Wednesday, June 24, 2020

Why does the gym always close? Take you to reveal the secrets of the fitness industry

What is most important in today's society? money? jobs? Wrong, owning a healthy body is the most important thing, so it is precisely because of this that the gyms are emerging one after another, but have you noticed that many gyms closed when they were open? There are often cases where the rights of gym members are defended because of:

First, the gym uses a prepaid model, which is to pre-store, that is, you are asked to get an annual card, how much discount you can give you, it is indeed a good deal. But although this model can bring cash flow in the next few years, its disadvantage is that its debt ratio is too high.

Second, the accounting method of the fitness industry is different from other industries, only looking at the cash flow and not the debt ratio, so this is a vicious circle.

3. If you move to the gym, you only need to absorb the new members to roll the cash flow. Once no new members are added, it will crash immediately. Eighty-four percent of the gyms will not survive for 12 months, although the reasons for the closure are different. However, in the final analysis, the cash flow is exhausted, so the gym closed after two or three years of operation, which is the norm in the industry.

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