Is Your Fitness Business Recession-Proof?
Bloomberg recently estimated the country's chances of entering a recession within the next 12 months at 29 percent. While this is somewhat heartening, we've all heard the adage, "Hope for the best, plan for the worst." So what would a recession mean for your fitness business? Here’s a closer look at what all fitness business owners should know about recession-proofing their operations.
The Impact of a Recession on the Fitness Industry
Fitness business memberships fall under the category of ancillary spending. When the economy takes a dip and wallets tighten up, this type of expense is often the first to go.
But not all fitness businesses will be equally impacted by a recession, according to the fitness industry guru Pete Dupuis. Dupuis breaks gym memberships into three basic categories: premium clubs; mid-range clubs; and the cheapest clubs which utilize a “rock-bottom pricing strategy approach.”
Of these, according to Dupuis, the first and third will be relatively immune from the impact of a recession for two very different reasons. In the case of the first category, wealthy members are unlikely to feel the sting of the recession and therefore will continue their memberships in some form or another.
In the case of the latter, memberships are cheap enough that consumers are likely to conclude that maintaining a membership is worth more than discontinuing it. Caught in the middle and most likely to be hit hard by a recession are businesses in the second category.
According to a report from CNBC, meanwhile, boutique fitness brands are most likely to see a slowdown in growth if the economy goes into a recession. This may seem surprising because boutique fitness bands have been a significant growth sector. However, if and when the time comes for households to make budget cuts, experts suggest that their price premium models will find them in the consumer crosshairs.
Recession-Proofing Your Fitness Business
The good news? Fitness business owners don’t have to sit back and wait for a recession to strike. According to Dupuis, focusing on several things now can better position fitness businesses to come out ahead.
First on the list is differentiating your business. Dupuis shares an example from his own history to make his case: In 2007 and 2008, his fitness business strengthened its market position by catering to youth athletes. “We came to learn that when times get tight, parents cut off their own spending before they eliminate valued services relating to their children,” he says.
Another example? Establishing your fitness business as an expert in a certain type of injury recovery. “You think people are going to stop tearing ACL’s simply because the market is in the can? I think not. Position yourself as 'the guy' to bring you back from a knee reconstruction, and you’ll be standing on the other end of an economic downturn,” Dupuis contends continues.
Dupuis also recommends making your business “stickier.” The more services and amenities you offer for members to take advantage of, the more they lose simultaneously if they cancel their memberships.
“Maybe you explore keeping a freezer in your space to allow for an on-site food delivery service to cater to your clients. Maybe you bring in an established physical therapist to function as an independent contractor. You could add a smoothie bar...offer childcare...whatever. Just make your business more difficult to walk away from than it currently is,” he explains.
Dupuis’s last suggestion is one that will benefit your fitness business not only during a recession but immediately: Identifying and correcting operational inefficiencies. “You’re spending carelessly somewhere, and cleaning those habits up now, while cashflow is fine and the team isn’t stressed about the performance of the operation, will be far less exhausting than doing it all at once in a reactionary format when things get a little grim,” he concludes.
No one likes to think about the worst-case scenario. However, thinking about -- and planning for -- the worst-case scenario will make it easier for your fitness business to weather the storm of a possible future recession. When it comes to making your fitness business “stickier” by offering your members more, wearables are a powerful member retention tool. Download the catalog today to learn more about Accuro's fitness monitoring technology.