Quick Wins for Your Gym’s Bottom Line

“If I could just make 10% more…”

We hear this from gym owners all the time. Many think more leads and revenue are the solution to their problems.

But here’s the truth: focusing only on revenue won’t cut it. You could hit $1 million in sales and spend $999,999 to get there, leaving you with next to nothing.

So, what should you really be focusing on when it comes to growing your business? Setting a net profit goal and understanding your spending. That’s what separates successful gyms from struggling ones.

Let’s dive into net profit and how a few small wins can ease some of your stress every month and get you on the right track to financial stability.

Getting Past Breakeven

First, we acknowledge and often proclaim that gyms and fitness businesses require a base level of revenues to support operations for profitability to be a possibility. For example, if your fixed costs are $30,000/month, then revenues must be higher than this as there are no great ways to cut fixed costs below $30,000. Fixed expenses like rent or utilities are necessary for the operations of your business and are usually not negotiable.

But once your facility is beyond its breakeven threshold, that’s where dialing in profits becomes essential. Otherwise, it’s just more money in and more money out with little left over for your hard work.

Create a Net Profit Goal

Start by assessing where your net profit sits today:

Less than 5% or negative? You’re on life support.
Between 5-10%? You’re barely above water.
Between 10-15% or more? You’re doing well. This is when you should think about reinvesting a portion of your pre-tax profits to keep your growth on track.

Net profit is what’s left after all your expenses are paid. It’s not just about covering costs; it’s about having enough left over to support you and your family.

Even a small 1-2% increase in net profit can bring more stability and peace of mind.

Why Net Profit > Revenue

We’re not in the fitness business just for the love of it (though that’s a big part). At the end of the day, your gym has to put money in your pocket. Revenue is important, but without healthy net profit margins, revenue is just a number. It’s what’s left over that counts.

The good news is you don’t need to make drastic changes to see a difference.

Here are a few practical strategies to help you start making small, impactful adjustments:

Step 1: Take a Hard Look at Your Expenses

Every fitness business has expenses—rent, payroll, equipment—but not all are as essential as you may think.

So here’s a powerful exercise: let’s review your spending and decide what can stay, what needs a pause, and what can go.

Print Out Your Last Month’s Statements: Grab your* bank and credit card statements and get a highlighter ready. Go through each item, and cross out anything that doesn’t directly add value to your business. Ask yourself, “Does this expense help my business grow?”

*Yes, we mean you! Don’t just skim over this exercise, put it into action.

Trim the Fat: Now, eliminate any non-essential expenses—and be honest with yourself. List everything you spend money on and highlight anything that isn’t bringing a return. You’ll quickly see what’s eating into your profits and how these small costs can add up.

By focusing on essential expenses only, you’ll likely start seeing small wins right away.

Step 2: Set a Realistic Profit Goal for the First 30 Days

Big changes take time, so let’s set a realistic profit increase target for the next 30 days. Aim to grow your net profit by just 3-6%.

It might seem small, but these gradual improvements add up and lay the foundation for long-term gains.

Step 3: Get Familiar with Spending Benchmarks

Having spending guidelines helps make sure you’re not overshooting your budget on things like rent or payroll.

Let’s look at some target percentages that’ll help you keep more of your hard-earned revenue:

• Rent: A good rule of thumb is to keep your rent at or below 25-30% of your total revenue. As your business grows and revenue increases, the goal is to drop this percentage so more money is available for other needs. Now, of course rent is dictated by the terms of your lease and can only be negotiated when signing or resigning a lease for a new period.

• Payroll: Payroll costs, including your own pay, should ideally sit around 25-30% of total revenue. It’s okay if this reaches 40% in specific cases such as when you’re just starting out and growing or even when you are already profitable, but here are a few things to keep in mind:

• Admin Costs: How much are you spending on non-training roles like front desk staff?

• Trainer Pay: Are your trainer wages aligned with the market and the value they bring in?

• Owner’s Pay: Be honest with yourself here—are you paying yourself within reason?

The better you can control these expenses, the more room you’ll have to grow.

Step 4: Make Smart Decisions About Assets

In the fitness space, it’s easy to get caught up in the latest and greatest gear.

But every new purchase should be treated as an investment, meaning it needs to put money back into your business. A client we met with recently loves to buy new equipment each year for his two gyms, but after looking at this year’s results, we made the decision together to put off new equipment until some debt is paid down first.

Think of assets as revenue generators.

Whether it’s a new treadmill or a software subscription, ask yourself: “How will this purchase help me make money?”

Avoid falling into the trap of buying things that look good but don’t actually improve your bottom line.

Action Steps: Easy Ways to Start Cutting Costs and Boosting Profit

If you’re ready to start seeing some real changes, here is a summary of those simple, actionable steps we discussed above:

Highlight Necessities: Start with last month’s expenses. Identify anything that isn’t absolutely essential and consider if it’s something you could pause or cut.
Set a Profit Goal: Aim for a 3-6% net profit increase in the next 30 days—think of this as your jumpstart phase.
Monitor Key Areas: Keep a close eye on spending categories like recurring subscriptions, payroll and new equipment purchases. These can have the biggest impact on your overall profitability.

Avoid the “More Leads and Revenue” Trap

Last but not least, don’t fall into the trap of only focusing on revenue. While cutting expenses is “less sexy” than making more sales, it actually can make a bigger difference to your bottom line. Set a net profit goal and assess your spending to get the most out of every dollar.

By focusing on manageable, small wins, you’re setting yourself up for success in the long run. Each of these steps will help you build a leaner, more profitable business that doesn’t rely on constant revenue growth to stay afloat.

And what’s more sexy than that?

If you could use extra help cutting fat in your fitness business or need overall financial guidance, we’re always here to help.

Head to our Get In Touch page to schedule your first introductory call.

In the meantime, check out our recent blog post on Understanding the Balance Sheet for Gyms —we think you’ll find it useful!

Until next time!

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Eric Killian

CPA & Founder | Accountant, husband, father, mountaineer.
Fitness is such a big part of who I am. Maintaining a healthy lifestyle, eating well (mostly paleo), hiking, backpacking, mountaineering, practicing yoga and Crossfit are all important cornerstones of life. But I love ice cream and cookies too much to say no!
I love helping owners make sense of their business and finding ways to grow it. It’s an honor to help you see situations, scenarios and opportunities from all sides so you can make informed decisions.

Business Ownership, Profitability

10% More Profit: Quick Wins for Your Gym’s Bottom Line