On October 28, IHRSA, REX Roundtables and Club Solutions Magazine presented the 30th installment of a weekly virtual roundtable series, on the subject of research and data that benefits your club, aimed at helping clubs navigate through the COVID-19 crisis.
Panelists included Paula Neubert, the president and general manager of Club Greenwood; Laurie Smith, the SVP of VillaSport Athletic Club and Spa; Bill McBride, the co-founder, president and CEO of Active Wellness; and Blair McHaney, the CEO of MXM and owner of WORX health clubs. The discussion was led and moderated by Brent Darden, the interim president and CEO of IHRSA, and chair of REX Roundtables.
The following is a summary of top takeaways from the discussion, centered on cost containment and budget planning:
HIGHLIGHTS FROM COST CONTAINMENT AND BUDGET PLANNING
Some clubs are only setting goals through the end of February, instead of investing time and effort into a budget for the entire year, since things are still so up in the air.
Forecast for three different scenarios: if things continue the way they are now, what happens if there is another closure and what does recovery look like?
There are things clubs have to plan for now they never have before – deferred rent, PPE return, etc.
Where to cut costs:
- Music licensing (something you don’t think about)
- Bookkeeping – anything third party should relieve you in some way
- Events, pop-up events, member appreciation weeks, etc. organically cut costs because people couldn’t gather for months.
- Consider what events to add back and what should not come back.
- “Cut out the crap”
- Rebate insurance
- Credit card statements – subscriptions you may not need, like software licensing.
- Workers comp can be modified since clubs had less workers and is something your club should look into.
- Ask members to switch to credit card to ACH.
- Retrain staff to do cross work – considering getting rid of sales members and create an open sales area so there is more of a team approach to sales and enrollment.
- Team hiring – creating positions that have multiple roles (Ex. Staff will work front desk part time then in your club’s kids space other time)
Budgeting for cleaning supplies:
- If you eliminated towels, but increased cleaning products, you most likely didn’t see an increase of spending in this category.
- Cleaning buying prices have shifted from categories like events, so your club may not have seen a spending increase.
- Consider increasing membership prices if you are spending more money on cleaning.
- Third-party consultant warned VillaSport that over cleaning can damage equipment – creating a buildup, gumming, rusting, etc. Your club should scale back fogging and sprayers if possible. Damaged equipment can create unwanted risks inside your club.
- Budget to replace filter in HVAC more frequently.
General Leger — look at the past year expensive not just PNL. Every single transaction matters.
Utilize Google Sheets and Google Docs to track staff hours and what has been, and needs done in the club.
- Create weekly action items.
- Each task should have a verb, date it can be completed by and a person responsible.
- Measure how large or risky each active item is.
What performance should clubs be able to obtain in 2021:
- 70 to 80% capacity would be a win for clubs.
- It is estimated there will not be a total rebound in economy until 2024, so be prepared.
- There will be more optimism in a year about the industry, but it will be a fight until then.
- Future-proof your club, how are you going to serve forever?
- Crisis breeds progress and innovation.
- Clubs believe they will be a better company because of the pandemic, though painful in the meantime.
- The industry won’t be 100% by 2021.
- It is likely your club will miss the best month of the industry – January, February, March – so don’t be shocked if revenue is low.
- Greenwood’s budget doesn’t predict revenue growth in their club until September 2021.
- Focus on member experience without amenities.
- Customer experience is where loyalty is built.
- You don’t have to spend money to make a great member experience
During the panel, Neubert also expressed a win for gyms in her state by being allowed to stay open, despite moving into Level 3 COVID-19 restrictions. Read the letter the Colorado Fitness Coalition sent to state officials.
Access the on-demand version of this webinar.
Access the audio-only version of this webinar.
UPCOMING: Don’t miss the 31st installment of our virtual roundtable series, “Successful Strategies for Shaping Your Future: Virtual Events and Outdoor Fitness” on Wednesday, November 4 at 2 p.m. EST. Limited seats are available, register now.