Business Advice

Fitness for business: 5 ways to make your business lean and your team keen

- December 1, 2021 4 MIN READ

When lockdowns around Australia forced fitness studios to close their doors, there was one thing I was grateful for: that we had a lean business model, which meant our overheads were low and we were well placed to ride out the forced closure, writes Matej Varhalik, CEO and cofounder, SpeedFit.

But what does it mean to run a lean business? The principle is straightforward: make sure your operations are optimised by running efficiently and effectively with as little contingency as possible. It’s not about reduction, it’s about maximising value.

Here are my 5 tips to run a lean business

1. Clarify your business requirements

A lot of business bloat comes from not knowing what your business really needs and therefore over-compensating with excess resources. For example, when we’re looking at our premises, we are very clear about how big our studios need to be and what they contain and we also always check the visibility. That way we’re not tempted to lease a bigger space that will not add value to our clients’ experiences and we can see how much revenue can be drawn from the visibility of the new studio location.

Over the past couple of years, many businesses have discovered they don’t need as much office space as they thought, because not only could most people work from home, many preferred it. Unfortunately, they are locked into long commercial leases, which increases their overheads. It is important to have clarity around what your clients actually need and are willing to pay for, for example when we first opened our studios we had two showers in each studio but we quickly realised that a lot of clients prefer to take shower at home so one is enough, which brings our investment down and meant we could reduce the space required. This brings me to…

2. Reduce overheads

Anywhere you can save on ongoing operating costs without compromising the quality of your products or services, do it.

One of the first avenues to consider is staffing. Ask yourself what roles are essential to the business and what can be outsourced? Your decision should focus on your business requirements and the value of that team member. In our case, the relationship between trainer and client is a core value of our business, so our trainers are essential, but we can outsource a cleaner.

Another way in which we’re lucky is scale: because we are a franchise we have many operations at head office that we can use to support franchisees, such as marketing, so they don’t need a dedicated employee for that department. Consider how you might be able to use an economy of scale to reduce overheads – perhaps team up with another business to share resources or outsource assistants overseas who can work on specific tasks.

3. Minimise resources

A lot of businesses forget to focus on waste reduction. In a product-oriented business, it’s obvious what waste is: excess of something that has little or no value. In a service business, it can be resources like time.

For us, when there are no clients in the studio, our trainers are doing everything from washing towels to answering emails and other admin. We have also developed a rostering system that allows us to increase the density of appointments so our wages to sales ratio is quite low compared to similar businesses.

Reducing resources means you are effectively using the resources you have and you have a better understanding of what you need. Another thing to look at is the cost of acquisition versus the cost of retention. Many businesses focus on acquisition and burn a lot of money to acquire new clients but they don’t have the strategy or budget to keep them. It is cheaper to retain clients rather than always chase new ones.

4. Create systems

If you can automate or systemise any activity or task without negatively affecting outputs or outcomes, do it. Systems contribute to consistent results, waste reduction and, over time, speeds up the whole process. Even better if you have the technology to do it.

A great example is our automated reminder for sessions. Clients get an email and/or an alert on our app to remind them they’re booked in for a session, which also has information on how to change the session if they need to. It reduces no-shows and helps the trainers better manage the studio schedule. We have also task reminders and detailed weekly plans for our staff so they know what, when and how something needs to be done

5. Don’t be afraid of change

One of the biggest advantages of having a lean business model is the ability to quickly pivot and adjust to changing circumstances. The best way to build this into your business is to anticipate change and be ready for it. On a practical level, that means constantly evaluating what you do and, importantly, why you do it.

I started this advice with business requirements, which can definitely change. When they change, you should also reassess your resources required, overheads, wastage, systems and all the other elements that rely on a business requirement to justify their existence.

Importantly, embracing change inspires innovation. Being able to look at a system and say, ‘why don’t we try it this way?’ to improve it is a key part of the lean business model.

For example, during recent lockdowns, we launched SpeedFit Alfresco’ and ‘At home with SpeedFit’ so clients were still able to access sessions either outdoors or at home.

A successful lean business is cost-effective while remaining value-driven. It knows itself, is confident in the resources it needs to fulfil its vision and is prepared to change. It’s about using resources strategically, not cutting them back, this way you maximise value while remaining smart and agile.

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