Unfortunately, many health clubs are feeling the pinch of the economic recession we're experiencing. This week Lifetime Fitness announced that they are laying off 100 employees from the Minnesota head office. At the same time, Lifetime Fitness announced that their goal for new gyms in 2009 has been reduced from 11 to 6.
The Lifetime Fitness MN office has been around for about 16 years, and has never had to endure layoffs before.
Lifetime Fitness stock dropped 33 cents, or 2.8%, on the news.
With so many of the 'big' players hurting, what can the small health club owners do to protect themselves?
First of all, gym owners need to be trimming the fat right now. We're not talking about body fat, either! Now is the time to be reducing any expenses that you can and getting your overhead down to a manageable level.
For most fitness center owners, their largest expenses are the 3 L's: lease, labor and liability.
If you're struggling to pay your monthly lease, there are some steps you can take to help make ends meet. First of all, you should consider going to your landlord and negotiating a lower lease. There's nothing wrong with just "laying it on the line" and stating that you can't afford to pay the full amount. If you've been a good tenant, the landlord may grant a temporary reduction. You may want to remind the landlord that, in this economy, there's not exactly a line forming to rent from them!
If the very thought of negotiating with your landlord makes your knees knock with fright, then you should consider taking a course by Brian Tracy. We recommend this one: Learn how to influence others - Simply by using your words. Brian Tracy's - How to Talk: Secrets of Great Communicators. Learn how now.
Labor is the next easiest expense to control, as we've seen today with the Lifetime Fitness layoffs. Nobody likes to eliminate jobs, but the hard and cold fact of the matter is that sometimes there's no other option. You may need to work more hours yourself to make ends meet. Keep in mind that such a move will probably be temporary, as you can always call those laid off employees back when things pick up again.
The third expense "L" is liability. It's entirely possible that you can save some money on your liability insurance just by shopping around. The www.cuecd.com team has seen rates vary by as much as DOUBLE for the exact same health club liability coverage! It will just take a few minutes to shop around for an insurance comparison, and the payoff could be huge! While you're at it, you should also take a few minutes to shop around for personal insurance quotes. You can Get a FREE quote with AIGDirect.com. Click Here.
When trimming expenses you should also take a good hard look at your "cost of doing business" monthly expenses. Are you leaving the lights on at night? Could you turn the heat down just a little bit? Small changes can make a difference!
Finally, are you paying too much for debit and credit card processing? When's the last time you shopped around for payment processing quotes? One of the best processors we've found is Electronic Transfer, and they're probably worth checking out. You can find more information here: Accept Credit Cards - Free Credit Card Processing Set Up
Cutting expenses is just one piece of the pie, but a necessary one if you're going to continue to survive or thrive in this market.
The goal by cutting expenses is to help you earn more money. Another goal you should keep in mind right now is saving whatever cash you can. Many health club owners fall into the trap of reinvesting too much into their business and never paying themselves. It's always something they can do tomorrow, and for many tomorrow never comes. Personal financial success is one of the reasons why we all got into this business in the first place, isn't it?
If you're a gym owner who has been neglecting to pay yourself, and you have some available revenue to do so now, then we recommend that you check into ShareBuilder 401(k) for Small Businesses
If you're in the same boat as Lifetime Fitness, and you're now between a rock and a hard place financially speaking, then maybe the best step for you is to talk with an attorney about your legal options.
Although the www.cuecd.com team does bring you TONS of FREE advice about how to best own and operate a health club, we are not lawyers and we are not qualified to issue legal advice. If you're in a position where you need to take a good, hard look at closing your doors, then you need to speak with an attorney. Again, price is a consideration here so we recommend that you perform an attorney search by using Legal Match: Need a Business Lawyer?
The bottom line is that your business planning process simply cannot slow down during this economic recession. On the contrary, this is exactly when your health club management skills need to kick into high gear! Cutting expenses is one very large piece of this puzzle, and we sincerely hope that you take the time to at least consider your options when it comes to controlling gym costs.
In the meantime, don't forget that health club marketing and health club promotions are more important now then ever! We encourage you to check out our FREE library of health club marketing articles today. Here you'll learn how to sell gym memberships on a budget, and that's good advice in any economic situation!