Coaches Percentage of Pay vs. Revenue

By March 16, 2020September 25th, 2020Blog, Profit First

Ready to learn about Coaches Percentage of Pay vs. Revenue?

The important tip we are covering today is Key Performance indicators of Coaches Percentage of Pay in comparison to revenue.

 

What I mean by that is the percentage of team members expense to the revenue they bring in.

 

The idea being, we take your team member expense total, and divide that by your total revenue, to take a look at that percentage.

 

While analyzing financially fit gyms for my book Profit First for Microgyms there were some big numbers that I came up with from that analysis.

 

An important one is that you don’t want that team member expense to be more than 45% of your total revenue. The financially fit gyms I looked at where their net income was 20-30% of their revenue, they were able to get their team member expenses as low as 25%.

 

Now please don’t misunderstand me in this, I believe wholeheartedly in taking care of your people and being generous, there are many ways and systems to make sure your staff is getting paid fairly.

 

It is just important to note that gyms that were the most financially fit had their team member expenses under that 45% and most of them were closer to 25%. You will really want to be in that range to help you stay in business as long as possible.

 

If you are over that 45% range it is time to take a hard look at your gym, remember you are paying those coaches to teach classes and help members. If there are not enough classes or enough members to support the amount of coaches, then it is time to take action. This may mean increasing members, cutting the number of classes, or even minimizing the size of your gym. There is no “one size fits all” answer for this, so take some time to evaluate your gym to see what you need to do to get that team member expense down. 

 

If you need some advice on what to change or how to better evaluate your gym, I recommend checking out our video on Understanding Financial Statements. You are also always welcome to reach out to us, we are here to help you and your gym become more profitable!

 

Take a took at today’s tip video to learn more about finding your coaches percent expense.

Check out our other videos for information on the Profit First system and other great tax tips for microgym owner.

 

In my new book, Profit First For Microgyms, I break down Mike Michalowicz’s proven method, so that it is easily digestible by our Microgym owner community.

 

You can order your copy today by clicking here. 

 

Interested in more tips and advice on how to better manage the financial health of your microgym? 

 

I would LOVE to connect.

 

I share daily tips and advice not only for Microgym owners but for all of us being bullied by the IRS.

 

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