FINAL Flashcards
Benchmarks:
specific standards business strives to achieve
Assets:
anything a company owns that has monetary value
assets =
liabilities + owner’s equity
Liabilities:
financial obligations/credits owned by the business
Owner’s equity:
the owner’s investment in the business plus any profits or minus any losses
Balance sheet:
indicates the financial status of a business at any given time and is separated into: assets, liabilities, and owner’s equity.
Capital:
Money, goods, equipment to produce other goods/services
Typically one time or large scale purchases
What does an income statement tell you?
Financial results of business operations for specific time (month, quarter, or year).
Compare to forecasted
Summary of transactions that produced revenue & operating expenses & taxes incurred in generating revenue. Shows how well club is operating
Provides info on actual vs. planned performance
Make any decisions to change strategies
All revenue reported on income statement
managing income
How will you make $?
*New Sales, Retention, Efficient use of space, programming
*Accounts Receivable:
$ owed to a business
Policy for collecting delinquent accounts
EFT or no? Automatic, fast, easy for member
Long time to correct errors, negative perception,
Managing Expenses *‘Cutting costs is more
tangible & predictable than estimating member sales’
Control expenses *question every expense as though it were coming out of
your own pocket . Bid on everything Negotiate costs Do it yourself Contract out Trade/barter Use space efficiently Accounting practices (security etc.)
Why budget?
Plan for future success
Provides direction, motivation to meet goals, resources to evaluate progress
Conservative sales estimates & liberal in your expense estimations
budget is based on what kind of year
fiscal year
Types of Budgets
- Increment-decrement or trend-line budgeting: based off previous year, assume follow trend
- Break-even
- Zero-based
Trend Line Budget is what?
*Most popular
Use exact # from previous year, and +/-, follow trends
Pro’s of trend line budgeting
Using established, realistic numbers
Con’s of trend line budgeting
Can be misleading if numbers are off
Must keep good records WITH COMMENTARY
Justify amounts you are spending
Break Even budget
Minimum amount to cover your costs
*Zero Based Budget
Look at all areas in depth
Based on specific goals for year
Challenging to accurately predict numbers for the year
May have to justify everything you spend
Typically new construction, large scale changes
Preparing a budget: 4 steps
- Determine budget expectations…ask questions
- Forecasting revenues
- Forecasting expenses
- Projecting profits and losses
**Comparing with industry norms
Revenue
income from normal business ops
Expenses
costs
What are profit centers?
Eliminate unnecessary expenses. Examine every cost center and determine it expendability. Fill empty spaces or cost center with profit centers such as making an office or storage closet into a massage room.
Profit centers add
*Add value to attract memberships *“the more they pay, the longer they stay”
Profit centers correlation
Correlation between high non-dues revenue and high retention rates
Profit centers median is
Median is 32.9% of total revenue
Strong PT business correlates to improved retention because
people who participate in PT remain members LONGER.
What are the five P’s of marketing? What is there relationship like?
Product, Place, Price, Promotion, and Person, and they all depend on each other (interdependent)
People
- Demographic analysis
- Living w/in 1-5 mile radius (for local club/clients)
- ACSM trends report/ IHRSA reports/ census data
- 75% Americans active, focus on them as clients, not inactive
Product
Tangible or intangible Examples: what are you selling? Top reasons for joining: Improving health/fitness Improving appearance
Place
Where purchased/delivered
In home, online, facility/clinic
Are you trying to get clients in the door or on your website
Creating environment
Price
What things contribute to cost?
Client perception of cost
Market value
Region, location, ppl
Cost of delivery:
costs incurred in creating a product, most vital factor in pricing
Profit margin:
price minus cost of devlivery
Promotion 8 strategies:
(not limited to…)
- Advertising
- Referrals
- Direct mail/email
- Internet
- Business to business
- Sponsorship
- Personal sales
- Public relations
Parthenon effect
promo
Categories all interdependent (promo)
Fewer pillars, roof will collapse
For parthenon effect to be effective, what needs to happen?
At least 3 pillars, greater stability if one fails**
TOMA
Top of Mind Awareness
TOMA is defined as
high level of consumer awareness within community is ultimate goal
What are the 5 pillars of promotion?
- Internal
- External
- Guerilla
- Community Outreach
- Corporate Outreach
*INTERNAL Pillar
- Activities and promotions within the facility
2. Conducted on smaller scale
2.*EXTERNAL
- Activities/promotions outside facility
- Goal: attract leads from demographic and geographical area to inquire via phone, email, in person
- *Person who has been to your facility is 300% more likely to join
Internal Marketing
Flyers/signs/high traffic areas Digital signage Bulletin boards Walking billboards Announcements in music system/ group ex classes Staff contests Referrals: POS & existing member Electronic: social, push notifications, email, website, QR Missed guest or alumni mailings
EXTERNAL
Marketing done outside facility/nonmembers
Advertising
Print media, radio, billboard, newspaper
Build brand recognition
Consider costs, will affect profit
TOMA
EXTERNAL Marketing examples
Direct mail
Ex. www.getmembers.com
Direct e-mail
GUERRILLA MARKETING
performed by club staff at the grassroots level.
can be the most powerful and least expensive =more personal level.
The key is organization and consistency.
Guerrilla Marketing examples
Business to business Lead boxes: reciprocation Take-one displays Rx pads for doctors Special passes Give client name directly to club Joint marketing Employee business cards
COMMUNITY OUTREACH
Community-building activities
Long term strategy
Creating image, recognition in community
Host events in facility
Sponsorship, donations/gift cert, events Host events in facility Press releases Speaking opportunities Wellness fairs
Strategic Planning:
process of diagnosing the organization’s external and internal environment, and includes deciding on a vision and mission, developing overall goals, creating and selecting general strategies to be pursued, and allocating resources to achieve the organization’s goals. Defining organizations strategy, direction, concerning key issues.
Parts of strategic planning
Short & long term goals for organization
Steps to be undertaken to achieve each goal
Timeline for reaching each goal
*Allocation and prioritization of time, energy, resources to each goal. Typically 5 year plan.
SWOT analysis
SW = strengths and weaknesses, can control these OT= Oportunities and threats; cannot control these
