Just as a sculpted physique doesn’t always mean a person is healthy, so cash flow alone does not indicate a thriving business.
Knowing your financials is important, certainly, and making sure more is coming in than is going out is vital to success, but the financial factor alone is not a true measure of a healthy business.
The Small Business Administration (SBA) states, “About half of all new establishments survive five years or more and about one-third survive 10 years or more.” That means, that if you look around and there are 6 gyms within a 10 mile radius, most likely 3 of them will close their doors or sell within 5 years of opening. A sobering statistic.
So how do you increase your odds of being one of the ones who stay alive, and healthy?
Keep a close eye on these vital signs:
This point has received a lot of attention over the last number of years, and for good reason. Your business has to have a clearly articulated and unified purpose on which your gym culture hinges.
What to do: if this is unclear, set time aside alone or with your core team, and get specific on exactly why you are doing what you’re doing. And it needs to be more than, “we want to help people.” Turn your passion into a clearly defined reason and then communicate that reason often.
Your ability to pivot
Times are changing. What worked 5 or 10 years ago, heck even 1 year ago, doesn’t always work today. Can you spot these things, and change mid-course? John Maxwell in his new book Intentional Living encourages, “Failed plans should not be interpreted as a failed vision. Plans rarely stay the same, and are scrapped or adjusted as needed. Vision is only refined by failure. It’s important to remain stubborn about your vision, but flexible with your plan.”
What to do: Get up when you feel like a “failure”. Adjust course. Find the direction the wind is blowing and change your sail. Stay current. Read. Listen to podcasts. Spend time consistently getting smarter and understanding what is trending in marketing, business, etc. Do you have a business plan – or, at minimum, goals written out? Back into these goals to get where you want to go. Zig Ziglar affirms this by saying, “If you aim at nothing, you will hit it every time.” Make your aim unmistakeable.
Have you hired (or are you hiring) only “A” players? You know A players when you see them. Don’t make the mistake of hiring B, C, or worse, players. It will directly affect everything in your business – its energy, its growth, its expertise, its entire vibe.
What to do: Do not just hire to hire because you are working 12-14 hour days. Find the right person or people. Hire slow and fire quick. Each new member you add to your team will absolutely either make you stronger or pull you down.
Your ability to focus
It seems like the majority of gym owners we talk to are extremely busy, but not all of them are necessarily making progress. This difference is critical. Being busy isn’t nearly the same as being focused and growing. Healthy things grow.
What to do: Check out Matt Scanlon’s article on Productivity. It’s a great read with lots of practical, tangible pointers. And then apply what you’ve read, little by little.
Your target market
Do you know who you want in your gym? I mean, really know the certain types of people you connect with and who connect with each other? Or are you just thankful for any warm body who hands you a debit card? If you find (and market to) your ideal clientele, your gym will have a completely different feel.
What to do: Create member personas. And then gear all your marketing efforts to attract those people. Do occasional surveys of your members. Understand their voice and what it is they want. Make them be the hero of your business. Listen to their stories. Don’t make assumptions about why they are buying (or not buying) what you have for sale. Spend your time getting to know them.
This is quite possibly one of the most important vital signs. If you’ve lost your passion for doing what you do because you feel burned out, people – your members, your coaches, your significant other, your kids – will notice, trust me. As goes the leader, so goes the business.
What to do: This comes full circle to your “why”. Spend time thinking about why you pursued opening your gym and what got you excited in the first place about leaving another job to pursue this risky adventure. It may not “feel” like it, but what you get to do every day is a gift. If you can’t get back to the place of remembering how lucky you are, it might be time to take a different path.
These are a few of the factors that make a good business great. Get these in check and monitor them often, and your investment will grow big and strong.