Managing Consultants

When your fitness center is in a slump, what will you do? How will you handle increased competition when a new fitness center opens across town? Should you offer the latest group exercise craze at your facility? What about salary and benefits for your staff members? Running a fitness center isn't easy. There are many things to think about, and many decisions to be made. One person can't possibly be an expert in finances, human resources, exercise and health trends, marketing, interior decorating and so much more. Staff members can be an asset when it comes to keeping up with industry trends, and maybe your mom is a marketing genius, but there will come a time when you will need advice from an expert. Maybe you have a crisis, or maybe you are trying to avoid one, but hiring a consultant for your fitness center can be a big boost for your bottom line.

Choosing the right consultant

Make sure you select a consultant who is appropriate to your needs. Consultants will bring different capabilities and personalities to the table, depending on their prior industry experience and previous consulting engagements. Selecting the right one for you should not be an issue of price alone. Jim Thomas of Fitness Management & Consulting, Coppell, Texas, says to check that the consultant is qualified in the area you are asking them to perform. Ask questions about their background and whether they have worked in the industry. A consultant needs to have walked in the client's shoes at some point, he says. Michael Scott Scudder, a managing partner at Southwest Club Services, provides the following guidelines for selecting the right consultant:

• What are your fitness center's needs, and do the consultant's skills match those needs?
• What is the industry "track record" of the consultant?
• What does the consultant cost and what are the benefits of using him/her, as opposed to another consultant?
• Does the consultant offer a complimentary session (most frequently accomplished on the phone) prior to engaging in a consulting agreement with you?
• Does the consultant require a contract?
• Will the consultant offer an "exclusivity clause" in your area for a period of time?

Tom Perkins, a business development coach, certified personal trainer and owner of Fitness Industry Solutions, says that you do not necessarily need someone who has done this type of work before. However, your consultant needs to be able to draw together a team of appropriately experienced people. On larger projects, Perkins serves as project manager: "I assemble a team that fits the need." Perkins also cautions against insularity. "A lot of people in the fitness industry have never worked outside of the fitness industry. I see that as an issue," he says. "I try to bring in solutions from outside the fitness industry because I know they have been proven." The fitness industry has its own particular quirks and requirements, but it still conforms to sound commercial management.

Types of services

Consultants can offer many different services to fitness facilities. In one example, Fitness Management & Consulting took on a client whose business was struggling. Thomas conducted an operational analysis to determine what was working and what was not, and provided recommendations. "The client elected to retain our services to help implement these recommendations," Thomas says. The result was a turnaround in club performance, and Thomas was retained to conduct regular sales and management training. The client's business flourished, and it grew to four sites. Perkins precedes consultancy visits with questionnaires to management and staff. Sometimes this is done over the phone, sometimes face-to-face. At one 20,000-square-foot facility in Arkansas that was having some problems, Perkins met with the management and staff, and interviewed them on what they liked and disliked about their jobs. With a good feel for what was going on, he then wrote up a report of recommendations to turn the fitness center around. The facility owner also wanted to be able to track marketing - how people came in, how many had tours and other statistics. The fitness center had management software, but, until meeting Perkins, management was unaware of a plug-in marketing module that could provide everything the owner was after. These types of services are the benefit of an outsider: a fresh look at things. "Clubs can be stuck in a fishbowl sometimes," says Perkins. In the same engagement, he also discovered that the personal trainers were not performing their assessments properly on clients. This would have gone unnoticed for a long time, causing considerable damage, had management not turned to outside help. In another engagement, Perkins was hired by a fitness center in Oklahoma, which had a team of three personal trainers. "The manager wanted me to coach them, to find out what they were doing, and what they should really be making. They were struggling with thinking that they should be making $100,000, [which is what] a handful of people 'out there' said [they could make]." They came to a consensus that making $60,000 to $75,000 would be achievable. While a consultant can inject some improvements into a facility on the basis of a few visits, more value can be tapped with a longer relationship. With one fitness studio, Perkins carried out the initial operational analysis report, and then established a long-term working relationship. For 15 minutes each week he talks to the personal trainers to see how their week is going.

Rates

How much does it cost to hire a consultant? Perkins says fees in the industry vary widely. Fitness Industry Solutions offers different charging options:

• A monthly Coaching Club where professionals can join a conference call once a month, send one question a week, and have access to a membership site where they can ask questions and have access to peer coaching. This costs $97 per month.
• One-on-one telephone coaching, which is scheduled by the hour. For a facility, it runs at about $950 a month for three hours.
• Day rate of $1,600 a day plus expenses.

Scudder says that, for onsite work, there is generally a daily fee with a minimum, and reimbursement of travel and lodging costs. He says there may be incentive options - such as the consultant taking a share of specified profit improvement - but adds that these are usually to be avoided, because they frequently end up in hassles over fees for both parties. Thomas says Fitness Management & Consulting offers an agreed-upon flat fee. He notes that some consultants may offer an incentives option. "The idea of incentives always sounds like a good idea, but we never want to be in a position whereby our advice could come into question as a result of a potential self-serving incentive," he says.

Preparation

Poor preparation equals poor performance, and working with a consultant is no exception to the rule. Also, hiring a consultant is expensive. It is therefore prudent for you to prepare well for consultant engagements, and to carry out any research possible that can free up the consultant's time for higher-value work. Perkins questions whether facilities have the expertise, the time or the open-mindedness to do their own research. However, he says that base information such as number of members, charges for products and services, busiest hours, member comments/suggestions, zip code and website analysis, etc., can certainly be done in-house. "Competitive analysis and demographics should be done by people used to doing it, because the information is readily available to people who know where to get it," he says. Thomas says that the best way facilities can prepare is by "having an open mind to potential change or ideas. If they come prepared to listen, have an open mind, are willing to participate and give their ideas, then the engagement usually works well." The consultant cannot do it all for you. "Many times the client will think the consultant alone will get it done, when, in reality, it needs to be a partnership," says Thomas. "Some of the common reasons clients struggle with consultants are failure to take their advice, fear of something new, have already 'checked out' of their business, lack of a clear understanding of what has to be done and poor chemistry." Consultants know the barriers that can arise and how to break them down. But, club management can also be self-aware of how open they are being to the consultant's advice. Scudder notes some of the barriers that sometimes arise:

• Facility managers tend to be in a "we know it all" frame of mind with the consultant - they want to show the consultant how good they are.
• Managers/owners will not disclose all of the pertinent information needed by the consultant to do a thorough job.
• Managers will not schedule appropriate time for various owners, management team members, etc., to work with the consultant.
• Owners/managers want a "fix it quick" approach.

To build cooperation, Fitness Management & Consulting asks all staff to fill out a Get Acquainted Worksheet when they first go into a fitness center. This sheet asks these types of questions: What would you do if you were the owner? Where is there waste? What's one thing that could be done today to improve the club? "Many times, the answers are right in front of you," says Thomas. "When the key staff is allowed to implement their ideas (when they make sense), this will eliminate the barriers that might ordinarily be created [between management and staff]. And, they now have ownership of the idea." Perkins says, "I coach [the facility team] through the process, and like to give them options that best suit their style and philosophy. Part of the solution is asking for people to step up - saying I need a couple of volunteers versus telling someone I need them to do this." In giving feedback and recommendations, "you have to be open and honest, but also tactful and respectful." He also recommends regular contact, at least once per week, to talk to staff: "Should things get off track, it goes back to communication, talking to them, finding out what is working, what is not working, and how can we resolve this."

Common problem areas

Consultants can have an effect on club performance in many areas. Scudder says that these may include any of the following: operational difficulties, under- or over-staffing, understanding numbers and ratios and their effect on profitability, training key ownership and management personnel in how to run a business more successfully, and being an arbitrator and/or facilitator. He says another important area is marketing. The consultant can help to determine key markets with the client. "Most often, the client has no target market approach to his/her business," Scudder says. "They simply opened up a health club and hoped!" Scudder says there are three key areas in which clients stand to gain the most from employing a consultant:

1. Increasing profitability in their operations (average 10 percent or higher increase).
2. Increasing membership retention (average 10 to 20 percent increase).
3. Increasing personal training revenues (average more than 50 percent increase in one year, double or better in two years).

Thomas emphasizes the value of the consultant as "a sounding board, helping to keep the club from becoming isolated (after all, they can't call their competitor)." Training is important, too. "We compare regular sales and management training [to] working out - the more consistent you are, the better results you get," he says. He adds further, "What gets real expensive for club owners is the trial and error method of finding solutions. A consultant can help shorten the learning curve and save valuable dollars in the process. We always want to recommend things that have a track record of success."

Moving beyond crisis

Consultants are usually hired when a fitness center is already knee-deep in a crisis. Scudder says it is often the case that fitness centers turn to consultants for major new projects or crisis action: "Most clubs call on a consultant like a farmer calls on the fire department - when the barn is half burned down." A consultant is not just for a crisis. If you have a successful business, with some sharp consultancy advice, you may build greater success. "Smart clubs … are sensing the changing of the marketplace, and are calling on experienced consultants … to come in and help them make themselves relatively recessionproof, competition-proof and stronger at doing what they do," says Scudder. Proof in point, his primary client is a successful five-to-eight-facility regional operation that simply wants to get even better. Opportunities for fitness facilities to use consultants to build on existing success are being missed. "Take a recent comment by a club owner regarding consultants: 'I don't need anyone to tell me how to run my business; I know how to do this.' This is fairly typical of clubs that are missing opportunities," says Thomas. "The problem that clubs don't recognize is that it's easy to become isolated and stale, and they start to do what other clubs are doing," he says. "One of my favorite sayings is 'If you keep doing what you're already doing, you'll keep getting what you're already getting.' Nothing will ever stay the same - it either gets better or it gets worse. If you only received one great idea from a consultant, it could make all the difference," Thomas says. Perkins says that most fitness centers are on tight budgets, and tend to be reactionary. "If they worked with someone on a monthly basis, things would run a lot smoother," he says. Also, in working with a consultant on a regular basis over a longer period of time, you can then start to implement policies, strategies and plans. The earlier a consultant is brought on board, the sooner problems can be identified and dealt with. Perkins gives the following analogy: "They've got some raging fires going on in the Southwest. If you could put those fires out in the beginning, they might only burn a few hundred acres. But, if they burn for weeks, then you've got 10,000 acres on fire." If there is one key to gaining maximum benefit from a consultant, it is to get the relationship right. "In my experience," says Scudder, "the most important facet of successful consulting for client and consultant is the building of an honest, frank, forthright and solution-making relationship.