Drive More Profit to Your Gym (With 3 Simple Expense Categories)

As a young gym owner I spent way too much time chasing revenue.

In some cases, a relentless focus on generating revenue is the only option .

But at the end of the day, the money you get to keep is profit .

A profit-focused gym owner will be a happier one.

If you’re profit focused, you’ll need to be mindful of your expenses.

Your expenses can be broken down into 3 categories:

  1. Payroll: Including Payroll tax and employee benefit
  2. Fixed Expenses: Rent, insurance, utilities and anything else that won’t change
  3. Variable expenses: Marketing, meals and entertainment, client gifts, education, equipment and amazon(LOL)

It’s to your advantage to have some boundaries in place on what you spend in each of these categories.

Once these boundaries are in place you can focus on driving revenue, knowing that your expenses will not grow significantly while your business does.

Here’s an example.

A gym that has 100 members who each pay $400 comes to $40,000/month in revenue.

To service those members, let’s say it takes a monthly payroll of $15,000.

Let’s call your fixed expense $10,000 and then put variable expenses at $10,000, for a total expense structure of $35,000.

In this case you’ll profit $5,000/month.

Ok, not awesome but not the worst I’ve seen.

But let’s say the current structure can add another 30 members…with no increase in payroll and minimal variable expense increases.

That’s another $12,000 in pure profit!

Now we’re talking.

The theme is to get a grip on your expenses, keep them at bay as best as you can, then drive revenue hard…well over that expense base.

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