Part 3: Your Numbers
You need to know the numbers when opening a Crossfit box. This is the part that most people hate the most yet it’s one of the most important.
There are two main things you need to know:
- Marketing ROI
Where is all the money in your business going? This especially important when opening a Crossfit box because you may not have much revenue yet. You should know what your operating costs costs are as well as overhead and how much you have to spend on marketing. Not knowing the numbers can kill your business. I’ve worked with many small business people who had no idea about where the money was going. But you’re not going to make that mistake.
You need to know your fixed, variable and discretionary costs.
- Fixed costs: payroll, services, rent, leases, insurance, loans, etc.
- Variable costs: Inventory, hourly workers, materials,
- Discretionary costs: Advertising and marketing, equipment maintenance, testing and doing research.
By knowing where the money is going, you will be able to cut costs and manage it more effectively.
There’s a lot more to this so it might be worth it to pick up a basic finance book to understand the numbers better. Think of cash flow like blood in the body. If it’s not flowing right, you could die.
You need to measure your marketing…period. If you don’t know where you’re getting most of your new members then you will be blindly marketing to people. Foremost, you want to measure your basic return-on-investment (ROI). If you spent $1,000 on advertising, overhead and operations and got $2,000 worth of business, then you’re making $1,000. If you’re doing online marketing you should know things like your unique visitors, visits, click-through-rate and your conversion rate. Once you find out what’s making money, you can cut the fat and focus on what’s working. I can’t stress to you enough how important it is to measure your marketing when opening a Crossfit box.
The numbers might seem scary, but they’re not. Anyone with basic math skills can do it. There’s also tons of tools on the internet and software services you could find to make sense of everything.
Find out more about opening a Crossfit box