Setting and Evaluating Business Goals

Our present economy doesn’t lead to a graph like this without careful planning, are you prepared?

How did you do this year? Did your business live up to your expectations?

Do you know your margin?

Did your personal income grow?

Is it where you want it to be?

It’s my experience that when asked these kinds of questions most fitness professionals don’t know the answer, except for the part about personal income.

And that’s usually a no.

As we get set for the New Year it’s now a great time to look back at the year. (And again in January once your 4^th quarter financials are complete.)

Total Leads

Set(# of set sales appointments/month)

Show (Average % of sales appointments that show up)

Close (total long term program sales/month)

Average Sale Amount

Average Monthly/Quarterly total EFT Sales. (The sum of the monthly payments of the packages sold)

These are all metrics that give you the basic “today” health of your business.

How did this year compare to last?

When you’ve been in the fitness business as long as I have you know that each year is a little different, that our business is seasonal, but it’s never quite the same year to year.

I’ve found it really helpful to look at the averages of the above metrics and see how consistent you are/were from one year to the next. If it’s your first year in business it sets the stage for the next year.

If you’ve been following along with my philosophies for running a fitness business you can compare the above to you marketing calendar and draw some conclusions about what things worked best and should probably be repeated, and what areas can be improved in the coming year.

Most importantly these numbers give you a framework to set goals and make the “day to day” plan for activities to keep driving your fitness business forward.

Next if you compare the total transactions of your billing pool (EFT) at the end of each month or quarter to the total number of long term packages sold (closes) you can get a basic sense of what your client attrition looks like.

The longer you are in business the greater the likelihood you will have some steady amount of attrition, it’s just the way it goes. (And if you don’t you’re not charging enough for your services.)

Next is the Income Statement or Profit & Loss Statement.

Here you see the real bottom line, what was the gross margin for your business?

After expenses what was left?

Many fitness entrepreneurs can be a little surprised to see how low the percentage is when they first begin paying attention.

Have a look at what percentage of revenue was spent on payroll, marketing, and supplies. These can all be expense categories that if not monitored can quickly erode your margin and any real profit.

Though you may be able to drastically effect them one month at a time I’ve found that in most cases it take planning and commitment long term to have a lasting effect.

Also known as goals.

We all know January through March is one of the hottest times for fitness, are you ready to maximize it?

Set some goals for next year.

You no may have an idea of what your attrition looks like, how will you out pace it?

Can you market harder and get more leads and clients? (HINT: Divide total sales/quarter by total money spent on marketing to get your marketing cost per customer. Do the same with total leads to figure out your cost per lead, then use this to set your new marketing budget based on the number of new customers you’d like.)

Looking at these few pieces of data will raise other questions.

What are the reasons for cancellation for those that do cancel or not renew?

Why isn’t my closing % higher? (Build your sales language.)
Why isn’t my show % higher? (Not enough follow up prior to appointment.)

How can I keep payroll under 40% (for one-on-one businesses) or 25% for group training businesses?

A lot of people are intimidated by looking at the numbers of their business, but don’t be, it’s much like getting a report card back in grade school.

As you begin to gain an understanding of what they mean it gets easier to see them improve, and each time they do you are rewarded with a change in lifestyle!

I know these things can be intimidating, I hope this has given you food for thought.

Don’t let fear of something you’re not confident in stop you from building the business and lifestyle you deserve, this is one of the biggest areas I spend coaching other fitness professionals just like you. My shameless plug for coaching, if I can help you I’d like to, learn more at www.7figuremastermind.com