Your Gym Needs a Budget: How to Increase Your Fitness Business’s Profitability in Six Steps.

Pexels Anthony Shkraba 4348404- Fit Degree
Pexels Andrew Neel 2312369- Fit Degree
Blog Details Img- Fit Degree
Thinking- Fit Degree
Pexels Cottonbro 5076531- Fit Degree

Your Gym Needs a Budget: How to Increase Your Fitness Business’s Profitability in Six Steps.

Read Time :

You want your boutique fitness studio or gym to be the best. You likely even have an idea of everything your studio needs to attract more clients, compete against other studios, or fulfill the dream you set out to create. 

In a quest to improve your gym, losing sight of your budget is easy- if you had one, to begin with. As we head into fall- a statistically strong season for boutique fitness, studio owners should ramp up events and marketing, but not at the expense of their bottom line. 

We’ve talked about increasing profits by redlining your recurring expenses, but creating a budget for your studio is just as important. We regularly work with talented gym owners whose gross profits- the amount of revenue coming in each month- are impressive, but their bottom line- the amount of money left over once expenses are paid- is in the negative. 

Before you plan your studio schedule for the rest of the year, check your numbers.

Why Build A Budget for Your Gym?

As a small business owner in the fitness industry, you’re busy; you don’t have extra time for anything that isn’t strictly required. It may seem unnecessary if you don’t usually operate with a budget. However, if you’re spending without a strategy, you’re paying out money that could be directed toward owner pay, long-term profits, or anywhere other than your credit card payments.

 A budget for your fitness business will help you:

  • Forecast your revenue for the upcoming year
  • Strategize how to best spend that revenue to meet your business goals
  • Decrease overspending and unnecessary purchases
  • Predict slow months and allocate your resources to offset them
  • Illustrate where your budget succeeded and where you still have work to do in the following period

Get Started

Before you plan where you’d like to spend your money, you’ll need to know how much of it you can reasonably expect to earn and spend. If you’re an existing fitness studio owner, you’ll also want to know your historical spending habits to give you insight into your gym’s average profitability. 

fitDEGREE can support your Studio Fitness

Consult with us now!

If you have a bookkeeper or use an accounting software, pull your monthly comparison Profit and Loss statements for the last three years. It should include all the cash flow for each month side-by-side for easy analysis. If you were in business pre-Covid, you might also want to pull data from what you consider a “normal” year pre-pandemic. 

If you don’t yet track your finances, it’s easier than it may seem. For smaller or newer gyms, you can begin by keeping track of cash flow in a Google template and following the steps below. If numbers and spreadsheets aren’t your forte, click here to check out our preferred partners. 

How to Create Your Budget 

Let’s take the guesswork out of your ending bank balance each month. Follow these steps to build your budget.

Step One: Calculate Your Revenue

To determine how much you can spend, you first need to know how much you reliably make each month. Tally up all of your income sources, including:

  • Memberships/recurring revenue
  • Class packages
  • Retail
  • Teacher training
  • Workshops and retreats
  • Late cancel and rental fees
  • Any other income streams unique to your business

If you have an existing fitness business, try to include data for each of the past twelve months so that you have a complete annual outlook by month.

Step Two: Subtract Your Expenses

Expenses are comprised of two categories; variable and fixed. First, start with your fixed expenses, which are the same every month regardless of usage. These may include:

  • Rent
  • Some utilities
  • Salaried employees
  • Website Hosting
  • Software subscriptions

Next, include your variable expenses, including those required to run your business (like payroll) and those that fall under discretionary spending- which is nice but not required for regular operations (like a new certification for the owner). Other potential variable costs include:

  • Utilities -like electricity which fluctuates
  • Studio supplies
  • Marketing
  • Travel expenses

Step Three: Give Yourself a Buffer

No budget is a perfect predictor of the future. Give yourself space for planned expenses- like a new pilates reformer on the horizon or taxes, and unforeseen emergencies- such as a flood that damages studio floors. Emergency wiggle room will save you stress and is a good habit for business and personal budgets.

Step Four: Put it Together

Sum all of the data for steps one through three. If you have profit and loss statements, your job will be more straightforward because your bottom line is already calculated for you. If you’re profitable, congratulations! If not, don’t panic. Both offer opportunities to look for trends, search for cost-cutting opportunities and plan for a more profitable future.

Step Five: Look Backward to Go Forward

Now that you have your finances mapped out, it’s time to predict (forecast)what the rest of your year will look like based on your historical finances. Unfortunately, no matter how you describe it, forecasting is guesswork. The key is using your P&L to identify trends to build a budget that supports your business.  

Examine the P&L that you just created. There are likely areas to cut spending that are more noticeable than others. 

  • Payroll costs: For most studios, aim for a total payroll of no more than thirty percent of your total revenue (consult a coach who will look at your specific numbers).
  • Marketing expenses- are you throwing money into the internet and hoping it translates into leads? Audit your marketing channels for effectiveness and set a budget each month. 
  • Supplies- This is a common pitfall for studio owners. Reduce your supply budget as much as possible by shopping around, scheduling deliveries, and using an inventory sheet to reduce trips to the store. 

Step Six: Check In

For each month and each category on your P&L, create a budget total that you’d like to stick to, and then hold yourself accountable. If you hit your supply spending limit early in January, try to postpone any new non-required purchases until the budget resets the following month. 

Remember to congratulate or reward yourself for the months you stay under budget. Like your clients, you’ll build a habit if you stick to this new operating method in a few months. 

If you’re regularly going over your allotment, it’s either time to redline your expenses or revisit your budget. Were you overly ambitious in your quest to cut spending? Or do you truly need to cut costs in order to ensure your studio stays in the green? Analyze your budget monthly to make sure you’re on the right track.

You probably didn’t open your fitness business because you’re passionate about budgets and bottom lines. However, a budget is your best tool to ensure your studio pays you back for all your hours.

Looks like you are finding this valuable, would you also like our latest copy of Navigating the New Normal?
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Seven Ways to Provide Exceptional Service in Your Studio to Stand Out and Keep Members

Membership Models Demystified: Finding the Right Fit for Your Fitness Studio

Building a Strong Community: How to Foster Authentic Connections in Your Boutique Fitness Studio

Customer Spotlights: Showcasing Success Stories to Boost Gym Engagement

2024 Fitness Trends: Embracing The New Boutique Fitness Trends to Stay Ahead

Elevate Your Studio: The Power of Customer Spotlights to Boost Gym Engagement

Elevate Your Boutique Fitness Studio: Year-End Reflections for Ongoing Success

Unwrap Your Gym's Irresistible Holiday Campaign in 4 Steps.

Unleashing the Power of Newsletters: A Guide for Fitness Studio Owners to Boost Holiday Engagement

How to Boost Your Boutique Fitness Studio's Social Media Presence

Social Media Marketing For Fitness Studios: Building Genuine Connections Over Vanity Metrics

Mastering Employee Management: Best Practices for Boutique Fitness Studio Owners

Crafting a Comprehensive Handbook for Your Boutique Fitness Studio

Crafting a Successful First Year: Must-Have Events for Your Boutique Fitness Studio

Are Your Boutique Fitness Studio's Monthly Costs Weighing You Down? Here's How to Find Out

Revamp Your Fitness Studio: A Guide for Successfully Deciding When to Pivot

How to Create Effective Business Goals for Your New Boutique Fitness Studio: A Comprehensive Guide

Ready, Set, Launch: Your Fitness Studio's Complete Opening Day Checklist

How to Find, Interview, and Hire Staff for Your Fitness Studio

Boosting Your Fitness Studio's SEO Effortlessly: Simple Tips for Studio Owners

The Power of Video Marketing: How Fitness Studio Owners Can Attract More Clients

Six Strategies To Create And Market Your Boutique Studio’s Value Proposition

7 strategies for your boutique gym to compete against large brands

What Type of Financing is Right For My New Fitness Business? A Complete Guide

Six Steps to Create Your Fitness Studio’s Successful Business Plan

Your Complete Checklist to Market Your Fitness Business

How to Create a Captivating Founder’s Story For Your Fitness Studio

How to Identify Your Boutique Gym’s Ideal Client

Four Steps to Create the Perfect Mission Statement for Your Fitness Studio

3 Steps to Build a Strong Brand Strategy for Your Fitness Business

How to choose the perfect space for your fitness studio

Finding a niche for your new business

How to Leverage Business Partnerships to Improve Your Fitness Business

Improve Your Gym's Sales Success With Three Simple Questions

Black Friday Marketing: Your Complete Checklist for Fitness Studios

Three Steps to Improve Your Gym's Sub Policies

Do your staff feel appreciated? How to Improve retention with Employee Appreciation Week.

Seven Questions to Keep Your Gym Staff Happy and Engaged

The free marketing tool you need in your fitness business

Your Gym Needs a Budget: How to Increase Your Fitness Business’s Profitability in Six Steps.

Stop Doing it All: 4 Partners to Help Your Fitness Business Grow

How to Overcome Common Sales Objections to Sell More Gym Memberships

Six Ways to Improve Staff Effectiveness and Retention in your Gym

Eight Steps to Sell More Fitness Memberships

The Three Essential Objectives to Improve Gym Sales and Profitability

How to increase attendance and retention in your gym this summer

How to Increase Your Boutique Studio Sales by Optimizing Your Intro Process

Are your clients staying? Improve your gym's retention rate with these strategies

8 reasons why your intro offer isn’t converting into long-term memberships

Are large class packages harming your gym's business? How to price for competitive growth.

7 Ways to Boost Your Event Marketing and Capture Your Perfect Customer

Are You Using Pop Up Classes to Capture Your Perfect Customer? Here's How.

7 Steps to Create a 12-Month Marketing Calendar to Boost Engagement All Year

How to Maximize Guerilla Marketing to Drive New Clients to Your Gym

Is your gym set up for success? How to create and set achievable new goals in 2022

Is your staff growing your business? How to give constructive feedback to improve buy-in

How to increase your gym's profits without actually making any more money

Client Communication Excellence: Stand Out With These 4 Tools

Member Retention For Long Term Growth

Why Getting More Reviews For Your Gym Should Be A Top Priority

Referrals Should Be A Top Priority For Your Business

Navigating The New Normal

Testing And Tracking Intro Offers

How To Build Your Intro Offer: The 3 Variables to Consider

Membership Contracts and Why You Need Them

Creating A Successful Sales Process

Importance of an Initial Consultation

10 Rules For A Standard Group Class Model Pricing Structure

5 Key Factors For Creating A Revenue-Generating Pricing Structure

7 Things Your Website Needs To Turn Clicks Into Clients

5 Tips to a Successful Studio Management Software Transfer

The 5 Social Media Tools You Need Right Now

Why your Fitness Business Can't Survive Without Community and How to Build a Powerful One

7 Things Your Website Needs To Turn Clicks Into Clients

Why your Fitness Business Can't Survive Without Community (and How to Build a Powerful One)

Membership Contracts and Why You Need Them

Switching Studio Management Software: Reality vs. Expectation

How To Build Your Intro Offer: The 3 Variables to Consider

10 Rules For A Standard Group Class Model Pricing Structure

5 Tips to a Successful Studio Management Software Transfer

The 5 Social Media Tools You Need Right Now in Your Fitness Studio

5 Key Factors For Creating A Revenue-Generating Pricing Structure

How To Build Your Intro Offer: The 3 Variables to Consider

What Does It Cost to Run a Barre Studio?

How the Best Fitness Studios Niche Down to Build Their Business

How to Practice Self-Care When Your Job is to Care for Others

12 Facebook Live Tips for Fitness Studio Owners

Friends Don’t Let Friends Yoga Alone: 11 Tips for Successful Referral Marketing

How Your Yoga Practice Can Spark Gratitude

The 3 Main Ways Your Studio Website Is Failing You and How You Can Fix Them

Should You Crowdfund Your New Yoga Studio Business?

4 Reasons Your Members are Bouncing After Their Class Pass is Finished

Why Yoga Studios Are a Booming Business Right Now

Using Your Yoga Studio Business Software for Marketing 

The Importance of Having Yoga Studio Scheduling Software

Are Your Instructors Making or Breaking Your Studio Brand?

Comparing the Features of Different Types of Yoga Studio Business Software 

Best Software for Keeping Studio Management Simple

Pricing Breakdowns of the 5 Best Yoga Studio Management Software Options

3 Essential Tips for Keeping Yoga Students Happy

Posts You Might Like

Building a Strong Community: How to Foster Authentic Connections in Your Boutique Fitness Studio

As a boutique fitness studio owner, you know it's not your business is more than engaging workouts. To truly thrive and retain clients in the long run, you need to build a strong sense of community within your studio.

How to Boost Your Boutique Fitness Studio's Social Media Presence

In boutique fitness, where a studio owner's passion meets their purpose (and profits), establishing a compelling digital presence is critical to stand out in a crowded market

Crafting a Comprehensive Handbook for Your Boutique Fitness Studio

Running a boutique fitness studio requires owners to manage countless moving pieces. If you have staff, it's even more complicated.

Software Updates

Software Update Img- Fit Degree
Want to know about the latest improvements to fitDEGREE?
SEE LATEST SOFTWARE UPDATES
Black Friday
Calender Icon Img- Fit Degree
sale
Ready to switch to a more affordable, customer-friendly management tool? We've got you covered.
SCHEDULE A FREE FITDEGREE DEMO

Get all the resources
in your inbox

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

About the author:

Niki Riga
Industry Expert
Limitless Studio

Niki has been a client, a studio owner, and a coach in boutique fitness for over a decade, and she can’t think of an industry she'd rather be in. Her favorite part about coaching and studio ownership are the same: she loves supporting clients as they push past their limits and achieve their goals. Niki became a coach because she was regularly asked, “how did you do that!?” by other studio owners who were drowning in the day-to-day responsibilities of business ownership but didn’t have the support to grow their studio to its potential. She created Limitless Studio to partner with owners who have a vision for their business and are ready to implement systems to build the studio of their dreams.