According to the numbers, the average gym will have profits of about 10 to 15 percent of its total revenue. That means if your gym is bringing in $50,000 a month, $5,000 to $7,500 should be going straight into your pocket every month after accounting for expenses. 

While focusing on ways to increase revenue at your gym, don’t forget to always be conscious of the money you are spending on operational costs. Sometimes the best way to increase profit is to hunt down and eliminate the hidden operational costs that are not providing any real value.

Managing Rent and Utilities

A gym owner’s rent should be below 25 percent of the gross monthly revenue. In fact, most industry experts say the target range should be closer to 15 percent of revenue if the place is truly going to be successful. If the rent is eating up too much of your revenue, it won’t be long before your doors are closing for good. You don’t want that, and there is a good chance the person leasing you the building doesn’t want that either. If you need to, don’t be ashamed to try negotiating better numbers with your landlord. Explain the situation and see what can be done. 

Some things you can’t negotiate on. You can’t ask the utility company to decrease your rates, but you can watch the thermostat and conserve energy when possible. Does the temperature at your gym really have to be at 68 degrees all the time? Probably not. Invest in a programmable thermostat that will routinely make temperature adjustments based on the time of day and when your gym is busiest. Just set it and forget it. 

Also, having ten treadmills plugged in and increasing your electricity bill every month can be quite expensive, especially when only five of the treadmills are being used at a time. These are all things to consider when eliminating hidden operational costs.

Insurance

Is there a bigger scam than insurance? (Well, property taxes I guess.) You pay the premiums, and then when you need to make a claim, it doesn’t seem like much is covered. Of course, you need insurance as a gym owner just in case someone tries to use the squat rack as a gymnastics event, but maybe you don’t have to pay such a high premium. Shop around and find insurance companies that specialize in gym insurance and offer better rates.

Gym Software

To stay competitive, most gyms nowadays offer 24-hour access. Finding the right gym software that can handle 24/7 facilities, all billing, POS merchandise, monitor memberships, and do whatever your gym’s personal needs may be, can be tricky. And pricey.

You don’t want gym software that penalizes you with higher fees when your gym begins to become more successful. Plus, if the software is relying on third-party tools and apps for core functions, then these “software companies” are really just costly middlemen. 

Gym Insight software has been constructed by gym owners for gym owners. Flat monthly fees with a guarantee they will never increase, no percentage cuts when your gym becomes more popular, and no long-term contracts. Plus, the customer support is miles above the rest. Always review user ratings for gym software. Gym Insight’s user ratings on GetApp, Software Advice, Capterra, and G2 are typically 4.7 to 4.9 on a 5-point scale. This is at the top of the field and less expensive than competitors. In addition, with a 30-day money-back guarantee, there is no reason not to give them a try.

Inefficient Staffing

When discussing eliminating hidden costs, staffing ranks near the top. Payroll is a controllable expense. Problems arise when employee schedules are built around convenience rather than on demand. Consider what can be done to help control finances better.

• Is there really a need for two front desk people when everything is basically automated?
• Can a maintenance person be scheduled for three hours a day instead of a full eight hours?
• Would fitness class trainers be more affordable if they are given a percentage of the class revenue instead of a flat high-cost fee?

These are all things that need to be audited and reviewed when wanting to eliminate hidden costs.

Wasted Square Footage

Whether you have a small studio gym with a few dozen members or a full-sized gym consisting of several thousand square feet, there is a good chance there is square footage that is being underutilized. If there is a separate room that is only being used a few times throughout the day and night, think about subleasing it a couple of nights a week for non-fitness-related ideas to increase revenue. 

There are countless opportunities such as tutoring, photography club, book club, art classes, beauty care services, corporate or team meetings, or a number of other options that just need a space to operate. Avoid letting a studio sit empty if possible.

Preserving the Gym Atmosphere

Eliminating these hidden costs without damaging the gym experience is key. For example, you don’t want to eliminate the water fountains to save a few bucks if your members are dying from dehydration. Hidden costs can accumulate over time and cost gym owners thousands of dollars a year. By performing a monthly audit on operational costs, the money you save during the year will probably be larger than a costly marketing campaign to attract new members. The old saying “you have to spend money to make money” is true up to a point, but not if you are spending money needlessly in the process. 

Gym Insight

Gym Insight’s customer service is second to none. If you are on the fence and would like to brainstorm how Gym Insight can take your gym to the next level and make things easier on yourself, just reach out.

We work with gyms of all sizes. Plus, we will never take percentages or include hidden fees. We offer per-month pricing plans that won’t increase over time. Gym Insight wants you to succeed. And if you already have gym software in place that you are not quite happy with, we can transfer the data over and you can start fresh with us.

Phone: 1-855-FOR-GYMS
Email: [email protected]