• EDUCATE. EMPOWER. SUCCEED.
  • Subscribe
  • Newsletter
  • Media Kit
  • Contact
  • Login
Club Solutions Magazine
  • Topics
    • Leadership
    • Marketing & Sales
    • News
    • Operations
    • Programming
  • Magazine
    • Current Issue
    • Past Issues
    • Subscribe
    • Newsletter
    • Media Kit
    • Contact Us
  • Continuing Education
    • Club Solutions Leadership Summit
    • Club Solutions Leadership Retreat
    • CS Connect Virtual Event
  • Supplier Insights
    • Brand Voice
    • Supplier Voice
    • Supplier News
  • Podcast
  • Webinars
    • Thought Leaders: A Virtual Roundtable Series
    • On-Demand Webinars
  • Buyer’s Guide
No Result
View All Result
  • Topics
    • Leadership
    • Marketing & Sales
    • News
    • Operations
    • Programming
  • Magazine
    • Current Issue
    • Past Issues
    • Subscribe
    • Newsletter
    • Media Kit
    • Contact Us
  • Continuing Education
    • Club Solutions Leadership Summit
    • Club Solutions Leadership Retreat
    • CS Connect Virtual Event
  • Supplier Insights
    • Brand Voice
    • Supplier Voice
    • Supplier News
  • Podcast
  • Webinars
    • Thought Leaders: A Virtual Roundtable Series
    • On-Demand Webinars
  • Buyer’s Guide
No Result
View All Result
Club Solutions Magazine
No Result
View All Result
Home Vendor Content Supplier Voice

Controlled Catastrophe: Profit Through Risk Planning

Max Goodman by Max Goodman
April 6, 2021
in Supplier Voice, Vendor Content
0
controlled catastrophe
Share on FacebookShare on LinkedIn

Max Goodman is a partner at the law firm SmithAmundsen, LLC, and shares tips on controlled catastrophe and how to profit through risk planning.

Club owners and operators recognize that profitable growth involves increasing revenue while decreasing costs. Fixed costs — rent, taxes, and labor — are predictable and unavoidable. The best owners and operators, however, deliberately employ a system to identify and minimize other, more unpredictable costs that while not guaranteed to occur, are catastrophic if they do. These risks include lawsuits from member injuries, sexual harassment or discrimination claims, loss of key personnel or part of your membership to a competitor (or at-home fitness options), or forced closures due to weather, natural disaster, or yes, a pandemic.

This system of implementing plans to address risk is called Enterprise Risk Management (ERM). ERM involves ranking your business’ most significant risks and assessing costs of mitigating those risks against doing nothing. Is your greatest risk another extended forced closure? Develop a plan now, such as a stronger emphasis on digital content, selling your equipment to cover immediate expenses, implementing small “freeze fees” to limit losses, etc.

A business that properly employs ERM is also more attractive to investors because it helps limit potential downside while instilling confidence. I am aware that “Enterprise Risk Management” sounds like consultant gibberish, but ERM matters because it is about money, specifically, increasing profits by minimizing losses over the long term.

To properly prioritize your clubs’ risks, it can help to learn from competitors’ missteps.

In August of 2020, Washington D.C.’s Attorney General filed a lawsuit against a health club operator, for consumer protection law violations. During the beginning of the COVID-19 pandemic, the clubs had allegedly continued charging members who cancelled memberships, along with other related allegations. This lawsuit combined with decreased revenue related to the pandemic drove this highly-successful brand into bankruptcy just a few months ago. Lawsuits against health clubs are real risks which can appear when you are least able to address them.

Take-aways from Town Sports International:

  1. Many states have specific laws about gyms’ contract terms. Be compliant. The penalties for failing to get this right are significant, sometimes including awards for attorneys’ fees.
  2. Keep member contracts short, they represent a simple deal. Long contracts reflect lazy drafters. No legalese — only plain language terms.
  3. Maintain policies for freezing or cancelling memberships that comply with consumer protection laws and which feel fair. If you need to bury a particular fee in fine print, remove it.

Enterprise risk management is not about extinguishing risk — it is about understanding it. Periodically — ideally once per quarter — write out the visible risks, legal and otherwise, within your organization along with an action plan for each. For which risks are you most unprepared? Lean on your business partners, insurance brokers, attorneys, or anyone you trust to help see the risks you are missing and to develop cost-effective plans to address them. Only by managing knowable risks can you best position your club for growth and resiliency. Whether a pandemic, lawsuits or both at the same time, catastrophe can happen. Develop a proactive plan and be ready for when it does.  

Tags: COVID-19Enterprise Risk ManagementinsurancelawRisk Managementriskssupplier voice
Previous Post

Top 4 Ways Digital Signage Can Work for Your Club

Next Post

Privacy Changes, Data and Your Marketing

Max Goodman

Max Goodman

Max Goodman is a partner at the law firm, SmithAmundsen, LLC, in Chicago, Illinois. He can be reached at mgoodman@salawus.com or visit https://www.salawus.com/attorneys-Max-Goodman.html.

Related Posts

creating careers
Supplier Voice

Creating Careers: Pay Me, Grow Me, Respect Me

May 5, 2023
health and fitness industry
Solutions On

Time for the Health and Fitness Industry to Shine 

May 5, 2023
Expert Tips on Retaining Your Gym Members
Solutions On

Expert Tips on Retaining Your Gym Members

May 5, 2023
recovery solutions
Solutions On

Recovery Solutions for Health Clubs

May 5, 2023
Younger Members
Solutions On

Younger Members: Your Club’s Next Big Opportunity

May 5, 2023
Jonas Fitness
Interviews

Jonas Fitness Delivers Reliable, Ever-Improving CMS

April 17, 2023
Next Post
privacy changes

Privacy Changes, Data and Your Marketing

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Facebook Twitter Instagram LinkedIn
Club Solutions Magazine

Club Solutions Magazine is the #1 business resource for the health and fitness industry. Established in 2003, Club Solutions provides best practice, business resources that educate and empower health club professionals.

EDUCATE. EMPOWER. SUCCEED.



The Current Issue

May Issue 2023

May 2023



Browse

  • Home
  • Subscribe
  • Newsletter
  • Media Kit
  • The Magazine
  • Buyer’s Guide
  • Contact Us

© 2023 Club Solutions Magazine. Published by Peake Media.

No Result
View All Result
  • Topics
    • Leadership
    • Marketing & Sales
    • News
    • Operations
    • Programming
  • Magazine
    • Current Issue
    • Past Issues
    • Subscribe
    • Newsletter
    • Media Kit
    • Contact Us
  • Continuing Education
    • Club Solutions Leadership Summit
    • Club Solutions Leadership Retreat
    • CS Connect Virtual Event
  • Supplier Insights
    • Brand Voice
    • Supplier Voice
    • Supplier News
  • Podcast
  • Webinars
    • Thought Leaders: A Virtual Roundtable Series
    • On-Demand Webinars
  • Buyer’s Guide

© 2023 Club Solutions Magazine. Published by Peake Media.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In