Where Can Your Business Make Money?
Additional income, doesn’t that sound great! And it is, if you manage to do it well.
Additional income or Secondary spend could be the difference between your business performing well and your business performing brilliantly!
There are numerous types of secondary spend opportunities: product sales, additional service upgrades, facility rental, personal training rental just to name a few.
Here are a few tips to go by when thinking about your secondary spend income across these areas…
Product sales
Product sales can be a great source of secondary income. Protein, gym accessories, health care products… The list goes on but important that you tailor this offering to your clientele! If you are running a female only weight loss studio, you probably don’t want to be stocking a high calorie shake just as if you are running a heavy body building facility you probably wouldn’t be looking to sell a ‘detox’ tea!
You must also understand your margins. What is your Gross Profit % for every product and how is that affected if you are putting on promotions etc? How much stock do you have sitting on your accounts and are you ensuring that everything is costed and accounted for? If you are running a competition where you give away a free bag of protein or do your staff get it cheaper or free? This must be accounted for in your GP% of your stock.
So product sales can be a great addition to the profitability of your business, but it is essential that you stay on top of it otherwise you could be wasting your time.
Additional service upgrades
Bolt on’s, upgrades, added extra, this can be called a number of different titles but the concept is usually the same. Members paying a small additional fee to have access to something that their standard membership does include. This could be a couple of personal training sessions each month, access to special classes or seminars or even free towel higher. This is a great way to increase your monthly revenue whilst also pleasing your membership base, giving everyone the opportunity to receive something additional to the ‘standard’ at a small additional monthly fee.
The cost to this is often spent on staffing or initial purchasing of certain products but as long as the forecasting for monthly uptake is accurate, can be a highly effective tool to increase your monthly revenue.
Facility rental
Have a look around your facility. Is every square foot in use 100% of the time? Or could you even free up a bit of space without it negatively impacting your membership too much? Facility rental is a fantastic income stream and simply requires you to have space & insurance. Remember the term- space is money. Renting out a room, or studio in your club is a hugely attractive opportunity for potential professional practitioners. Beauty, physio therapy, holistic therapy, massage practitioner would bite your hand off to rent a space within a club that has an active membership base and would pay a premium to do so.
So find out if your business insurance covers rental agreements and free up some space!
Personal Training
One of the best forms of secondary spend income opportunities for a fitness business. Now there are many ways to run a successful PT income stream in your club. We have worked with clubs that make over 100K revenue per year just through Personal Training income. The trick is to find a balance that will allow your Trainers to build a successful business whilst also buying into the business growth. The better your business does, the more members they can sell themselves to, the better their business does!
What’s the cost? Maybe some uniform, including them into some of your staff perks/ benefits, potentially offering them some training in growing their business & marketing themselves… really not a lot!
It’s a fine line but when you find the balance, this can be one of the key income strands that really accelerates your business’ profitability. So don’t see your primary product as the only source of income. It may well be your main source but there are a number of other revenue streams that will increase the profitability of your business.
