Using Outsourcing as a Management Tool
National Fitness Trade JournalSpring 2007
Every business owner has their own unique areas of expertise. However very few small businesses have the knowledge, experience, or desire to excel in all aspects of running a business. When it comes to operating a fitness center, it’s near impossible to be proficient in all areas of marketing, sales, customer service, fitness training, equipment repair and maintenance, computers & software, accounting, billing and collections. The concept of "outsourcing" has been around for many years and it continues to be the best remedy for many small businesses. Outsourcing can be found in virtually any business or industry and the concept is simple. Most people, when looking to build a new house do not actually build it themselves. Instead they outsource the project to a general contractor and they in turn hire sub contractors to do the actual construction. The concept is very similar for managing health clubs. The business owner is able to secure the right tools, technology, and expertise that they otherwise would not have access to.
Many club owners may have a strong background or interest in a certain area, such as personal training, proper exercise, or fitness routines. However, this same person may not be very good at the tedious back-office administrative functions required to run a successful business. While others may have a good business background but lack the outgoing personality needed for selling memberships and marketing.
Even if you are good at multi tasking, you still need to make smart business decisions by putting your resources to work that will best serve your business. For most club owners and staff, their time is best spent on sales, marketing, and providing quality member services. One of the most critical areas to outsource is the back office billing and collection side of the business. This is not the fun or sexy part of the business. Most club owners are not well suited for these tasks. A good third-party service company should be able to better manage this aspect of your business at a lower cost than you can do it in-house. The outsourced service works as an extension of your club without the high cost of full-time employees. Administrative overhead is reduced while providing the most cost-effective receivable management available. Outsourcing allows you and your staff to focus on your core business…enrolling more members and providing good services.
Outsourcing to a third-party service company has many benefits and advantages. These Companies work on the basis of "economies of scale" and thus can do things faster, more efficiently, at the lowest overall cost. They also have the latest technology and expertise to get the job done right. Some "full-service" companies can provide the latest club management software programs and receivables management. These services include EFT bank drafts and credit card debits, manual billing, and a full collection effort for any delinquent accounts. Cash flow and monthly receivables are the life-blood of any heath club. In order to maximize your revenue, you need a billing system that allows you to collect the most money from the most members, at the lowest cost.
Look for the latest software technology as well, such as a web-based ASP model. An Internet based software platform gives club owners the most value for their software dollar. Make your own check list and look for things like remote access 24/7, unlimited training, toll-free tech support, unlimited users, and monthly upgrades and enhancements all for a low monthly fee. The old outdated desk-top programs typically charge you extra for all these services plus a large upfront fee for the purchase cost of software.
Service companies work on the same concept as health clubs; they are both in the "service business". Since they do not sell anything outright, their success depends on their long-term ability to service the club owner day in and day out, hopefully for the life of the business. Some are highly motivated to meet the needs of the club owner in order to maintain a long-term business relationship. This creates a positive win-win relationship between the club owner and the service company.
For more information on third-party service companies please contact:
Dudley Exstrom, Vice President of eFit Financial
Toll Free (877) 772-3348
info@efitfinancial.com
www.efitfinancial.com