Why Receiving Lump Sums is Bad
Did you know that it’s a bad idea for gyms and fitness clubs to receive lump sum revenue?
Justin Tamsett, Chief Comfort Zone Challenger at Active Management states that, “By definition, an addict is someone who is abnormally tolerant to and dependent on something that is psychologically or physically habit-forming. It may even be an abnormally high craving. For many health club owners and personal trainers they become addicted to collecting cash in large lump sums!”
Pre-paid memberships and multi-pack PT sessions are cocaine for a fitness business. You get a massive high as you watch the cash come in. And you become addicted to this cash, as your spending more often than not reflects the amount of cash you have. So to top up the bank account, you run another offer to gain even more lump sums of cash. The more you get, the more you spend, the more you need more! Sounds pretty much like a really addictive drug.
Lump Sums Are Bad, Regular Cash Flow is Good
For long term sustainability in business, we need cash flow and not cash injections in the form of lump sums of cash. Grow your weekly, fortnightly or monthly direct debits with a strategic plan and you will not require injections. Remain disciplined and focused by setting daily, weekly and monthly targets to hit in regard to debit growth.
If you want to improve any number in business (in this example, we are talking direct debits), you need to know what that number currently is and what you want to get it to. Then for every decision you make in business, ask yourself, “Will they help or hinder me changing my debit number?”
If it is the latter, re-think the business decision. And of course, when you do shift the number positively, celebrate your success, as we do with all goal setting.