If you're a CrossFit Affiliate, or own any type of "no-frills" gym, your job is no longer to be the WOD-king. Rather, you have to be a corporate firebreather. Since most of us got into this for the sheer love of coaching, we're not carrying a lot of business background with us.
Your accountant is going to ask for some information at year-end. The bank is going to ask for the same information, in a different context, when you expand. Your landlord may even ask for some proof of revenue when you sign your lease. The math you'll do below, while related, is not the same thing as those documents. This isn't a full engine diagnostic; it's just a focused listening for strange knocking sounds.
#1 - If you haven't done it yet, put all your fixed costs - rent, wages, lights, heat, loan payments - into a cash flow calculator. This is Jon Gilson's (from AgainFaster.com):
Download Affiliate Cash Flow Calculator-Blank
#2 - Total Income Per Client
Take your total revenue for the year (not counting rental income, if you have any) and divide by your total number of clients who attended during the year.
Analysis: who is above, and who is below, the average line? For instance, if you make $40,000 in revenues from CrossFit from 20 clients, then the average spend per client is $2,000 per year. Some will be far above; some below. One initial target: get those below the line to 'par' value. It's easier to increase participation from an existing client than to attract a new one.
#3 - Total Income Per Trainer
Same. What's the average; who's above; who's below? For new staff members, some weight must be given to their newness. However, a staff member who's been around for over a year should be within 10% of gross sales of the TOP-grossing Trainer in your Box (not counting you.)
#4 - Time Invested Vs. Time Spent
Do the 1-week Sales Vs. Delivery test. How much time are you spending as an entrepreneur; how much time as a desk staffperson; how much as a Coach; how much as a janitor?
#5 - Owner's Wage
When it's all said and done, you have to eat. Has your own personal income improved more than 5% in the last year, or not? In my case, this is my weakest link: I tend to sink every extra cent back into research, staff, or other improvements at the Box. To some, it may appear noble; it's not. Your family at home - or your friends, or other support network - needs you to be around more. They also need to have something to show for being patient with your schedule.
#6 - Owner's Time
Every week, I get emails from new Affiliate owners. They're understandably excited about the prospect of working 15-hour days; about going over the bookkeeping at midnight; about sleeping at the Box, if necessary, to bring the Gospel of CrossFit to the heathens. That's awesome. It's also not sustainable.
After two years in the business, you should be able to scale back your presence by at least 10% per year. I'm also terrible in this category, by the way.
#7 - Emergency Exit - I'm not talking about insurance. I'm talking about The Worst-Case Scenario: you have to get out in less than 30 days. Perhaps your lease is up; maybe you've broken both legs; heaven forbid, you have to leave town suddenly. If you had to pay off your loans with this month's revenue - assuming you don't pay yourself, and can escape your lease - could you do it?
#8 - Attendance Growth - I frequently forget about this, because MindBodyOnline puts the graph right on my desktop every morning. If you don't use something like MBO, you need to know your attendance growth and decline on a month-to-month basis. Since cash flow trumps revenue, a 10% overall growth won't help much if no one at all shows up in June.
#9 - Monthly Revenues Per Square Foot - your landlord charges you by area. If you're not optimizing your space, you need to know. This is your starting point to identifying 'dead zones' in your gym, and rearranging to spread out your clientele better. For example, at 4:30pm on weekdays, there are 20 people in our Box. There are two per platform...but none in the back corner. In a tight space, that's 20 square feet that we're not using...and it's worth $X each month to fill it.
To expand on the relevance of this point: many Affiliates see a full Box at 7pm on Thursday night and hear, "You need more space!" That's a lot of pressure. If your space can be reconfigured to hold more people comfortably, this option should be exhausted first. Many Affiliates that I've visited recently seem to be adding more portable items, like squat racks instead of power cages, in the desire to manage growth without increasing overhead.
#10 - The BreakUps. Who hasn't been to see you in a month? Three months? Six? While I'm sure MindBody's visitor report can generate this data, it's one feature of SocialWOD that I really liked when I was walked through the system on Friday. Imagine a weekly report that sends up a red flag when Jimbo hasn't shown up since March...
I'm sure you can come up with more. This stuff is NEVER comfortable, but it IS necessary. Got physical GOATs? You should also have Corporate GOATs.
You may feel a little pinch.
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