out a relationship before you take the plunge.

 

Hire a temp (one you actually pay and get value from) for five to ten hours a week to do filing and clerical stuff. Bring someone on who is an hourly (or even unpaid) employee and give them some of YOUR non-critical responsibilities. And for their sake, chunk it down into manageable parts and set them up for success by training them a lot.

 

Before increasing their rate, hours or responsibility, take a look at their productivity. This is where most BIZ owners FAIL. Expecting someone to be as good as you at something A) they just learned, when B) they aren’t as invested in your BIZ success (sorry, you’ll be in love, your people will be “in like”), is a recipe for disaster. Expect to be grooming these people for a while and realize there’s really no other way to do it.

 

That’s it for this installation. Read part two for the next 2½ fixes that will help you raise your game.

 

For more information and tools for running a gym visit:

The Biz: Raise Your Game