Competition in the fitness industry is fierce. New clubs seem to open daily, and everyone is fighting for members. The obvious goal for all operators is growth--both in number of members and locations. But as much as you may dream of having dozens of locations across your region, the reality is that only few are set up to succeed. Launching additional locations is a costly venture and if done poorly, could literally cause a once profitable business to shutter.
Introducing The Club Scalability Map...
The Club Scalability Map highlights the two necessary variables needed to scale: market opportunity score and business systems score. The market opportunity score measures the space in your market for more of your particular niche of club. The business systems score measures your business' operational capability to handle additional growth.
How does your club perform in these areas? Add up your points out of 5, and find out where you lie on The Club Scalability Map.
Mapping Your Market Opportunity Score
1. My club has a defined niche. (1 point)
What are the specific needs your club satisfies in the market? You can’t be everything to everyone, so defining your niche is the first step in determining how big your market opportunity is. Popular examples of niches include SoulCycle, a specialty studio, Equinox, a luxury health club, and Planet Fitness, a low-price, high-value club. Niches can be defined by price, amenities, member experience or all of the above. For more on various niches by facility size see The Great Health Club Showdown.
2. There are not many competitors in my niche. (1 point)
How crowded is your niche? It doesn’t matter if you offer what you think is the most unique classes, luxury facilities or competitive price, the reality is if there are a ton of other clubs in your area offering the same thing, it’s going to be harder to scale.
3. There is expected future growth in my niche market. (1 point)
Be honest with yourself, do you see demand for your niche increasing or decreasing over the next five years? For example, demand for small, value clubs has increased dramatically over the past two years, while larger, full-service clubs have struggled to keep up.
4. My niche appeals to a large group of people. (1 point)
Does your club have a large enough target market? It doesn’t need to appeal to everyone, but it needs to appeal to enough people to grow. For example, a club specializing in workouts for expectant mothers could have a sizable market, whereas a club specialized for senior MMA fighters may be a bit too narrow.
5. My startup costs decrease with scale. (1 point)
Will your next location cost significantly less to open than your current one? The more clubs you open, the cheaper the costs should be. You have consistent branding collateral, signage and facility design that can be applied to any new club, along with the technology to seamlessly link new locations to your member management systems. These kinds of templated systems will ensure your costs for new locations are low.
Pause! Add up your total market opportunity score out of 5.
Mapping Your Business Systems Score1. My marketing strategy is effective for reaching members. (1 point)
Do you have a clear strategy for how to communicate with prospects and members? You should have a multi-channel strategy that includes both traditional and digital medias. This includes your mobile app, club signage, emails, push notifications, social media and website.
2. My business processes are automated and efficient. (1 point)
Are club operations automated? It may be okay to run member referrals and club challenges on a clipboard when you have only one location, but the costs of these inefficiencies can add up dramatically as you scale. Implementing automated digital systems such as a MMS and Club Mobile App will enable you to handle tasks for large numbers of members efficiently and without errors.
3. I have systems in place to make data-driven decisions. (1 point)
Do you know exactly how much money is coming in every month? How about how many new members you gained versus those that cancelled? You should have systems in place that quickly provides the data needed to answer these questions. A good MMS should provide a lot of these metrics. You should make strategic business decisions based on these metrics, as poor decisions that have a small impact on one location scale exponentially as you launch more locations.
4. I have an effective member feedback system in place. (1 point)
Do you know what your members actually think of your club? You accurately measure the efficiency and effectiveness of your staff members, marketing department and fitness instructors. You should also have effective feedback mechanisms where your members can let you know about bad experiences they have. As your club grows, the less you’ll be on the floor with your ears to the ground, so having a good feedback system is vital for success.
5. I have the technological tools that reduce my dependency on staff. (1 point)
Are your operations digital? Tools like a digital check-in system could reduce the need for some front desk staff. Though having one less staff member upfront may not make a huge dent in your expenses with one location, over many locations this could add up to hundreds of thousands of dollars in savings each month. Having member-friendly technology is also key, as making it easy for members to check-in, view class schedules and purchase PT sessions through your mobile app and online creates a more seamless club experience.
Add up your business systems score now!
The Club Scalability Map
Bottom Left: Market opportunity and business systems not fit for scaling
It seems like your niche is either too specific or too crowded. You also don’t have the proper business systems to handle a large influx of growth. Work on improving your business systems and figure out a target audience to cater your offers to.
Upper Left: Market opportunity not fit for scaling
You have all the right business systems to handle many members, however your current strategy in the market isn’t ready for growth. You may need to rethink your offerings to appeal to a larger audience.
Bottom Right: Business system not fit for scaling
You have a scalable market opportunity, however your business systems currently cannot handle growth. It’s vital to have automated business systems that allow you to create data-driven decisions and effective marketing programs. This allows you to reach your members by the push of a button via mobile and desktop, eliminate confusion over group class schedules, offer digital ways for members to refer a friend and ultimately be empowered to track what’s working and what’s not.
Upper Right: Growth ready
You are ready to scale! You have the right business systems in place and market opportunity to grow your club. There is a growing number of people interested in your niche and you have the business systems to handle that growth.
Ready to put all the right business systems in place at your club?