It’s a well-known fact that the fitness industry tends to suffer during a recession. But that doesn’t mean your gym business needs to take a hit. With some advance-planning and sound business strategies, you can protect your club from the negative impacts.
In this article – we share nine ways to recession-proof your gym business or fitness studio.
Why Does It Matter?
Recessions are a semi-predictable part of life. They tend to occur every 12 to 14 years, bringing unemployment and low retail spending along with them. Gym memberships are one of them one of the first things to be cut from household budgets, so fitness businesses are particularly vulnerable to recessions.
Recent global events have meant that an economic downturn is expected in the coming year (and has already begun in some places). So, it’s vital to take steps now that will help your gym or studio to weather the tough times.
1 – Make Your Gym Studio Indispensable
If members see your gym as indispensable to their everyday life, then they are less likely to cancel their membership. Instead of being a ‘nice to have’, it becomes an ‘essential’.
How do you make members feel like this about your fitness business? Here are our top three suggestions…
- Help them to make gym sessions ingrained into their routine by supporting them with habit formation.
- Deliver exceptional value so they feel that they get a lot out of their membership (beyond simple access to gym equipment).
- Provide a community and encourage social bonds to increase their ties to the club or studio.
2 – Diversify Your Business Model
Have multiple income streams so that if one decreases, you still have other ways to generate income. Think about how you can make money beyond simply selling memberships. Renting out your space to training course providers, doing speaking gigs, or selling digital products are all great ways to do this.
You might also like… 25 Proven Ways To Increase Gym Revenue.
3 – Stay On Top Of The Numbers
Know where profit margins are healthy and where they are slim. This will help you to make quick and effective business decisions about where to focus during hard times. It’ll also help you maintain positive cash flow so that you have some breathing room during an economic downturn.
We should probably mention here that we’re not financial advisors (sorry to disappoint!) so nothing in this article should be taken as financial advice!
4 – Position Your Gym as a Treat
When times are tough, people like to treat themselves on a small scale. People are willing to spend small amounts on treats to make themselves feel better. It’s a phenomenon known as the lipstick effect because lipstick sales skyrocket during a recession.
Think about how you can position your gym offering as a treat, some well-earned ‘me time’, or a way to decompress during a stressful time.
5 – Offer Multiple Pricing Tiers
Offering multiple tiers is an effective pricing strategy in general, but it becomes even more important during a recession.
It gives customers the option to downgrade something that is potentially more affordable for their budget. This can also help to reduce cancellations – after all, some income is better than none at all.
6 – Become An Expert
If you’re an expert in your niche, then you will always be people’s first choice. This means that even during lean times, your business will get the pick of potential clients.
Becoming an expert on something takes time, so it’s important to start earlier rather than later. You’ll need to do plenty of reading around your chosen topic, then demonstrate your knowledge to build credibility. We mention several ways to build authority in this fitness influencer article.
7 – Don’t Commit To Long Supplier Contracts
Your business will fare better if you can be flexible and this is especially true for finances. Being tied to monthly or fixed-term payments will eat into your cash flow. So, if a recession looks on the horizon, avoid tying yourself into long commitment by negotiating shorter timeframes or adding a get-out clause to contracts.
8 – Overpay Debts
This one may not be very exciting but it will put you in a strong financial position. Re-paying more than the minimum during good months will mean there’s less debt pressure on your business.
Alternatively, you can move the overpayment funds into a separate account so you have more liquidity but can use the cash for debts if needed.
9 – Build a War Chest
Building a war chest is kind of like saving for a rainy day. Putting aside a small proportion of your profits each month will mean you have a greater safety net when a recession hits. But that’s not the only benefit…
Big companies like Amazon and Apple use their war chests to expand their businesses during recessions. While everyone else is panicking, they take advantage of cheap deals that downturns bring to the surface.
If your gym has some cash put by, then you may be able to jump on opportunities. Landlords may offer space at a bargain discount, allowing you to expand. Or fitness equipment suppliers will typically offer pricing discounts, so you can refurb your club for a fraction of the usual cost!
Gym Business Templates
Take the time, hassle, and guesswork out of sales and marketing…
Our ready-made templates make it quicker, cheaper, and easier to promote your fitness business. They can improve the effectiveness of your sales and marketing campaigns. If you aren’t an experienced marketer, then templates also provide a useful guide for you to follow.
Whether you run a gym club, fitness studio, or personal training business, these templates will save you time and effort. They’ll help you to plan and organize your promotional activities so that you generate more revenue. You’ll get 40+ templates covering sales, marketing, and business start-up resources.