Be Selective

by on Jul.26, 2012, under Wellness

The final point when it comes to MPCs is choosing wisely. Not every profit center is for every club.

Under the service category, you could consider: drink coolers, a sports bar/espresso bar concept, a nutritional education system, one-on-one training as an educational program, an active wear store and group cycling. Amenity MPCs would be child care, tanning, a day spa and massage.

Some MPCs, such as tanning, are fading out of many gyms. Others, such as a day spa, are just entering the market. To be successful, the MPC has to match the facility.

In summary, a fitness business should have at least four viable profit centers to take the pressure off new sales. Each profit center should net 20 percent or better on a monthly basis. Remember, in today’s marketplace, we can’t afford to carry losers. If it doesn’t make money then dump it. There are very few exceptions to this rule.

A mature gym can seek a 60/40 split in its revenues. This means 60 percent of the club’s money comes from membership/workout-related income. This includes dailies, cash sales, member dues, etc.

The other 40 percent of revenue should come from MPCs. A club that has a strong renewal base and 40 percent of its revenues from existing members, would be hard to hurt, allowing the facility a greater chance to survive in a competitive market.

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