Many economists agree that a recession is highly likely within the next 12 months, and various reports show that the economy is a top concern among consumers and business leaders alike. But, despite pinched budgets and worries over the economic outlook, clients are willing to prioritize spending on fitness.
That’s why now is the time to implement strategies that studio owners like you can use to continue thriving through every economic condition and season. As a marketing strategist and business coach to boutique fitness studio owners, I’ve helped hundreds of studio owners around the globe prepare for whatever the future brings with these three key strategies that will help you recession-proof your studio business.
Get comfortable with your numbersIt’s incredibly important to know which KPIs (key performance indicators) matter the most, to keep track of them religiously, and to use them to make quick, data-based business decisions. I coach all of the studio owners I work with to do this as a non-negotiable monthly CEO task. Put it on your calendar, do it every month, and make it a business priority. At an absolute minimum, you should be tracking revenue, expenses, and the associated profit with those numbers as well as numbers related to active clients and new clients coming into the studio for the first time. These key data points will inform you on how your marketing strategies are working (or not!), whether or not you have a sustainable profit margin, and when and how you can scale and grow your business confidently.
Manage your cash flowRevenue generation and expense reduction are key to maintaining a positive cash flow (and healthy profit!). Naturally, some months will have higher outlays than others, and it’s imperative that you are able to cover your expenses as they arise to avoid taking on unnecessary (expensive) debt.
A common expense to cut is marketing and advertising, and although it may be tempting to pump the brakes on your marketing spend when the economy is unsteady—that could be a mistake. After all, your marketing is what draws people to your business and keeps them coming back week after week. However, keeping a watchful eye on your cost of acquisition and refining your marketing campaigns will ensure you continue to see a return on your marketing investment.
Now is also a good time to build a reserve to cover any surprising expenses or pre-empt any decline in revenue. Typically a minimum of three months of operational costs should be set aside for your business to ensure you are able to sustain continuity in operations.
Become Obsessed with RetentionRetention is paramount to stability, and taking care of your clients is the key to retention. Your studio should provide an exceptional experience to your clients every visit, no matter who is teaching or what class they are taking. In between sessions, reinforce your brand promise through clear and consistent engagement. Build a long-term relationship that benefits your client and your studio through regular communication that nurtures that relationship well beyond that first visit.
All studio business owners want to prepare their business for whatever the future brings. Our industry navigated unprecedented challenges through the pandemic. That experience proved to us that uncertainty is a certainty, but we can rise to the occasion, whatever challenges come our way. These three key strategies will help your studio succeed in any economic condition.