We recently did a webinar with Nexo Insurance Services, an insurance company with decades of experience focused purely in the fitness industry. We discussed what fitness businesses can do to improve their business from both an insurance and accounting point of view.
Insurance & accounting… riveting, we know!
The webinar sparked a few interesting topics, some of which I want to dive deeper into today. We discussed topics such as understanding lease agreements, combatting a landlord’s high insurance requirements, and how to properly set your business up for opening.
And out of all of the various topics of discussion, one underlying theme kept showing up over and over again – the importance of routine checks and maintenance.
It’s true: the habit of doing small, routine checks minimizes the risk of a monumental, and financially detrimental, situation occurring in your business.
Low Cost and High Reward: Routine Checks & Maintenance
The concept may seem rudimentary. Take care of the small things on a day to day basis so they don’t accumulate to big, monstrous situations that become overwhelming or out of our control.
Similar to checking the oil in our car to keep your car running smoothly, or foam rolling to prevent muscle tightness and increase your range of motion for next week’s overhead squats.
As I approach 40, it’s clear how important just five foam rolling is. Since 2017 it’s the small change I’ve committed to in my life. Foam rolling is the type of low-cost “insurance policy” that pays dividends both at the gym and in the game of life before things spiral out of control.
Case and point: From 2014-2017, before I knew better, I had immense back pain that resulted in an eventual back surgery due to three herniated discs. The root cause? Tight calves, hamstrings, hip flexors, and an undeveloped TVA (transverse abdominis). Had I invested in routine foam rolling and core work, my doctor, physical therapist, and personal trainer are convinced I would not have had herniated discs at all.
Anyway, you get the point. Small, routine checks and maintenance are key to preventing larger catastrophes in business and… in life..
So, where in your fitness business should you focus on implementing small, routine checks?
The experts at Nexo had a great example that I hadn’t thought of yet, which is to routinely check your membership waivers to ensure all of your I’s are dotted and your T’s are crossed. It’s most important to make sure every member and athlete that comes into your fitness business has signed a waiver. You can have a local lawyer look over the content of the waiver for liability gaps.
It’s easier than you think for a staff member to miss one or two people signing up for class on a crowded day in the gym or outdated waivers that should be current. It’s important to have your employees routinely check that any members attending the gym have a signed waiver on file. If you find a few waivers missing in your routine check, it’s as simple as making contact with said person the next time they come in to say, “Hi Sally, great to see you. Real quick, can you sign here?”
In this instance, you’re saving the business a lot of headache down the road by routinely covering your bases up front. Because if you’re like one of the client’s Nexo told us about, it will be Sally that breaks her leg in group class next week, before she’s had a chance to sign.
Prevention Is Key
Another area where it’s important to conduct habitual checks and maintenance is on your fitness equipment.
From an insurance point of view, Matt and Eric from Nexo spoke about previous incidents they’ve seen of businesses not maintaining the bands in their Pilates class, or ignoring equipment that’s hanging for muscle ups, only to have it result in an injury.
As you can imagine, injury due to faulty equipment can lead to a costly insurance claim. Now hopefully you’ve got a good insurance company with the right coverages in place that will have your back. You’ve got one of those, right? But even the best insurance company will raise your annual rates in subsequent years due to the claim.
TIP: Put procedures in place for employees to check to make sure everyone’s safe when they’re training. Matt and Eric recommend a weekly safety check. This could be as simple as visually inspecting the exercise bands, cable machines and other equipment while it’s getting it’s regular wipe down during your cleaning process.
Additionally, making small, routine checks to your fitness equipment can improve the business in other ways as well.
Maintaining Your Equipment Isn’t Just Good For Your Members – It’s Good For You
Taking care of your equipment, by wiping, cleaning and conducting routine adjustments can go a long way in making your fitness equipment last longer and look newer.
At the risk of sounding like your accountant, maintaining equipment for a longer period of time in your studio is great for cash flow.
And at the risk of sounding like your mom, taking care of your things and preserving their ‘like new’ appearance can go a long way in making a good first impression with existing members and future prospects.
It’s hard to compete with newer, shinier competition in the area when your equipment starts to rust, squeak… or break.
Conducting routine checks on equipment and waivers are just a few of the ways you can prevent larger monstrosities from occurring in your business by putting a few quick preventative measures in place.
There are others – such as routine wage checks, which you can read more about in another blog post, and daily expense checking. We also encourage you to seek out an experienced accountant to help you fill in the gaps in procedures you’re currently missing within your fitness business.
If you’re anything like us, the last thing you want to deal with at any stage of your business is Sally’s uninsured broken leg. So, for monetary and ethical reasons – make sure you’re regularly taking care of the small things to prevent the unforeseen.
As always, here at The Fitness CPA, we always love to help. We encourage you to read through some of our other resources or ask us a more personalized question by contacting us here. If we can’t help, we’ll be glad to steer you in the direction of someone who can.
Have you seen us on Youtube?
- What is a Deemed Election and How Does it Affect Your Employee Retention Credit Refund? - August 15, 2023
- Paying Workers: Employees vs. Contractors for Gyms & Fitness Businesses? - March 28, 2023
- 3 Employee Retention Credit Tips You’d Pay a CPA For - March 6, 2023