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The top KPIs your gym MUST track

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Tracking success is imperative, especially when you’re running a gym. Ensure you’re able to double down in successful areas and make pivots in underperforming areas of the business by measuring what matters. This is how you run a consistent business.

What are Key Performance Indicators (KPIs)?

Key Performance Indicators, or KPIs, are predefined numbers that you measure the efficacy or profitability of your business against.  

But ultimately, to move toward running a successful gym, check your list of priorities against the 8 that our survey respondents laid out below.

Revenue per Member

Annual Revenue ÷ Number of Clients

Most small fitness businesses measure revenue per member. This simple calculation provides clarity and ease of tracking, which makes it such a commonly used measurement.

What revenue per member does not do, however, is give you any insight as to how or where your clients are spending their money with you. Therefore, while revenue per member is a great KPI at a high level, you’ll need more to understand what’s working and what’s not working within your gym.  

Member Retention Rate

(End Count Members – New Members) ÷ Start Count

The fitness industry has struggled with member retention since the beginning of time. Retention, the percentage of clients you retain, is critical to long-term profitability for two key reasons:

First, if you’re losing too many member, there may be something wrong with your business. Are you delivering on your brand promise? Is your pricing in line with your offerings? Are your clients receiving the experience they’re looking for? Poor retention rate is an indication that something is amiss.

Second, the only way to replace a member who terminates is to bring somebody new in through the front door. That means marketing strategies, tactics, messaging, time and expenditure along with concomitant sales effort.  

Average Daily Attendance

Member Check-In Count by Day

Despite being tracked by numerous gyms, Average Daily Attendance is only helpful in concert with other metrics. Yes, how many people come in each day is a nice number to know, but it doesn’t answer the following questions:  

Why are these customers coming in? What time(s) of the day are they coming? Are they coming in alone or with a friend? What do they do once they’re in the gym? Do they all pay?

Average Class Attendance

Total Number of Class Attendances ÷ Number of Members

Not surprisingly, Average Class Attendance (ACA) is also a highly tracked metric across gyms.  After all, if classes are the heart of your business, then ACA is critical for two reasons:

  • The ACA must support the coach, and class size will determine the break even and profitability of each class, allowing you to reschedule or replace as the case may be
  • The profit/loss on each class is a critical component to the profit/loss for the entire gym

The problem with ACA isn’t with what it measures, but rather what it doesn’t measure – revenue. If you’ve embraced internet middlemen or Class Pass, or if you’ve otherwise discounted for any reason – your attendance may be up, but your profitability could easily be down. Be wary of using this metric in isolation from others.    

Revenue per Session

Annual Revenue ÷ Total Annual Session Count

Revenue per Session (RPS) is an excellent KPI to track primarily because it measures income assigned to your class and program offerings and can be easily tracked in your fitness management software.

Not only will RPS tell you if your sessions are profitable, it ranks your sessions – and coaches – so you can determine those exceeding expectations based on day/time of a class, type of class and coach for the class.  

Given that direct expenses beyond coach's time are minimal for most classes, it will be a simple calculation to determine net income per session – one of the keys to your success.

Revenue per Square Foot

Annual Revenue ÷ Square Feet

Revenue per Square Foot (RPSF) measures how much money you’re generating from the space you’re occupying – an incredibly useful nugget of data that, sadly, is being missed by a significant number of gym owners.

RPSF is an easy calculation. For example, if your gym generates $300,000 annually and you occupy 3,000 square feet, your RPSF is $100. The average gym generates an RPSF of roughly $70, but some gym are double or even triple that.

How? RPSF tells you the spaces that are producing for you and those that are not. It forces you to view your gym and your business from a space utilization perspective and once that occurs you will readily see areas (literally) that can be turned into profit centers.

Profit Margin

(Revenue - Cost) ÷ Revenue

Every business selling anything needs to know its Profit Margin (PM). Calculated as a percentage of revenue, PM is simply how much you have left over once you’ve applied expenses to revenue.

What PM must also do is look behind the numbers. Overall profitability is the goal, of course, but are all elements of your business profitable? Are there areas that can be turned around? Or should new programs that can deliver more to your bottom line replace them?

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization

EBITDA is one of the most under-tracked metrics. You probably only review it with an accountant when it’s time to file your taxes or if you’re making plans to sell your business.  

EBITDA is a determination of a company’s operating profitability (i.e. how much profit it makes with its present assets and its operations on the products it produces and sells, as well as providing a proxy for cash flow) at a given moment in time.  

One big caveat to close us out: Don’t try to track all eight of this KPI’s at all times! Choose 1-2 to go all in on. Focus. And make changes in your business to adapt to what you’re seeing.  

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