Every business comes with its pros and cons. Some have higher turnover rates than others, some close their doors early, and some persevere through all the muck and the mud.
The latter use a system called risk assessment, and it’s an integral part of any (and every) successful business model that exists in modern society. The enthusiasm and desire to begin a CrossFit gym is great, but it’s not enough on its own to get the job done.
Instead, you have to approach practically while also adhering to your core values and lifting up your staff, clients, and business. This is what a risk assessment is, and why you need to perform one ASAP.
What is a Risk Assessment?
Risk assessment is when you put your entire business on the chopping block and pull apart all the fibers.
You’re investigating more than just your business model; you’re investigating micro details, like how many people open your gym in the morning, how often trainers get sick, and the number of canceled classes that could have been avoided.
With risk assessment, you take a look at every single layer of your business and determine what’s solid, and what’s at risk. No business will operate perfectly, but paying customers have the expectation that their wants and desires will hold true from the time they signed up for your gym.
Too many incidents and you’ll endanger your profits create a bad reputation, and overall things will just go downhill very fast.
Why is Risk Assessment Important?
Risk assessments protect three core aspects of any business. Without assessing risks, you have no way of knowing whether or not your business could be impacted by these.
- Brand Name: Your brand name is the image of your business. A brand is identified very specifically, and building a brand takes a lot of meticulous work. Building a brand name takes years and dedication. While it’s easier to build a local brand in a relatively short amount of time, optimizing that brand is the difficult part.With local brands, news travels fast and it can kill your business. That’s why operations are so important in a local non-commercial gym.
- Word of Mouth Reputation: This will impact everything. You’re likely opening up a single gym right now or you already have. Word of mouth is ridiculously effective, because people want to hear opinions and reviews from people they trust. They inherently trust those opinions. While we can’t appeal to everyone, level-headed individuals with valid complaints can be extremely effective, intentionally or not, at putting a real wrench in the gears for your business.
- Profits: The point of a business is to drive profits, but what if a lack of a risk assessment was enough to completely undo it all? When risks rise and aren’t dealt with, it can slowly cut into your profit margin. You won’t notice it immediately (you could chock it up to a bad month or week), but then you realize there’s a reason for it, and by now the difficulty has been raised. Now it’s harder to meet this risk and combat it properly. The last thing we want is for a risk to affect our bottom line. This is typically when gym owners and business owners in general panic as a response; let’s completely avoid this possibility.
Four Key Goals of Risk Assessment
Before we get into how you can perform your own risk assessment, it’s important to understand the goals you’re striving for, and why they matter.
Risk assessment is something that everyone thinks they know, but after reviewing these key goals, we believe that you’ll find some new information on the topic.
- Reduce Injuries, Bad Management, and Negligent Acts: Your management team are leaders, not just people who dish out paychecks and check if employees are on time. They should be leading with examples, doing their best to promote core values, and overall make the entire gym feel hospitable and welcoming. Visitors can tell when staff aren’t treated well, and nobody likes that. If management suffers, everything below that hierarchy suffers: the staff, the trainers, and the visitors/members. This isn’t a role for that cousin of yours who really needs a job, or your high school friend that you would personally vouch for. You need to be strict with core values and your profit margins when you choose a good management team.
- Reduce Financial Liability and Instability: Risk assessment isn’t just about the next gym down the block stealing your customers. It’s about what you’re already doing that could lose your current memberships. You need to assess your insurance and what it covers, how much of an impact one canceled monthly membership would be on your bottom line, and whether or not your current model can sustain growth in the long term. If you have a full gym but you’re not making enough to profit (and pay yourself), it may be time to raise rates. If you’re not making enough but your classes are full, book another class. Make sure you aren’t in financial liability.
- Protect Business Resources and Financing: Protecting your business resources means understanding where they are spent, how they are being spent, and where the biggest drain is (or will be). If you know for a fact that one area of your business, while deemed useful, costs more money than any other working part, it’s a business risk. What if money continues to sink into it with no ulterior payoffs? If a program to get sign-ups isn’t hitting the numbers you want, but the indirect response is that your brand awareness is on point, is it worth getting rid of? This is where things get tricky and you have to connect the dots within your business, but if done properly, it can help you understand the risks and attend to them as needed.
- Preserve Brand, Image, and Reputation: We talk about how a customer can use word of mouth to damage your business, but what about your employees? Workplace incidents, especially in this day and age, lead to explosive social media campaigns against businesses, and it’s killed more than a few in the process. Preserving your brand means keeping the risks of ruining your reputation to an all-time low. Incidents happen, and if dealt with properly, they can blow over, but you want to make sure staff are being treated well, customers know they are valued, and your trainers are being paid fairly. Avoid any incident that can ruin your brand or image.
How to do Risk Assessment
Here’s the meat and potatoes of this post: actually applying a risk assessment strategy to your business.
Risks are important to improve your business, but you want to make sure you’re taking the right ones. Here’s how to go from A to Z and assess every possible risk along the way.
Identify Work Hazards
Work hazards aren’t like a SWOT analysis. You can measure internally and externally, and if your business is well put-together, those external factors still count. Work hazards could include:
- Disruption due to natural disasters such as flooding, blizzards, hurricanes, extreme weather, and dangerous/icy roads; these are basically environmental and you can’t avoid them
- Disease-related concerns, such as the COVID-19 pandemic or local illnesses; anything biological that is out of your immediate control
- Injuries or accidents in the workplace, including during or before transportation that would prevent someone from coming to work, structural integrity issues with the building (more common with a rented building), dangerous equipment malfunctions, and so on
- Completely intentional acts such as strikes, local demonstrations, and your risk for being robbed
- Loss of power, loss of internet, or loss of immediate management system activity (you really do need to go with a reliable management software)
- Mental health concerns among staff, understaffing, micromanaging
- Supply chain issues such as interruption or a complete breakdown
Work hazards are the first step because it helps you see the entire scope, and then narrow it down to those with the highest probability of encountering issues.
Do you pay more than other gyms in the area? Good, you’re unlikely to see a labor shortage or strike. Do you offer mental health days or therapy in your work packages? That’s also good, you can avoid mental breakdowns on the clock.
Be brutally honest with yourself during this assessment. Act like someone who is being paid a lot of money to find every minor and unseeming flaw.
Define Who is Potentially Harmed
If a risk has been found, who is it going to affect?
This is how you narrow it down further to identify who will be harmed and how you can help them. Will your employees be harmed, or can your gym members be harmed?
Furthermore, can your entire brand be harmed? These risks you run into don’t simply affect individual workers or individual members. They can affect your business for the long-term.
This might not be as apparent at the beginning as you think. Once you have your list of hazards, you can still think outside of the box for this section. If the hazards and risks to your staff are minimal, that’s excellent, but it doesn’t mean that another issue isn’t lurking in the darkness.
Evaluate Risks and Precautions
Now that you know what risks are there and who is most likely to be affected, what are you going to do about it? How do you evaluate which risk is the most prominent, and which risk is the easiest to mediate or resolve?
Well initially, you don’t. You have to go through the necessary amount of time to fix each risk, and how you can give proper precautions in the meantime. Make sure you address any safety hazards publically with your employees and trainers. Make threats known to the right people so they can also protect themselves.
Record, Document, and Implement Your Findings
You’re close to having a full plan in place. Now it’s time to record everything in your risk assessment to make sure it’s recorded in the event that an injury or future legal claim comes from your findings.
This way you can document what you’re going to do about it, when something is done about it, and what the end result was.
You found a response or solution, so now it’s time to implement it. Find out how you’re going to do it, how much it’s going to cost, and what the time frame is. Again, and it cannot be overstated: you have to record everything for current and future use.
It helps if there’s any liability against you, because legal proceedings will take documentation, disclosure, and timely solutions into account. Be sure to include photographs as well.
Review Assessment Often, Update Regularly
Double-check to make sure those same risks aren’t cropping up again and again. While you make sure those aren’t making a comeback, be sure to run through a risk assessment check as often as possible.
It may not look like it now, but you’ll run into more risks as your business expands and operations continue. Even if you just stay on the same path you’re on now, things will pop up.
It’s best to regularly (at least quarterly) inspect your entire business, and adjust it accordingly.
Assess Everything, Avoid the Risk
If you understand your risk at all times, you can enter new deals and approach new angles with little to no worry.
When you stand to know what the risk is, the anxiety of that risk falls off your shoulders. Nothing is worse than stabbing around in the dark and hoping that you find a strategy that works. Risk assessment does work; apply it today.
For all other aspects of running your CrossFit affiliate gym, PushPress has the answers you need. From financing your business to legal entities and more, we know what it takes, and how to run one as efficiently as possible. It’s time to up your game.