As Canada makes progress on ‘flattening the curve’, fitness business operators are examining ways to adjust their businesses to the ‘new normal.’
With social distancing, limits on facility capacity, and stringent cleaning protocols likely to remain in effect for many months after re-opening, it certainly won’t be business as usual. Now more than ever, increasing operational efficiency to maximize cash flow will be critical to re-establishing long-term growth.
While many facilities continue to struggle with higher-cost administrative processes, including member management, reporting and bad debt recovery, savvy operators are utilizing available technology to establish a Cash Flow Management (CFM) approach for maximum efficiency, effectiveness and profitability.
Within any CFM system, recurring revenue from pre-authorized EFT bank and credit card payments remains a cash-flow cornerstone. Yet, EFT is only one component of the CFM process, which should also include:
- Member registration
- Account changes
- Increasing A/R recovery
- Reducing returned membership payments rates
- Communications, and more.
By implementing an effective CFM system, operators can identify and correct cash flow decreases, while also examining and evaluating how to capitalize on all facets of revenue generation and cost reduction.
STEP 1. Assess your flow of funds (including operational costs)
Identify potential problems by investing time to review all costs and revenue streams. Ensure your technology platform will work with your strategies to reduce costs and increase revenue.
- Review front desk and admin costs, then compare the potential savings, along with the increased efficiency, of enabling an online account for members and guests to purchase memberships and programs and make account changes.
- Customize and automatically receive reports to quickly assess your club’s key performance indicators, daily and month-to-date, to identify potential issues.
- Create auto-generated emails that target specific members, such as those lacking valid billing information, approaching their renewals dates or running out of paid PT sessions.
Step 2. Maximize cash flow from EFT bank and credit card billing.
A lot of operators are not aware there are club management software providers with automated tools to significantly improve cash flow from EFT billing. Our tracking shows that implementing a series of scheduled auto-notifications into your A/R processes, by email, SMS and other means, plus scheduling automated resubmits of outstanding unsuccessful payments, will increase A/R recovery and decrease unsuccessful EFT payments.
- To further increase cash flow: enable your members to use their online account to pay their arrears and update their billing information
Step 3. Automate Processes
- Increase front desk efficiency by having members use their online account to book their group classes and training sessions from their smartphone, tablet or computer
- Reduce costly mistakes by implementing individual permission settings for each staff member
- Use email and SMS marketing for new members, add-on memberships, membership and PT renewals, referral programs, etc.
By executing an effective CFM strategy, your business will see substantial increases in cash flow from a combination of increased revenue, reduced costs, and fewer administrative issues. Employing technology as a part of your CFM strategy will establish long term growth and is an integral component for the future of the fitness industry.