The 'Issue' Is Finance

The 'solution' is to focus not only on your business plan, but also on the safety and security issues that could affect the long-term financial picture of your facility.

When looking at the financial aspect of fitness businesses, it seems logical for owners and operators to focus solely on the business plan, including such things as revenue and expense projections, return on investment, previous performance, competitive and economic climate changes, and growth. But, financial success isn't all about the "plan." There are other factors that are often overlooked because they seem minor in the overall financial picture. At the top of this list of other factors is safety and security.

Protecting members' privacy

You'll probably recall the story last year about the suit filed against Life Time Fitness in northern Texas when it was discovered that its employees had dumped more than 100 records of their members' personal information in the trash (see our blog entry about this titled Dangerous Trash at 2007/08/dangerous-trash.html). This was on the heels of several reports of government employees' personal records being stolen in separate incidents - all at a time when identity theft is running rampant. In the case of Life Time Fitness, the problem stems from a few areas: 1) the way in which members' personal information is stored, 2) which staff members are allowed access to that information and 3) how those staff members handled that information.

Not all of your employees should be allowed access to sensitive information. And, those who are allowed access should be provided indepth training about the safe handling of that information. This includes guidelines about keeping personal data stored properly and storage areas locked, not leaving sensitive data on computer screens and password protecting computers, as well as ensuring that data is not kept indefinitely.

With today's advanced technology, there really is no reason why the old method of paper files should be used. In this issue, you will find an article titled Secure Billing, which discusses how today's software can restrict access to only those employees who need it.

Protecting your bottom line

You can do everything possible to help ensure your members don't get injured by implementing safety guidelines, such as instructing members on the proper use of equipment and facilities, making sure staff members are qualified and well-trained, keeping equipment and facilities clean and safe to use, providing adequate security in and around the fitness center, and fixing problems as soon as you're aware of them. Policies and procedures in the event of an incident should be in place as well, such as emergency action plans, roles and responsibilities, training and drills, documentation and how to communicate with outside agencies.

But, inevitably, there is going to be some incident that occurs in your fitness center. And, what's going to mean the most to your bottom line at this point will be the waiver you have on hand for that injured member. Over the years, we have published numerous articles on what constitutes an effective waiver. And, as we know, this can vary depending on the state in which your facility is located, whether we're talking about adults versus children and a host of other factors. But, in this issue, we provide a comprehensive checklist for evaluating your liability waiver. Use this checklist to score how well your waiver will hold up in a court of law.

Surviving the fitness business

Only 44 percent of businesses survive past four years. The main reason is a lack of financial planning. But, financial success isn't just about budgeting (see the article on obtaining financing for purchasing used equipment, also in this special section), return on investment, EBITDA and growth; it's also about avoiding financial pitfalls from other factors, such as those that arise from lack of safety and security.
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