Today everything is being tracked whether we want it to be or not. We are tracking our health stats, how much more weight can be added to a back squat, and the number of steps we take a day. We track these to get a clear picture of our overall health and areas that still need to be improved.
The same can be said about your business’ fiscal health.
4 Items to Measure in your fitness business
The top 4 things a fitness studio should be measuring are:
Revenue per member
This can easily be measured on a monthly, quarterly, or yearly basis by taking your total revenue divided by number of members. This helps you gain insight on how your members are spending their money with you.
Are they signing up for monthly or annual passes? Are they spending money regularly on merchandise or trainers?
This is a key metric to help clarify how many new members you need per year to maintain profitability
Member Retention Rate
Like all businesses, keeping members can be a struggle, but it’s critical for long term success and satisfying existing customers. It’s easier and more cost-effective to retain customers than acquiring new ones.
A 5% increase in customer retention can increase company revenue by 25-95%.
How many cents of profit has your business generated for each dollar of sale? This is a simple equation, but should be calculated regularly.
Simply take your (Net sales – cost of goods sold) / Net sales = Gross Profit Margin
Revenue per square foot
Knowing how much money you’re generating from the space you’re occupying is key. You can determine what areas are not producing income. It’s a simple calculation: if your studio generates $500,000 annually, and you have 2,500 square feet, your revenue per square foot would be $200.
What measurements do you have in place?