Financial Considerations for Reopening Your Health Club [LIST]

You’ve likely reconsidered your financial strategy many times in the last few months, and as you reopen, you’ll need to take an even closer look. This list will help you navigate the new normal.

The COVID-19 pandemic has drastically changed the fitness industry as we know it. The financial impact to clubs across the world has been massive. As countries slowly begin the process of recovering from this global pandemic, health clubs are among the first businesses allowed to reopen in some areas. As a health club operator, you’ve likely reconsidered your financial strategy many times in the last few months, and as you reopen, you’ll need to take an even closer look.

We’ve put together lists of items you should consider under three areas:

  1. Financial health
  2. Revenue streams
  3. Cost centers

Our hope is that these lists will help you navigate your financial strategy when opening your business following COVID-19 closures.

Financial Health

  • Cash flow: Consider lines of credit at a local bank, investors, government agencies, other sources.
  • Create detailed monthly financial reports for at least 12-18 months with backup assumptions.
  • Review all expenditures and contracts for any potential savings as you resume services. See IHRSA’s Potential Savings During COVID-19 Closure Checklist for tips.
  • Explore any flexibility with mortgage or rent. See our article, “5 Tips for Negotiating With Your Landlord,” for more information.
  • Relief funding: Access any federal, national, provincial, and state funding that may be available to you.

Revenue Streams

  • Membership pricing: How will you accommodate members who canceled or froze their memberships while you were closed? What will membership dues look like if you have limited hours or services?
  • Ancillary revenue categories: Are you able to resume your pre-closing spa, retail, guest fees, child care, and food and beverage offerings?
  • Marketing: How will you re-engage existing members and attract new members with limited services and virtual offerings?
  • Virtual offerings: Consider changes in your online content offerings and whether you should combine virtual workouts with an on-site club membership.

Cost Centers

  • Staffing: Determine new labor needs, compensation, and incentives. Can staff make up lost work hours with additional cleaning hours?
  • Fitness floor/equipment changes: Will you need less equipment? More? Can you schedule maintenance for equipment that is taken out of service to accommodate social distancing guidelines?
  • Inventory: It is likely that new or additional sources of cleaning supplies and protective equipment will be needed and in some cases required by local or national governments. Investigate costs for these new expenses.

In the uncharted territory of post-pandemic operations, there will still be many changes ahead. Keeping your financial strategy in line is one way you can maintain control of your business. We hope this list will help get you back on track as you reopen and navigate a new normal.

Located in the U.S.? Learn more about future savings with IHRSA’s Group Purchasing Program.

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IHRSA Staff @IHRSA

This article was a team effort by several IHRSA experts.