5 Challenges You’ll Face in the Fitness Business
Wouldn’t you rather learn from other’s mistakes rather than make them on your own? In this article we look at 5 Challenges you’ll face in the fitness business. For each challenge we’ll shed some light into the issue and give you a tangible solution to help spare you from making crucial mistakes.
There’s just no way around it: Running a business is tough work. It’s rewarding but challenging. Even with the best systems, the best team, and the best clients, there are certain challenges you’ll face in the fitness business. (And more importantly, you’ll have to overcome them if you want to grow!)
Great systems and a great culture in your business make overcoming these challenges easier. That’s why we created the Fitness Business Alignment System™, and it’s how we coach our fitness pros to build high-performing businesses.
No matter how great you are, if you are in this industry long enough, here are the 5 challenges you’ll face in the fitness business:
- Finding Your Ideal Client
- Building Your Team
- Leasing a Space
- Maintaining Profit
- Maintaining Sanity
Challenge #1: Finding Your Ideal Client
The first challenge that most fitness pros and business owners face is getting clients. It might be easy at first—when you are good at what you do, word tends to travel fast, and you will grow your business by word of mouth.
However, as you grow and your time becomes more valuable due to your success with your clients, it becomes more and more important to be able to define and target your Ideal Client so you can grow your business.
In our trademarked Fitness Business Alignment System, we use two tools to help fitness business owners through this challenge. The Defining Your Ideal Client™ and Local Market Positioning™ tools help you create a profile and teach you how to communicate your message to the right people.
Marketing is about getting the right person’s attention at the right time. You don’t have to speak to everyone as long as your message clearly attracts the right person.
In fact, your marketing message should probably be a bit polarizing to the people who aren’t a good fit for your business.
The business owners who seem to get stuck are the ones who try to grow by serving every market instead of finding more ways to serve the specific market they are best at serving.
You don’t have to speak to everyone, as long as your message clearly attracts the right person.
You’ve seen that business—the one that offers 1-1 training, semi-private training, small group training, boot camps, pilates, performance training for athletes, fat loss training, special programs for baby boomers, and a brand new wellness program for their community.
None of those things are wrong when you run them really well by themselves. They are wrong when you try to do them all in your business just to make another buck. It seems easier to launch a new program or offer a new service than it is to focus on one single type of client and be the absolute best at delivering results for them.
Solution: Take time to define your Ideal Client and then focus on serving them. Be the best at one thing, not mediocre at many things.
Challenge #2: Building Your Team
After you’ve seen some success, you will start to hire employees and develop your team. This is one of the big challenges in the fitness business for most professionals. It’s not easy to find qualified trainers, and it is even tougher to keep them around.
Before hiring your first employee, you need to have a good grip on your numbers. There needs to be enough revenue coming in to cover the costs of hiring the employee and to keep them around.
You not wanting to do a task in your business by itself does not afford you the right to hire someone to do it. If you aren’t comfortably taking home a salary or income to cover your living expenses and can’t pay your business expenses, you aren’t ready to hire an employee.
If you have your finances in order and are ready to take on a team member, think long and hard about what position you need to hire first. The best position to hire first is someone to handle the administrative tasks. Your personal abilities, skills, and passion are with training clients. Don’t hire out the training first!
It’s also less expensive to hire someone to do the basic admin tasks in your business and to do it part time than it is to find someone you can trust to train your clients.
The time you will win back by hiring an admin can be spent marketing your business or training more clients, or it could even just get you more time with your family or for yourself.
There are plenty of people who have skills to perform your admin tasks and who love doing it. There are far fewer people who will jump out of bed at 4:30am ready to go train your 6:00am clients and who will do it consistently.
What if I am ready to hire trainers?
If you are at a place where you need to hire trainers, an internship program will be your best recruiting tool. Create a learning environment where you can groom your future team and prepare young trainers for a career in this industry.
Not only will you have a steady pool of potential hires, but you will also find that you become a better leader and coach by teaching your interns.
Solution: Only hire when you are ready for it financially. When you are ready, start with hiring someone to help with the administrative side of the business.
Challenge #3: Leasing a Space
At some point when you are starting your business, a time will come that requires you to explore leasing or subleasing a space in your community. I can remember how scary it was going through the leasing and even subleasing process by myself.
Finding a leasing opportunity that sets your business up for success is critical. A simple mistake in this process can act like compounding interest working against you. If you are in a 3-5 year lease for your facility and make a small $100/month mistake in your negotiations, that’s $1200/year or $3600-6000 over the course of the lease. Now, that may not sound like a lot to you, but rarely do the mistakes made in lease negotiations amount to just $100/month. More often than not, they are for thousands a year or more.
In many leases, there are many hidden fees that you don’t anticipate such as property taxes, common area maintenance, and many others that may not come due each month with your lease check. However, they will come due eventually, and I can remember getting $4,000-$6,000 invoices in the mail for some of these fees that I never anticipated when signing the lease.
Here are 5 questions to ask when considering leasing a space:
- Can I afford to lease right now?
- What space is necessary for me to operate my core offering effectively?
- What term should I be considering?
- What work will be required to get the space into the condition necessary to run my business and provide the experience I’d expect for my clients and team based on my core values?
- What will the lease I’m about to negotiate really cost me each month if I were to sign it as presented to me if I don’t negotiate a better deal?
Read Full Article: To Lease or Not to Lease?
Some of the smoothest and most economical leases we’ve seen arise when business owners leverage an experienced person to help them negotiate. Having another person also helps you take the emotion out of the leasing process and ensures someone is helping make decisions based on the numbers.
Solution: Find a coach who has leased a space for a fitness business before and ask him or her to help you navigate the process.
Challenge #4: Maintaining Profit
The old saying “cash is king” in business still stands true! If you look behind the scenes at some of the fitness businesses that present themselves as the best in the industry, you would be completely freaked out by what you found: They are running their business month to month, never accumulating profit, simply trying each month to outsell their mistakes.
It’s critical that as you build and grow your business, you maintain a reasonable profit margin. You should be accumulating cash in the bank, not just racking up gross revenue.
In case you’re a little confused how someone could make a lot of money but not have any, let’s define some terms.
- Gross Revenue: The money brought in before expenses. This is typically what you hear people brag about: “I run a $20k/month business.”
- Gross Profit: The cash left over after you pay all expenses in your business. Ideally, this should also be what is left after you pay yourself a reasonable salary.
If you wonder how high your profit should be here, are a few parameters:
- Under 10%—Your business isn’t running optimally, and this needs to be addressed.
- 10%-15%—You’re running a good business, and it is making a reasonable amount of money.
- 15%+—Your business is running extremely efficiently.
There are lots of factors to consider when looking at these ranges. First, these are based on a business that is paying rent for a facility and has a small team. Second, this assumes that you are paying yourself a reasonable compensation for your duties in the business. Third, these ranges should be used to evaluate your business over a long stretch of time. There will be periods where expenses are higher or where unexpected expenses pop up that will lower your profit. This profit over time is what you want to analyze.
You should be accumulating cash in the bank not just racking up gross revenue.
It’s also important to know there is a difference between the money in your bank account and your profit. They don’t always match up, partly due to taxes.
Solution: Make sure you have a solid accountant who can help you plan for taxes and help you set aside enough money to pay your piece of the pie to the government when it comes time.
Challenge #5: Keeping Your Sanity
Finally, the toughest of all of the challenges you’ll face in the fitness business is keeping your sanity! Running a business and building a team can be challenging. It will require a lot of your time, and it can put a lot of pressure on you as the business owner.
The sooner that you accept that you are not immune to these challenges in the fitness business, the sooner you will be able to learn how to deal with them so that they don’t drive you crazy.
There are 4 key steps to keeping yourself on track:
- Know your vision
- Know your priorities
- Be thorough
- Be complete
Know Your Vision
As you build and grow your business, the first step is knowing where you want to go and being able to share that with your team. Your vision helps you determine what opportunities to take and what issues to solve first. Know where you want to go and then set the plan in place to get there!
Know Your Priorities
As a business owner, everything seems like a priority. There are fires to be put out each day and a long, long list of to-dos that will never end. Your time is valuable, and you can’t possibly get it all done. And you don’t have to!
Each day, determine your priorities, and make sure that they align with your vision. If you do this, you will be able to focus on the things that will move your business forward and not get caught up in the urgent issues or opportunities that pull you off track.
Be Thorough & Complete
Don’t just solve problems; you need to be thorough and complete with your priorities. Do your research, make decisions based on facts and numbers, and see it through so that it is done. If you are solving a problem, make sure you create a solution that ensures you avoid having to fix it again later. Investing a few more hours of your time now can save you dozens or even hundreds of hours in the future.
The last piece of advice for maintaining your sanity is to plan downtime for yourself and time with your family. It’s likely that you will carry the business with you everywhere you go. You are always thinking about the problems you are facing and coming up with new ideas you want to get to work on right now.
However, for you to be the most effective business owner, you need to be performing at your best. For most high performers, that requires a significant amount of downtime so that you can think and recharge. Most business owners never realize their full potential because they are running at 50-60% all the time. They are drained and worn out.
Ensure that you build in downtime to recharge and focus on spending time with your family and friends. Your business should serve you just as much as it serves your clients and your team.
Ensure that you build in downtime to recharge and focus on spending time with your family and friends.
You Don’t Have To Face Your Business Challenges Alone…
We have worked with thousands of fitness professionals and business owners all around the world. We’ve seen trends and what most successful fit pros have in common. (Hint: It’s NOT just about outworking your competition).