Tip #4: Do you close or do you fight it out?
May 16, 2020
Originally published March 19, 2020
Do you close or do you fight it out?
Tough call, and there are arguments for both sides, but this argument is being taken away from you with a few more state closings daily.
As it is tracking across the states now, and as of today over thirty states have forced closings or have severe restrictions, you will be forced to close at some point soon before this subsides, and you need to be prepared for this. There will be exceptions in certain states, but for most of us it will be a forced closing for an undetermined amount of time.
If you are open and plan to stay that way, there is one side that claims it is morally irresponsible to stay open raising the possibility you could be part of spreading the disease. Close the gym, take you and your team out of the fight, and wait until someone gives you the word to reopen. Why risk your staff to infection or worse, risk infecting the clients, which often are in the target group most affected by the disease?
Many gyms are closing voluntarily, committing to a two-week self-imposed shutdown to develop better “optics” in the community and to take a breather to just withdraw from the madness. I do like this option and think it is viable and will not damage your gym over the long-term.
The other side talks about staying open, fighting it out and being a rock in the sea of madness that is sweeping the country, and most of the world too. We stay open, clean the gym to the highest standard, and be there for the members as a safe haven and as a resource to stay healthy against the virus. I personally support this option, but this choice is now no longer relevant since we are all heading toward some type of closing in the immediate future.
These are the gym owners with no choice. Local governments dictate to close and close you must. The difference here is that some are closed for two weeks, while others receive the notice to close indefinitely, which for many financially struggling gyms, is a death sentence.
Both sides of the argument are correct and my first three letters in this series covers both sides. Here is what I believe is a compromise position you might consider if you have not yet been forced to close:
- Voluntarily close for two weeks. As of today, would it help you to close two weeks, get a chance to reset your mind and get out of the stress of this situation and reopen around April 6th? Make the actual decision to reopen on the 3rd. If you anticipate not being able to open, let the clients know that Friday, but plan the 6th and work from there. If you are hindered again from local government, then reset and plan another two weeks out. Tell the clients the, “anticipated opening date,” leaving you an option if you must reset yet again.
- If you do close, deep clean the gym, paint, and get things done you would never do when you are open. Concentrate on the clean of a lifetime, documented on social media by the way, and give the bathrooms and locker rooms a redo. This is also a good chance to declutter your gym. Members associate clutter with not being clean. If you haven’t touched it for three months, then toss it in the dumpster.
- Designate vital staff as management and consider paying them for a full month if you are forced to close longer than two weeks. Good staff is hard to find, and if you look at the cost of training them up to this point and the true cost of replacing them, pay them for a month guaranteed so they can breathe. My staff stands by me and I will stand by them.
- Help the other staff as best you can. The social net will take several weeks, or longer, to kick in, meaning unemployment might take weeks for the average person to collect. If you are forced to close, and if you can manage it financially, pay your staff for up to thirty days and then make a decision after that as needed.
- Do online coaching from the gym or your house using simple tools, such as FaceTime, Skype or Instagram Live. Yes, you can charge for this and yes, you can do nutritional counseling by the hour too for a fee.
- I mentioned this in previous letters, but go to your landlord and banks now to seek relive before it gets worse. Ask the bank for three months of mortgage or loan relief and ask the landlord for three months of forgiveness amortized over the remainder of your lease.
- I also mentioned calling every client and letting them know what is going on at the gym. We have been doing this in three different countries and these calls are getting strong results. Plan on doing this once a week until you are open.
- Many of my clients are loaning equipment to the clients on a check-out basis. Make sure the member signs for it, put a value on it, and let the member know that if the stuff isn’t returned, they will be charged.
- You folks shut now without a firm opening date can get these packages immediately delivered from Perform Better if needed. I personally recommend med balls (old school but cheap) mini-bands and a jump rope, but each coach has their own style and I will leave this up to you. You could sell these kits and make a little money too.
- Stay active on social media with tips, nutritional advice, immune system preparation and anything a scared person hiding at home can do. Limit the direct marketing somewhat, but do advertise for trial and six-week programs and let everyone know these can be started online.
- There will be bailout loans coming soon in some form, but if this affects gyms will be determined on a state by state basis. These will come from states, local government, the SBA, and maybe federal programs yet to be announced. I mentioned in a previous letter that you should be ready to apply for these immediately by having current financial data, records of leases, bank notes, mortgages and rent, and have the ability to demonstrate what you lost and why. Start now preparing this documentation so you can file early when these loans appear.
Finally, plan for being closed for a few weeks, but prepare to be closed at least two full months. Many governments are using the term “indefinite” when it announces closings, which scares the owners and the clients equally.
You should have two months of reserve to ride this out. If you do not have this, start now to borrow it from the bank or a client. Hope for good but prepare for nasty. Sit with a good financial person and determine what you will actually need to borrow to survive a full two months closed if that happens. Do not deny this might happen; simply be prepared if it does and laugh much later if this passes over quickly.
Do the right thing now and the good comes later. Be there for your clients in a time of need and they will remember you when things return to a normal state of life. Leadership counts and you supporting your clients when you are is closed is a statement of good business and also a caring owner who will fight along aside his people.