The warm sunlight of a Saturday morning streamed through the large front windows of their gym. The rhythmic clanging of weights combined with the distant hum of treadmills created an energetic backdrop for the lively conversation between Brian and Tanya, co-owners of Iron Pulse Gym and a married couple.
“Brian, this needs to stop,” said Tanya, annoyed. “We’re barely surviving over the summer and wondering if we can pay everyone. Why does it feel like the gym is running us, and not us running the gym?”
In their small office, Brian stared at the piles of invoices and bank statements spread all around the room. Despite having brushed off Tanya’s concerns before, he now understood that the moment for dismissal had passed. The joy they once experienced when their members reached remarkable milestones in their lives has faded, largely overshadowed by the pressing financial challenges they now face.
“I understand, Tanya. There has to be a more efficient way. We are doing all this work and I don’t see where the money is going. We need to resolve this.”
The Moment of Making a Decision
Iron Pulse Gym was a venture they envisioned jointly five years back. From the moment the two of them opened the business, they tried their best to build a community. However, they had always struggled with the finances. I mean, Brian did have some spreadsheets and Tanya monitored certain expenses, but other than those, they were completely lost.
It was Tanya who initially found Healthy Bodies of Finance, a boutique accounting and financial firm, that specializes in the health and wellness industry. She discovered the company while looking for “Financial Management For Fitness Centers & Gyms” and stayed up late reading testimonials from other gym owners who successfully changed their businesses utilizing the service.
“Brian, I do think we should connect with these people. They help gyms forecast profit and help with managing cash flow. This is just what we are looking for.”
After their 60 minute consultation, the partners opted to utilize CFO services from Healthy Bodies of Finance. The couple was apprehensive about injecting more cash into the business, feeling already resource depleted, however, they knew they needed to break their constant spiral.
The Numbers Don’t Lie
The initial meeting with the owner from Healthy Bodies of Finance was very revealing. Brian and Tanya met with an assertive, but amicable woman named Lozelle. Right off the bat she had questions, a lot of them. Lozelle was not playing around…
“Are you aware of the periods during the year that your memberships tend to spike?” Lozelle turned her head looking at their financial documents.
“January is obviously busy. Everyone’s got their New Year’s resolutions,” Brian stated.
“Okay, great. But what about other times? It would seem like your August slump doesn’t help along with the peak membership sales. Where do you track how much memberships are sold per month, and do cancellations reach their peak some time too?” Lozelle was asking very clarifying questions that eased the initial tension but displayed that their frame of knowledge was much more extensive than they had assumed.
“But this sort of analysis has not been conducted in the past. We just… live through the challenges,” Tanya replied while shaking her head.
In the next meetings, Lozelle progressed with them by examining their financial details, step by step. They worked together to create a cash flow forecast for the business, which would help them with understanding all the income streams and expenditures during the year. Suddenly, Brian and Tanya were witnessing things being pointed out to them that they had never realized before.
Identifying Trends
Healthy Bodies of Finance assisted them figuring some key trends out.
Membership Increases: As always, January and February were the biggest months, but there was also an increase in September when children returned to school and parents got back to focusing on themselves.
Membership Cancellations: A relatively sharper increase in subscription cancellations was noted in June and July, when families left for vacation.
Greater Expenses: In the Spring, increased costs for equipment repairs, because of high usage in winter, along with trying to market new member sign ups in Summer brought about greater summer expenses.
Lozelle was clear about the importance of this information. “Now that we understand when revenue comes in and when expenditures go up, we can allocate our resources accordingly. We want to make sure the high revenue months are utilized so that the slow periods do not spring any surprises.”
Financial Health Management
Brian and Tanya, with the assistance of Lozelle, developed a plan to manage their cash flow:
Building a Cash Reserve: They agreed to set aside a percentage of their earnings during the busy months in order to cover the quieter summer months; ten percent would be saved as a security blanket.
Membership Incentives: They added annual memberships in January with a small discount if customers paid in advance. This gave them a boost in cash flow to manage other expenses later in the year.
Diverse Revenue Streams: Healthy Bodies of Finance helped them with other streams of income such as branded gym clothing, wellness workshops, or on-demand workout sessions for members who traveled during the summer months.
Expense Control: They altered their agreements with vendors, focusing their maintenance during the slower months. This way, costs could be spread out over a longer period of time so they didn’t have to deal with sudden spikes.
Results
After a period of 6 months adopting their new approach, Brian and Tanya noticed a familiar change. This change had an impact on more than just their bank accounts. Their financial worries ceased to exist, which meant significantly less stress. They were no longer worrying about meeting payroll during the low periods of summer. The cash reserve gave them confidence in being able to formulate better decisions rather than having their decisions formulated for them. The patterns in their predictions offered a sense of predictability in the future too.
“I’ve always said this is the goal,” Tanya said one evening while sitting with Brian in their office looking at the cash flow statement. “Finally, the gym is additionally doing things for us instead of us having to do everything for the gym.”
Brian beamed. “I feel like a huge burden has been lifted off my shoulders!” “I think this should have been done a couple of years ago. ”Oh well, Healthy Bodies of Finance has definitely made a significant impact.”
Today, Iron Pulse Gym is thriving. Brain and Tanya no longer see their gym as a financial stressor, but as a business they love—and one that supports their family. Their work with Healthy Bodies of Finance didn’t just change their numbers; it changed their outlook, giving them the tools to build a gym that serves them, their members, and their dreams.
For Brian and Tanya, financial freedom wasn’t just a buzzword—it became their reality. And it all started with the decision to truly understand their cash flow.
Are you ready to change your outlook? Ready to obtain financial freedom with your gym and fitness center? Contact us for accounting and bookkeeping for gyms and financial centers. Or sign up for our “Dear Dangerously in Love with Finance” Digest to get simple and insightful financial advice on financial management for your gym and financial centers.
This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax and accounting situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. Healthy Bodies of Finance is an accounting firm that specializes in working with health and wellness providers. We provide monthly accounting & bookkeeping services and financial education. For more information on our specialized services for health and wellness providers please contact us at [email protected]