The Feasibility of Starting a New Profit Center

You want to increase your club’s income, and the simple way to do that is to add non-dues revenue. But then things start to get complicated. That’s when it’s important to ask “Should I, or shouldn’t I?” and not default to “Yes, of course!” without thoroughly exploring all aspects of feasibility.

Many of these factors are routinely addressed in creating your business plan. Financing — do I have enough capital or credit to build a birthday room? Expenses — can I afford to staff a juice bar 12 hours a day? Space — can I convert a space into a Pilates room? There are permit issues including: zoning, insurance and licensing procedures to consider before you proceed.

Let’s say you have the idea to develop a Gym and Swim program for kindergarten age children. Are the schools in your community currently offering half-day or full-day kindergarten programs? This will have a direct affect on this type of program and whether or not the program offering is feasible.

With other types of programs, there are other feasibility issues. However, you could easily overcome such issues by utilizing your surroundings. Do you have a member who is certified in Massage Therapy? Do you have a member who is a registered dietitian or nutritionist? There may be opportunities to barter with members — a membership for service or leading a program. Utilize your club management software and include an “Occupation” field on your digital contract for new members. This may lead you to your new program leader.

Would your members be discouraged if the programs and activities didn’t meet your Core Values? If a youth program is frowned upon because it is taking away “Free Time” from core members, you may wish to reconsider. Utilize your scheduling program to ascertain starting times and to help balance “Free Time” in your facility.

Steps to consider when implementing a profit center:

• Evaluate your market. Evaluate the needs and interests of your members and community. Utilize your e-mail merge program to “poll” your members and guests prior to making decisions
• Establish the goals and objectives for the profit center and programs. Every program should meet your excellence standards and have an opportunity for evaluation. Plan a leadership retreat to brainstorm ideas and to set standards. You may also establish a yearlong program calendar that coincides with school calendars in your school district. Meet with your staff following the retreat to review the goals and objectives. It will be helpful to use the goals and objective to develop the expectations for your staff. Make sure that your staff members are accountable for the program planning and delivery.
• Make the most of the evaluation process for your programs. Utilize a mid-session or mid-season evaluation form to “take the pulse” of the participants. This early evaluation may give you time to correct a problem and possibly salvage a program. The mid-session evaluation should be brief. Make sure the questions force the participants to make a decision. Do not give an option for the middle of the road “Adequate” rating. Also use a final participant evaluation at the end of the program session.

Offering new programs at your club is a process that should not be taken lightly. The ramifications of developing new profit centers will affect, not only your members and staff, but the community as well. Programs should be fun and well thought out. You only have one chance (in many cases) to make a good impression.

Patti Walker holds a Master’s Degree in Exercise Science and sports studies. She works as a Sales Consultant at Twin Oaks Software. She may be contacted toll-free at 866.278.6750 or by e-mail at pwalker@tosd.com, or visit www.tosd.com.