The practice of accounting is pretty much standardized, but when it comes to the important indicators for different kinds of businesses, there ought to be a difference, right? What might be an important consideration for one kind of business might be completely irrelevant for another. Keeping that in mind, here are some of the accounting information that might be important for a gym franchise:
Revenue Split by Memberships
Revenue is important for all businesses, right? However, for most businesses, revenue is a quantitative number which little to do with qualitative information. With gym franchises, on the other hand, revenue serves as a qualitative indicator as well. Why? Well, because gym franchises have a need to understand, exactly, how much of their revenue sources comprises of long-term customers. Such a revenue split is essential for the long-term planning of the gym, especially if there are plans of expansion in place. If a majority of the revenue sources comprises of short term sources, for example, then the business will need to think twice before setting any plans for expansion into action.
Most gym franchises are into the retail selling of bodybuilding products—such as muscle supplements—as well. For such gym franchises, the head of retail sales is of utmost importance. The reason is obvious, isn’t it? The retail selling is not the primary offering of a gym franchise, right? Therefore, they’d only be willing to pursue it if it adds to their profits, right? If the retail sales figures remain low for an extended period of time, then the gym franchise would have to consider the abandonment of the retail selling venture altogether. The business doesn’t depend upon it, right? Then what good is putting in that extra focus, effort, and resources in it if it fails to bring in profits?
Most gym franchises have got a number of packages for their customers to choose from. Some of these packages offer the services of a personal trainer and some don’t. If a majority of the customers opt for such packages that don’t offer the services of a personal trainer, then the franchise seriously needs to consider if it needs to offer the services of a personal trainer, in the first place, or would it be better off by not hiring a personal trainer at all. A cost benefit analysis can be used to effectively answer such questions.
Expenses Split by Departments
A gym franchise comprises of multiple departments, right? Some of these departments—such as the training department—are profit drivers while departments—such as bookkeeping—are cost drivers. Since the number of cost drivers exceed the number of profit drivers for most kinds of businesses, it’s essential for almost all businesses to keep tabs on their expenses in cost drivers. It’s essential, therefore, for a gym franchise to keep their expenses split by departments always under check, so that all unnecessary expenses may be cut down. This will provide the gym franchises a better control on their cost drivers.
If you’re the owner of a gym franchise who is looking for expert advice on how you can maximize the profitability of your business, through emphasis on the right accounting heads, then SKB Accounting has got you covered!