Hi!! In this episode on The Friday Society Podcast, I got to sit down with Lauren Schoenfeld, the Co-Founder of Active Core Consulting CFO & business consultant services. Active Core Consulting is a business consulting firm working with health and wellness businesses. They are brilliant when it comes to business and ownership!
In this episode we got into small business financial tips, the top questions to ask to optimize your small business finances, and tips on how to prepare your small business for a recession.
If you want to jump right into the episode then scroll to the bottom!
Navigating Financial Challenges in the Fitness Industry
In the ever-evolving landscape of the fitness industry, business owners are continually grappling with the fears and uncertainties brought on by the pandemic. Nowadays it’s especially crucial for studio owners and fitness entrepreneurs to understand the financial intricacies that can make or break their business.
Lauren Schoenfeld from ActiveCore Consulting sheds light on these challenges, offering invaluable financial strategies to help businesses stay afloat and thrive, regardless of economic conditions.
Understanding Economic Terms: Recession vs. Depression
Before diving into actionable strategies, it’s essential to distinguish between a recession and a depression. While both terms describe economic downturns, they are vastly different in scale and impact.
A recession is a temporary decline in economic activity, typically lasting a few months. Whereas a depression is a more severe and prolonged downturn. Recognizing this distinction can help business owners avoid unnecessary panic and take measured steps to safeguard their ventures.
Lauren works with clients who are considering loans to open a 2nd or 3rd studio with rates at 6-8%! This impacts their expansion significantly because money is getting more expensive to borrow.
Also, supply chain issues are on the rise since Covid so across the board we are seeing costs increase. This means instructors costs of living are increasing so there is massive pressure on studio owners to increase payroll. Many studio owners are scared to raise membership rates in fear they will loose customers.
I totally get this! However, if costs are increasing but revenue is not then this ends up being a detriment to the overall business.
Practical Tips for Recession-Proofing Your Business
Lauren shares these five practical tips for recession-proofing a fitness business:
- Separate Business Accounts and Accounting Software: Track expenses meticulously using separate business accounts and reliable accounting software like QuickBooks or Excel.
- Regular Audits and Profit Plans: Conduct regular expense audits and develop profit plans or budgets to ensure financial health.
- Debt Management Strategies: Consider zero balance transfer credit cards and consult with financial advisors to manage debt effectively.
- High-Ticket Offers and Member Retention: Develop structured high-ticket programs and focus on retaining existing clients through community-building and milestone programs.
- Expense Consolidation: Consolidate software services to reduce costs and transform underperforming areas based on member feedback.
Emphasizing Financial Reporting and Debt Management
Understanding your business finances is paramount! I stress this so much in The Friday Society Membership. I repeat this all of the time. We are here to run a business, not a hobby!
Regular financial reporting, especially monthly profit and loss (P&L) statements, provides insights into your business’s financial health. Pricing should be based on operational costs, and debt management strategies, such as zero balance transfer credit cards, can help mitigate financial strain.
Quick Cash Solutions and Member Retention
Offering paid-in-full memberships can generate quick cash, but it’s essential to manage these offers carefully to avoid cash flow issues. High-ticket offers and improved member retention strategies are also crucial.
Listen to the episode to hear Lauren’s five-step guide for creating structured programs that enhance member loyalty and retention! Remember that retaining existing clients should be prioritized over acquiring new ones!
Don’t forget!
- Get Lauren’s guide to trash expenses you don’t need, click here
- Get Lauren’s guide for creating a high ticket offer, click here
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