Over the years, your fitness business will constantly evolve. From the early stages of owning a gym until you’re a seasoned veteran, change is the only constant. And therefore, both high-level and micro analysis are imperative through the years.
Essentially, if something isn’t working but you’re not sure what it is, you can’t fix it. On the other hand, if all you know is that something is working you can’t capitalize on it.
This is where a SWOT analysis comes into play. It can be used to project, predict and protect your business. Plus, it can pinpoint where you stand to best increase gym revenue and retention.
What is a SWOT Analysis?
A SWOT analysis is a framework to evaluate a company’s strengths, weaknesses, opportunities and threats. It will give you an honest business assessment as you move through the years of owning a gym.
A SWOT analysis can help you with every stage of planning and operation. On one hand, you can identify the best parts of your business so that you can capitalize on them. On the other, you can strengthen or improve the weakest parts.
One of the benefits of a SWOT analysis - as opposed to other tools - is that it’s not industry specific. Simply put, the SWOT methodology is designed to be applicable for all businesses, including yours.
Here are the four parts of the analysis and how you can implement them for your gym:
Outlining the strengths of your business helps you to identify what you’re doing exceptionally well in owning a gym. This part of the analysis should be data-driven and not emotion-based.
For example, if you know a certain aspect of your gym - like group classes - is increasing gym revenue, you can dig deeper. How much money is it bringing in? Is class attendance consistently high? How would you evaluate your coaches?
If a specific program or initiative is working well, it’s a strength. And then it’s all about capitalizing on those strengths. This also means marketing them to establish a unique selling proposition for your gym.
Strengths are not always strictly tied to profits. It could be a new service that’s working well, but the weakness is in the marketing. If that’s the case, don’t change the service. Instead, you simply need to focus your attention on improving the marketing.
Weaknesses are the areas in owning a gym that could use some improvement. (Note that weaknesses and threats to your business are not the same thing.) Weaknesses are generally internal, such as systems, procedures or people.
Similar to strengths, weaknesses are not always tied to profits. For example, a weakness could be focusing on trying to grow too many areas all at once. On the other hand, sometimes we can get so wrapped up in one certain task that we neglect other areas.
Weaknesses could include anything from unused equipment taking up space to underutilized class times on the schedule.
Once you’ve created a list of your gym’s current weaknesses, take it a step further. Ask yourself if the things on the list have been caused by your efforts. Because they may have just developed naturally over time. This can help to expose a weak point in your business model.
Opportunities are where we begin to explore the external aspects of owning a gym. An opportunity is something within the external environment that grants possibilities for improved profits. Think of it like an upgrade to your business, and strategies for increasing conversion rates.
Sometimes, you’re only limited by your creativity when it comes to opportunities. Here are a few examples:
- Local Development: Will more people be spending time near your gym because of a new restaurant, mall or recreation center? These could create the perfect opportunity to tap into another market and increase revenue.
- Apartment Complexes: New apartment buildings are opening up, and that means dozens of families you can market to. Consider adjusting your “couples” and “family” membership options to provide them options.
- Population Changes: If your city happens to be expanding at a rapid rate, or you’re located in a college town, you have an opportunity to iterate your business. Consider the needs of your target buyer and market accordingly.
- Cost of Living Increase: If cost of living and median household income increase, it might mean it’s time for you to raise rates. you can raise rates. Even a five percent hike is instant profit for your gym.
One of our favorite opportunities to consider are local partnerships for your gym, where both groups can cross-promote. Start by considering the goals you’re looking to achieve, then seek out related partnerships that align with those goals.
Threats are the things that could harm your business, or be detrimental to owning a gym. It’s vital to anticipate threats, so as to avoid them damaging your brand, profits or reputation.
Threats can include things like your competition, shifts in the market or obstacles that could stand in the way of your gym’s success.
For example, let’s say your city launches a new construction project nearby, making it difficult to get to your parking lot. Being aware of the threat allows you to take proactive action. Perhaps it’s a gym member check-in challenge to keep your members coming, or a membership signup perk for new leads.
Most threats won’t be so linear. Therefore, you may have to gather your team or work with your mentor to brainstorm solutions. The most important thing is that you’ve taken the initiative and can create an effective plan.
Perform a SWOT Analysis for Your Gym.
Start by determining the objective of your analysis. If you’re new to owning a gym, your objective will likely be different than if you’ve been running a fitness business for years.
Next comes research. Understand your competitors, target market, gym buyer personas, etc. This way, you’ll have the correlating info for the four different sections of the SWOT analysis.
Start with your strengths, as the foundation. Write down what your business is doing well, what it continually improves upon and how you can scale if you choose to.
To counter listing strengths, next is weaknesses. You may want to ask for help from your team of coaches or anyone else who knows the business intimately. An outside perspective can often help here.
Now, write down the opportunities that your business has right now. Remember, your gym can solve a lot of problems for people. So where is it poised to do so? What can your fitness business do for the community that isn’t currently being done?
Finally, write down the threats to your business. This is where you identify what other businesses are doing, or maybe even doing better. Also pinpoint which threats might be caused by your weaknesses. This helps you plug up the leaks and fortify your business so that it doesn’t falter while you continue to build it.
Now that you’ve done your analysis, it’s important to establish priorities from everything you’ve learned. Begin with the top priority, the one that’s most imperative. Make a plan to tackle that item first. Then put the rest in order from next-highest priority to least.
In Summary: Owning a Gym Means Analyzing What it Needs.
From starting a gym to sustaining it profitably, your business will evolve over the years. Therefore, performing a SWOT analysis on a regular basis will help you grow and scale according to your goals.
The SWOT analysis will give you an overview of your strengths, weaknesses, opportunities and threats. Together, these components can be used to project, predict and protect your business. Plus, it can pinpoint where you stand to best increase gym revenue and retention.