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Top 10 Ways to Double Your Gym’s Income

There are no shortcuts on the road to success, but there are proven methods that can increase your likelihood of avoiding potholes & detours and at arriving safely (and with some more money in your pocket). I absolutely LOVE conducting experiments in my Gym-Biz Laboratory. Fortunately, some of my experiments succeed (but most fail pretty miserably).

Here is my Top 10 List:

  1. Auto-Pay with Credit Card with 30 day notice of withdrawal

All students are enrolled in our monthly auto-pay system with a credit card attached to their account. Each month we push the magic button to run tuition. We ask for a 30-day written notice of withdrawal so we have time to fill their spot (or perhaps save them from withdrawing).

  1. 100% Money Back Guarantee

We ended our Free Trial Program 3 years ago and replaced it with a 100% Money Back Guarantee. This has cut down on our administrative workload, increased revenue by charging for EVERY CLASS (instead of giving away a free class) and actually builds goodwill when we have had to make good on our guarantee (thankfully this is a rare occurrence). As an added bonus, it inspires confidence in our staff and customers that we believe in our program enough to bet tuition on our students happiness.

  1. Courageous Pricing (Minimum 3% Annual Price Adjustments)

Pricing our services is both an art and a science. Our pricing reflects not just our costs of operating, but also indicates the value WE feel we are delivering. We strive to be the pricing leader in our industry by demonstrating continued reinvestment, learning and innovation.

  1. Continuous Enrollment

Our sessions never end! We began a year-around schedule and never looked back. A certain times of the year we may need to make minor adjustments and we continue to educate our customers that gymnastics is a year-around sport.

 

  1. Online Registration

Just do it! I have yet to hear anyone say they regret letting customers register 24 hours per day.

  1. No Pay = No Play

This is a tough pill to swallow, at first. We have instituted a zero receivables (no one owes us money) policy 5 years ago. This coincided with our Auto-Pay system. Additionally, we stopped taking checks as well. This reduced our administrative costs and collections. Can you drop your kids at the movies and pay after they enjoy the show?

  1. Open Book Management with Leadership Staff

Sharing the inner financial workings of your business is an educational endeavor that yields enormous returns. This levels the playing field by informing key leaders on how things are going financially, thus equipping our decision makers with vital information they need to be successful.

  1. Performance Compensation for staff based upon overall results

We are a team. We are all in this together. If one side of the boat is sinking, we all need to bail. We have made several attempts to break apart our organization into mini-segments and assign percentages of fixed costs – all of which failed. Our team approach is just right and keeps everyone rowing in the same direction.

  1. Summer “FREEZE”

This is basically a withdrawal form AND a re-enrollment form built into one. We allow members to hold their spot in their class for up to 8 weeks between June-August. The majority of members who freeze their membership do so for 4-6 weeks. We do not charge for the freeze but do begin charging their tuition when their freeze has thawed.

  • Weekly Reporting of KPI’s

We report weekly our Key Performance Indicators (KPI’s) to our leadership. Measuring our KPI’s weekly provides valuable data our leaders use to manage their programs and evaluate performance. KPI data includes enrollment, instructor hours and class/program efficiency.

  • *(Bonus) Only surround yourself with people that have a quality you admire

We spend a lot of time with our fellow staff members. Let’s make the most of that time by picking the very best people to share our days. This is my quick-test to see if we have the right people on our team!

Gym Ownership Has Been Life-Changing

Diane Trifiro and her husband Tony had been involved with Hand2Hand Gymnastics for a long time: since their son was a mere boy. Their son’s love for gymnastics only grew as he matured. He began to coach and discovered a career that he loved. That is when he and his parents met a heartbreaking impasse: the owners of the gym were retiring. After all of these years, it seemed impossible to the Trifiros that their son would have to lose his dream of one day owning the gym.

Well, the Trifiros had faced an impasse all their own a few years earlier in the career department and time didn’t seem to be on their side in resolving things.

More out of curiosity than planning, Diane did a little research into the possibility of buying the gym and found that they could make it work. So why not go for it? Maybe it would be a stop-gap until other paths cleared and it would allow their son to continue working toward his goal of being a gym owner.

“It’s been almost five years since we bought the gym and we’ve never regretted it,” says Diane.

If really was a leap of faith. Having worked in the office prior to the takeover, the Trifiros relied on their customer service knowledge, the examples of other gym owners and just plain common sense.

“It has truly been a blessing in disguise,” Diane adds. “We had tried a couple of things to generate income but nothing provided a consistent income like we were accustomed to living on. The gym has restored financial consistency to our lives and put us in control of our own destiny.”

The Trifiros are beyond thrilled with their exit plans for their gym. No students (at least for the next generation) will have to wonder what will happen to their gym when the owners retire. The Trifiro’s son and his wife are the next-generation owners! Involved in acrosports and gymnastics, the young couple will make the perfect recipients as the Trifiros pass the torch.

How Much Am I Worth? It Depends Who’s Asking…..

“What am I worth?” is an interesting question because it largely depends on who’s asking and why. An insurance advisor is considering your future. A headhunter is examining your track record and potential.

But if the IRS is asking, you may need some help with specific expertise determine this answer.

Let me explain by taking a step back.

As pass-through entities, S corporations generally do not pay entity-level tax on their taxable income. Instead, taxable income is allocated among the shareholders who report the items and pay the corresponding tax on their personal income tax returns.

This S corporation flow-through income has long enjoyed an employment tax advantage over that of sole proprietorships, partnerships and LLCs. This advantage states that a shareholder’s undistributed share of S corporation income is not treated as self-employment income. In contrast, earnings attributed to a sole proprietor, general partner or many LLC members are subject to self-employment taxes.

Payroll taxes on employers, employees and the self-employed have increased dramatically over the years. As these employment tax obligations have climbed, the advantage of operating as an S corporation has become greatly magnified. Because S corporation income is not subject to self-employment tax, there is tremendous motivation for shareholder-employees to minimize salary in favor of distributions, which are also not subject to payroll or self-employment tax.

So if the IRS asks what you are worth as an S Corp owner, you need to play by the IRS’s rules and be ready to defend your self-employment income. Those rules are helpful but not definitive. You’ll need to take a look at the IRS guidelines, combine that with the most recent court cases and lastly do LOTS of research and comparison. As with any other wage determination, you should consider all the available information, and make a reasonable determination that is fully supportable.

It may be hard to believe, but most S Corp owners just give up and guess. The problem with guessing is that without backup for your Reasonable Compensation figure, you have no defense when challenged.

The best advice I can give any S Corp owner is this: Don’t procrastinate and pray. If you are just guessing at a reasonable compensation amount then you have no defense if ever challenged.


EXPRESS PAYROLL
has tons of data and salary comparisons from hundreds of businesses just like yours and has the expertise to help you determine the answer to this very important question when the IRS is asking. We can help get you on the right track.

Express Payroll is run and operated by CPA’s and trained accountants that specialize in the GYMNASTICS, DANCE, SWIMMING, KARATE, MUSIC/ARTS type industries, so we can provide the one-on-one attention and support that a small business owner needs and deserves.  We have the best software product on the market and many of our features were custom built for these type of child focused centers.  We are seamlessly integrated with Jackrabbit’s Time Clock and we have several features that enable owners to delegate the responsibility of processing payroll without allowing them to see what people are paid.   Simply your Life!

Learn more about Express Payroll at www.express-payroll.com. Contact Express Payroll for more information at info@express-payroll.com or 877-774-3327.