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Home Operations

Recession-Proofing Your Facility

Taylor Gabhart by Taylor Gabhart
January 20, 2023
in Operations, Thought Leaders Recap
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Recession-proofing your facility
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On the latest installment of the Thought Leaders roundtable series, four panelists sat down to discuss recession-proofing your facility. Here are the top takeaways.

Recessions has been a huge buzzword in the news lately. Every day is filled with more headlines honing in on inflation and the economic uncertainty. But now is the time to start planning instead of panicking.

On the latest installment of the Thought Leaders digital roundtable series, four panelists sat down to discuss how health clubs can recession-proof their business.

For panelist Mark Miller, the COO of Merritt Clubs, one key step is to start addressing the issue.

“Plan for situations,” said Miller. “In most of our clubs we plan for medical situations — active shooter responses, heart attack responses, how to use AEDs, Code Adam, etc. But do we ever really anticipate some situational planning on closures, recessions, etc.? Start having those conversations now and anticipate for the next two to three years.”

Another practice that will help you recession-proof your club is to cut unnecessary costs.

“For us with our multiple locations, reviewing all our lease terms, rents and anything that is a negotiable contract,” said Justin Drummond, the COO of Ohana Growth Partners, a franchise division of Planet Fitness. “Make sure you have an understanding of that and the dates of those as well. Maybe there’s an opportunity to have some saving if we’re able to negotiate renewing a lease term earlier rather than waiting until we satisfy the entirety of that term.”

Ensuring you’re operating efficiently is another way to cut costs.

Paula Neubert, the president and general manager of Club Greenwood, said they invested in a building automation system that shuts down lights, AC, etc. when no one is in the building. All studios like their hot yoga studios only turn on when classes are scheduled and turn off when they’re over. “Putting systems in place that can save on your expenses — whether its utilities, gas and those types of things — helps,” she said.

Panelist Christopher Montoya, the president of Thrive Business Development, said he cut costs in just reviewing schedule overlaps.

“We looked at all our schedules and found 15 minutes here, 30 minutes there, and it was about a $20,000 a month savings in just staff redundancy,” said Montoya. “Look at where every little dollar goes.”

While analyzing your costs is crucial, there is one area the panelists recommended investing in — your staff.

“Our people are our most important assets,” said Miller. “For us it’s about getting the right people and ensuring they feel cared for and loved. We don’t want people to be stressing about if they’re going to be losing a job during a recession. So, we’ve made it very clear that is the last ditch effort. Many of the higherups will cut their pays, renegotiate rents, whatever we can, and the last-ditch effort would be to ever fire somebody.”

Drummond echoed this.

He said they’ve been looking at their onboarding services, training services, and surveying staff to see what they want outside the normal things of flexible hours and the financial components. A lot of that feedback has been requesting personal and professional development.

“We’re going to do anything we can to keep our team afloat,” said Drummond. “We did the same thing during COVID-19 when we were shutdown. We were able to keep our team on the entirety of the shutdowns in those states. That means more than you know to the staff. They know we have their back just like they have ours whether open close, recession or not.”

While the COVID-19 pandemic was extremely challenging, Montoya and Miller said everyone is better for it. They learned how to operate at a much higher level, and now they’re expecting their staff to as well.

“But on the opposite end of the spectrum, it seems like members have gotten worse,” said Miller. “Their behavior and their treatment toward our staff have gotten way worse. I think it’s very critical that all of us in this industry make our staff feel supported, so when a member is bad to them, rude or disrespectful, we protect our employees. They are going to do a lot more for us and they’re going to help protect our businesses and organizations. Sometimes we have to remember it’s okay to lose a member. If they’re going to treat our staff badly, we don’t want to lose the employee that’s going to take care of the other 10,000 members we have.”

Overall, there’s no way to prevent a recession, but there are avenues you can take to prepare before it hits.

Learn more by watching the full roundtable below.

Stay ahead in the fitness industry with exclusive updates!

Tags: featuredfinancial planningfinancial well-beingoperationsRecaprecessionrecession planningThought Leaders
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Taylor Gabhart

Taylor Gabhart

Taylor Gabhart is the editor of Club Solutions Magazine. She can be reached at taylor@peakemedia.com.

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