GYM FINANCES

THE ONE WHO FEARS THE BANK STATEMENT:

WHEN YOUR GYM TURNS A BAQALA BUSINESS

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If you have been hanging out here in the desert long enough like me, you might hear the term “baqala” often. If that’s not the case, let me introduce you. “Baqala” is the Arabic term used for grocery shops and means “what comes from the ground.” You know, that small shop in your neighbourhood that you only stop at for the basics? Probably not you if you are Western; but if you’re from around here, you definitely have seen the local guys stopping by and honking to the “baqala staff” to buy some snacks and sugar their wife requested.

Baqalas have grown fancier in recent years and are now consistently regulated by the government (at least here in the UAE). They are now typically showcasing a more modern and neon lighting branding; however, I still prefer the traditional ones. I think you can still find some of them in Kuwait. 

At this point, you must be asking yourself: “What the heck does a baqala have to do with gyms?”

Back in the day, these shops would not even accept cards! Everything was a cash-only transaction with no accounting involved. All they knew was that money was coming in daily and they were able to pay the suppliers and “Al Hamdullah” some money was left to survive.

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Does this sound familiar?

The number of times I asked Gym/Studio owners to present their P&L’s (Profit & Loss Statement) to check how their gyms were doing, analyze the areas of improvement, and ultimately, evaluate if their business is profitable; and the low number of occasions they happen to have this information is scary.

Some of them happen to have a Gym Management Software that not only supports the booking of their members, but also helps to control the sales of memberships, class packages, and other services. However, this is only data and only one side of the story.

The other side of this occurs when you sadly watch your money leave your bank account to pay suppliers, rent (ouch, this is a big one), monthly utility bills, payroll, cleaning and disinfection…the list goes on and on. If something is left, you might consider yourself “breaking even.” If the money is not enough, here is the moment when you find yourself awake at night, thinking about when you are going to make it, and questioning any financial decisions you have made.

I’m with you, finances are boring! I just enjoy seeing the numbers increasing in my bank account; however, the only way this is going to happen is by “tidying up” your accounting, analyzing the data, and taking meaningful action towards your goals.

You might be surprised when you go through your monthly expenses and find those “tiny fees” that you have not been accounting for. The ones that are for your Netflix membership or your Amazon Premium subscription. We underestimate these small fees because they are tiny and minimal; although, they can become bigger problems sucking your bank account dry when you have multiple fees outstanding at the same time.

I clearly don’t encourage anyone to become obsessive or anxious about their numbers, but running away from this responsibility won’t help you grow and scale your gym, regardless of if your main objective is “to help more people.”

My top 6 Recommendations:

  • Have a detailed understanding of your monthly expenses (including those that you need to calendarize, ex: your team members holidays).
  • Include all the "silly" expenses ex: cost of uniforms for your team and the bank or payment gateway fees that are taken per transaction.
  • Calculate how many members you need to walk through your doors to become profitable.
  • I am all about investing in Marketing, however, you may be wasting lots of money on Facebook ads with a strategy that is not generating leads. Track your conversion rate.
  • Calendarize per month all the yearly payments. I know how painful it is when you see the cheque for your rent getting cash or when you need to renew your website host, gym management software and other subscriptions.
  • Really, you need a Profit & Loss statement. Choose a user-friendly template and track your revenues, expenses and cost per month, quarterly and yearly.

If you are still confused about where to start organizing your financial department; contact us! We can give you an easy framework that works for your business model that will be seamless to implement and follow on a monthly basis.

Let’s get ready to grow!

About The Author

Loreana Acosta is the founder of Fitvisory Lab. When she’s not serving her clients, she is lifting heavy weights at the gym or exploring the mountains with her dog Salma. She doesn't know where is home, she is a nomad.