When you run a health club, there are two basic ways to boost profitability: decrease costs and increase revenue. But cutting costs alone—“saving” your way to financial growth—isn’t a sustainable strategy for boosting the bottom line. You have to look for ways to maximize what you already offer, then consider adding other services and revenue streams.
It starts by doing your homework, according to Kevin Hughes, COO of The Atlantic Club in New Jersey. “Health clubs can determine the best growth areas for their club by doing research,” he says. “This analysis includes networking with other clubs in the IHRSA network, as well as surveying the members as to what they would like to see.”
He offers four recommendations:
- Create a culture where the staff becomes focused on creating new revenue streams
- Drill down into the club’s ancillary income streams in order to create new ancillary income streams within the current income streams
- Explore where there are gaps in the club's business
- Study other best practices and adapting them to the individual club’s business
“Remember that membership dues is the club’s number one priority. Ancillary income can be more fun and take time away from the core business,” he says.