Accounting For The Details
There are so many ways that paying attention to your costs will save some money and keep you earning a profit. Think of it like lacing your shoes before you workout. A better fit might only mean a slight advantage, but that could be the difference of winning the race or only taking second place. Small savings add up when it comes to supplies. When you factor in the behavior of staff it tends to have an even greater effect.
Gym Insight gives you some great tools for measuring things like attendance and payments. There is a reason for it of course: You need to keep a close account of both the marginal costs of each membership and the monthly overheads that affect your bottom line.
Inventory Counts Even In Small Amounts
This might be a more obvious issue in businesses like bars and restaurants that attempt to dispense consistently sized units of expensive liquors in the form of high-end cocktails. A habitually sloppy pour might average out to what you expect or it might average way over your cost calculation. The same can happen to you if you have a gym with a juice bar.
When you have a feature like a juice bar or some other system that has a consumable component you need to keep good control over how supplies are consumed.
Are Your Cleaning Supplies Going Down The Drain?
The same is true of how things as humble as cleaning supplies are used. It’s vital that your gym space is spotlessly clean but if you use disposable supplies to do the cleaning it might be more efficient to try an alternative like using durable clean clothes and washing them instead.
Vendors give a wide range of prices for a given set of supplies. You need to shop around if you are having supplies delivered. It may seem to make sense to have them come from one distributor but check out the competition, just to be sure. Also, if your suppliers know they have competition they might be inclined to give you their best possible rate.
Physical inventory can be expensive. If you have any significant inventory on your balance sheet make sure to keep track. Whether it’s juice bar supplies, cleaning supplies or merchandise that you sell at the front desk, keep a running inventory of what you are supposed to have on hand and what you can actually lay your hands on.
Measuring cash in the system is important too. How much cash is the front desk associate supposed to have? Do you have a process for closing out the cash register at the end of each usage? Who has access to the cash drawer?
The real question behind this is about keeping control of your cash by measuring any aspect of its movement. To do that you need to be able to determine who touched the money.
Here are some basic cash-handling policies to live by:
- Everyone who handles cash has to log in to do so
- No one is allowed to operate a register where someone else is logged in
- Managers who have access do not process sales
- At the end of the shift, each cashier has to print out the system report activities and report payments taken in writing.
Also, you or your trusted management team members should occasionally run unannounced audits of the cash drawer and have the associate watch you count out the cash. If it matches what the system report says, wonderful! That will be your usual and most likely outcome.
If it’s a little short or over your associate probably can’t count and needs some formal and documented counseling. The nightmare that you may think will never happen, but definitely can is the drawer being hundreds of dollars over what it should be.
It is not pretty and it tends to happen when you least expect it, from an employee that you would never have suspected, but it happens every day somewhere across the country. Theft is a huge risk when you have cash in a retail business.
Think about it: If you have revenue of one million dollars per year and even twenty-percent is by cash and that cash passes through one point of sale there is a tremendous temptation for one of the few employees to take some of the cash and not record it. In this way, misguided cashiers can double their wages or more. You might never even realize it unless you keep a close eye on your cash drawer. It could be the difference your home payment and living in your back office.
Fagan, Lawrence. Keep Your Business Clean. August 24, 2012. https://blog.gyminsight.com/2012/08/keep-your-business-clean/ (accessed June 19, 2014).
-. Sales And Presentation Skills Revisited. January 12, 2015. https://blog.gyminsight.com/3151-sales-and-presentation-skills-revisited/ (accessed October 17, 2015).