Financial Strategies: Balancing the Books
Adam Sedlack, CEO of UFC GYM and Robbie Sprechman, the CFO for Retro Fitness, share financial strategies to implement during uncertain times.
Money has been the center of nearly every conversation gym owners have had in the past year. Whether focusing on new revenue streams to add, how to continue to pay employees during shutdowns or applying for recovery loans, it’s clear facilities are looking for successful financial strategies.
Many clubs are currently cash strapped and are searching for new revenue sources they can add. One steady revenue stream your facility can implement is a recovery or relaxation room, which is exactly what Adam Sedlack, the CEO of UFC GYM, is doing by adding recovering stations at every location.
In fact, Sedlack said UFC is prioritizing holistic health moving forward.
“That means compression therapy. That means cryotherapy, massage, hydration, aqua massage and supplements, and so on,” said Sedlack. “We’re proud of the recovery product we’re going to be presenting to all of our customers because if you think about the athletes of today — let’s just take Tom Brady and LeBron James — everything they’re talking about today is how they take care of their bodies. Like Tom Brady who has been able to play in the NFL at 43 years of age, he does that through recovery. So, we think recovery is going to be a channel of just exponential growth, which will be important.”
However, if your facility is not in a place to add another offering, looking to adjust your strategy for navigating financial uncertainty can also be beneficial.
Robbie Sprechman, the chief financial officer for Retro Fitness, recommends holding onto cash if you go down this route. He suggested openly communicating with all your vendor partners. “If you keep the lines open, you will have a better chance of working out deals or payouts,” he explained. “As hard as it is to consider, play offense. There are and will be opportunities due to the pandemic.”
In retrospect, Sprechman said he should have acted quicker in protecting Retro Fitness’ cash.
“Don’t get me wrong, we did what had to be done but it took a little while to wrap myself around what was actually happening,” explained Sprechman. “That being said, we kept our entire team intact for as long as we could. Thankfully, we had done a great job building up our balance sheet pre-COVID.”
Whether you lean on your state alliance for help coming up with new revenue streams or government funding to continue paying your staff, there is assistance readily available. While Sprechman doesn’t have all the answers, he does have one final piece of advice in regard to financial planning during this time.
“Be even more conservative than you have ever been in planning and take advantage of every local, state and federal option for aid,” said Sprechman. “Whether it’s the Paycheck Protection Program, Employee Retention Tax Credit, Economic Injury Disaster Loans or Small Business Administration, there is help there. And maybe more coming if the Gym Mitigation and Survival Act legislation introduced at House of Representatives gets signed into law.”