Budgeting for Your Health Club During a Pandemic [VIDEO]

Even during “normal” times, budgets, accounting, and finance are subjects that can seem daunting and sometimes overwhelming. Add a pandemic, and the thought of looking at your budgets that need to be adjusted is even more of a struggle—and just one more thing to add to your ever-growing list of to-dos. Every company has had to make changes to the way they operate, including the way finances are handled. And this may have caught some off guard.

When the COVID-19 pandemic hit, one thing Stone Creek Club and Spa President and General Manager Larry Conner did not need to worry about was sitting down to plan a new budget from scratch. Instead, he changed some numbers around, and was easily able to create three different budgets to prepare his business in the case of three different scenarios—every month.

“My model was built for it, I was very thankful for that,” says Conner, whose club is located in in Covington, LA.

He recently sat down with us ahead of his presentation “Preparing Budgets for Every Scenario,” which will take place at the IHRSA Innovation Summit on September 17, to highlight some budgeting tactics that are useful during these times we are dealing with now, and what you can expect to learn during his session.

It’s All About Cash In, Cash Out

If you feel like you are struggling with solidifying your budget right now, you are not alone. According to Conner, the club business is not generally built for the type of budget that is needed in today’s climate. A budget for a club would normally be planned for one to three years out and consist of a capital budget and operating budget that is structured on an accrual basis, not a cash flow basis.

But right now, cash is king. It is not about normal accounting statements. You have to adjust for a cash flow type statement: cash in and cash out, and be able to adjust it quickly.

“We just have to know what’s coming in, and what’s going out, every day, every month. I mean, it’s week-by-week. You have to know the timing of your bills, you have to know the timing of when you receive your revenues, so that you make sure you have enough in the bank,” he says.

To start, Conner says to pay attention to the things that matter and the things that make the biggest adjustments to the bottom line. Consider those first, and determine what you can change. What can you do without? What do you need to survive?

A Budget Plan That Can Handle It All

Then, you can begin to work on your budget template. Setting up your initial budget template will take time and will be very detailed. But, if done correctly, this one budget will be able to quickly play out multiple scenarios and will be the only budget you need.

“One budget will fix it for all. I’m not creating a new budget for this situation. I am just modifying my existing budget. So when you set up your template right, when you plug in a few numbers dealing with any scenario, it will give you what you need.”

He gives the example of when his club was closed during the beginning months of the COVID-19 pandemic, he sent out a survey to his members to ask them how soon after the club reopened would they return and unfreeze their memberships. He needed to determine how much money would be coming in, and when. When the results of the survey came back, they were not what he had expected. He knew he had a strong member base and thought members would be eager to return right away. And although they wanted to, information surrounding COVID-19 was still evolving, and people were still nervous to go just about anywhere.

“I had to adjust my budgets three times. But luckily, I built it right that adjusting the budget—the cash flow budget—was quick. Change a few numbers, and everything flows through and the model goes all the way to the bottom. So it can be very quick, but it’s very detailed in the beginning to set up. But once you do, you can use it for any scenario,” says Conner.

Learn More at the IHRSA Innovation Summit

In his presentation at the IHRSA Innovation Summit, Conner will go into detail about how to create this budget for your own business. And, even if you aren’t working with budgets on a daily basis, he says there is always something you can learn.

“The most important thing we can do is network and learn from others. It’s amazing what you can pull from if you just take the time to listen to other people’s experiences and modify to your own.”