Whether you have considered introducing new services, opening a larger space or adding another location, you are not alone if you have set your sights on growth. A recent survey found that more than 40% of fitness business owners are ready to grow further.
Is your business ready to expand? Perhaps. This article gives you 5 indicators. Do these points sound familiar? Then it is time to expand!
1. You have loyal customers, and they are asking for more
Recurring revenue is the best revenue. If you have a strong membership base, which according to Workouts Wizard means more than 60% of your revenue comes from automatic payments, you already have recurring revenue you can count on. More importantly, you have loyal customers who want to support your success.
Of course, you should watch your member retention rate. A sudden spike in automatic payments does not immediately mean you should expand. Pay attention to patterns over time. I will go into the statistics in more detail later.
2. You are almost out of space
Are you struggling to find room to store equipment and inventory? Are members fighting for space in every class? If waiting lists are the norm and your occupancy rate is 65% or higher, it may be time to expand. A larger or second location gives everyone more breathing room.
That said, first take a close look at your existing space and schedule. Are you making the most of what you have? Could you extend your opening hours or schedule? Could you use the space more efficiently to generate revenue? Only once you have checked these off your list should you consider the next step.
Want to expand your current location? This is probably the simplest and least risky way to grow. Consider how you can convert previously underused areas and make the biggest impact with the least construction. Commercial extensions are expensive and take time, especially these days.
Considering a second location? When looking for the perfect spot, you do not want to be too close to or too far from your current location. Most people do not want to travel more than 5 – 8 km from home or work to exercise. A nearby location lets you benefit from your existing reputation in a neighbourhood where some current customers and many potential customers live. That said, do not choose a location so close that it draws many customers away from your current space.
Looking for a completely different option? Look for fitness businesses for sale. They often come complete with their own membership base and cost far less than starting from scratch.
3. The financial figures tell the right story
We have already discussed member retention, but it is only one of the metrics to examine while planning for the future. Keep an eye on the following:
- Net income. Is your business profitable? Is your operating result growing steadily? Do you have enough savings?
- Gross revenue. Are sales increasing? By how much? Can you project this trend across the whole year, or is it seasonal?
- Return on investment. How will investing in your business’s growth generate a return? When? And how much?
4. The industry is growing
Although industry performance does not make or break your individual business, it indicates overall consumer demand. Fortunately, the fitness industry is on an upward trend. In fact, 78% of consumers say wellbeing and health are more important than ever. Even despite inflation, a recent survey found that half of consumers consider health and wellbeing too important to cut back on.
5. You have access to the resources you need
If your business is consistently profitable, you may have enough cash available to cover expansion. If not, do you have enough potential investors or access to flexible financing?
Is it time to take the leap? You already have a growth mindset, a fundamental first step towards expansion. Now review your figures, talk to your team and create a clear vision for growth. Whatever the future holds for your business, we are cheering you on.
Alternative
Are the growth methods above too big a step for your business? Or are you not yet ready for these forms of growth? You can also grow your business in smaller steps. Do you already use software in your business, for example? Workouts Wizard can offer a big step in the right direction without requiring a major investment. Take a look here to see what our system can offer you.
