Why Do Fitness Businesses Fail? Five Top Reasons
The fitness industry is growing at a remarkable rate: 2017 was a record year for health clubs, according to the International Health, Racquet & Sportsclub Association (IHRSA). And yet gyms can and do fail. Which begs the question: What is holding some fitness centers back while others forge ahead? While a shortage of capital is the most obvious cause of a gym having to close its doors, plenty of other underlying causes also come into play. Read on for a roundup of five reasons why fitness businesses fail.
1. Lack of a brand identity.
Too many gyms try to be everything to everyone. Unfortunately, today’s customers have many options from which to choose. What makes your business stand out from the rest? Particularly for mid-market clubs, finding a market niche can mean the difference between success and failure.
2. Insufficient attention to finances.
Just because you had enough capital to open and can meet your basic month-to-month expenses doesn’t mean you’re in the clear -- especially for growth-minded operations. Failure to track your finances can lead to dangerous overspending which can be the kiss of death for fitness businesses. The more you track how your gym is performing across a variety of measures -- including everything from new membership sales to recurring revenue -- the better positioned you are to make proactive improvements aimed at staying healthy and in the black.
Not a finance person? Don’t assume you should handle it alone. Says Jim Thomas, founder and president of management consulting and turnaround firm Fitness Management USA, “When the going gets tough, the smart get help.”
3. Lack of promotions and marketing.
Your fitness business could be the best fitness business in the world. But what’s that worth if no one knows about it? Promotions and marketing are essential to success in today’s intensely competitive fitness landscape. While your members can offer invaluable word of mouth (particularly if you keep them happy), other fitness marketing strategies are essential, including everything from well-lit signage to a strong web presence.
Continues Thomas, “Other than being under-capitalized, the biggest reason we see for health club failure is lack of business know-how and lack of proper implementation of sales and marketing strategies. Another common misconception that many new gym owners have is that the gym will sell itself….If you are not an expert in gym sales and marketing find someone that is. Embrace sales and marketing. Get some training. In an effort to provide good service, you can’t give up key steps of the membership sales process.”
You’ve got a great business plan, a top-notch location, and awesome services, products and programming. That’s great, but your work is far from over. The fitness business industry is constantly changing. Spend too much time patting yourself on the back for your current successes, and you risk falling behind. This is especially applicable when it comes to new competitors. A booming membership base is no guarantee. Today’s consumers are both demanding and discerning. To gain (and keep) their loyalty, you must make sure to meet their evolving needs. From keeping up with the latest fitness trends to routinely updating equipment, change is inherent to survival.
5. Failure to listen to your customers.
Which brings us to our next point: How can you understand your members’ needs if you don’t ask them? Both formal and informal efforts designed to gauge member interests, needs and satisfaction can not only help you plan your programming but is also an important show of good faith to members and potential members. This is an ongoing process, and its importance should be communicated to your entire staff. For example, your personal trainers aren't just personal trainers. They're also customer service representatives, salespeople, and brand ambassadors. The better they understand that this is part of the job description, the more prepared they'll be to fulfill these roles.
The fitness business is booming, with many opportunities ahead. However, this is not to say today’s gyms, studios, boutiques, and health clubs are foolproof. Acknowledging these five potential pitfalls can help you ensure that your fitness business is in tip-top shape to stay the course. When it comes to keeping up with the trends and curves, fitness monitoring technology can be a major tool for fitness businesses and their members. Request a demo today to learn more about what the Accurofit System can do for you. Learn more...