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Unprecedented Pruning for Unprecedented Growth

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During arguably the most demanding time in history for small businesses, entrepreneurs are thriving not because of their reliable success, but because of their commitment to think practically about growing what’s right in their business and pruning what’s not.

Pruning for Growth

True growth comes from analysis of what’s increased—profit, enrollment, demand, or another measurement of value. Pruning comes into play when it’s time to say “no more” to something such as a pricing structure, program, equipment purchase, or hire.

Now, more than ever, it’s crucial for businesses to pay attention to what they can grow AND prune. Whether you run a dance studio, gym, yoga studio, boutique fitness, martial arts school, spin studio, music or theatre program, the biggest questions right now are how to best serve clients and which programs will keep your doors open. So how can you bring this growth mindset into your business as you plan for the future?

Popular buzzwords in the industry such as “fail fast” or “fail forward” are everywhere. What does this really mean? What is a failure, actually? Is it closing an entire business, losing everything? Or is it smaller, such as removing a program that fails to launch before too much is invested? Is it shelving a program or reinventing the delivery? Or perhaps not making the hire or releasing a hire back to the market?

According to Darren Hardy, a renowned business mentor, entrepreneurs are failing all the time—and for good reason. Failure is not the absolute loss of everything; it is not a catastrophic event. Failure is simply understanding when to say no to something, or when to stop the bleeding in some area of your business. It could be pricing, an offering, an equipment purchase, or a hire. Sometimes failure is a new company or idea that doesn’t get traction. Failing daily and often is the entrepreneurial version of the school of hard knocks. All these learnings result in systems and processes for measuring when it’s time to call it done and move to the next idea.

Sometimes a really great program can mask the shortcomings of another under-producing program. You may need to dig deep into each program by time slot, age group, class type, staff, or pricing. This task is never done and there is a huge opportunity for restructuring your business as you reopen your physical building and start to offer in-person services again.

Naomi Keane, the Calgary franchisee for Oranj Fitness, says revenue is the only metric she uses to determine program viability. As a boutique fitness studio, Oranj Fitness has no room for classes that don’t create income. If a program is profitable, it stays, and if it loses money, it has to go. Naomi says she has been quick to create new offerings to ensure she is serving what her clients want.

When asked what factors are used in how GYMVMT, a large format club, decides to prune a program, Scott Wildeman, Senior Vice President of GYMVMT, and President of the Fitness Industry Council in Canada says, “Without a doubt: attendance. Members vote with their feet. From there we look at industry trends—what’s popular, what’s on social media—and also what members want. It’s very important to listen to your clientele.” For example, step classes have been falling by the wayside across the industry; however, in their “women only” facilities, step classes are still popular. GYMVMT is one of the few facilities in Canada still offering this class, and their members who participate love them for it. In other words, a trend is not the only way to measure the success of a program.

Transitioning for Success

When many program-based businesses went to an online platform in March of 2020 as a result of COVID restrictions, entrepreneurs set about creating new ways to deliver their services to their clients. Now, after months of transition, many are embracing this as a time of immense innovation and a unique opportunity to apply a growth mindset to business. Never has a time like this presented itself to pull apart all aspects of your programs and reopen with revised and restructured practices.

Growing for the Future

Naomi of Oranj Fitness says the pivot to online classes has been smooth for her boutique fitness locations. The biggest lesson was how welcome the pre-recorded classes have been to her clients. Because of this success, online classes will be rolled into membership offerings going forward. Additionally, Oranj Fitness is now serving clients in 37 countries—something they did not anticipate before the pivot since they serve only Western Canada with their brick and mortar locations. Naomi says she is keeping a sharp eye to ancillary programs and services, as she sees those being the next step forward for her business.

For GYMVMT, Scott says that the lessons from COVID have affirmed what large format clubs already knew: people want choice. Large format clubs already offer multiple options for one membership, and they also offer a la carte pricing, where members can pay for only what they will use. This business model—which includes boutique offerings under one roof—has allowed them to pivot quickly because choice has always been a top priority in their offerings. Scott also states that GYMVMT’s online pre-recorded classes are here to stay. They are reporting that many members are achieving better fitness outcomes as a result of on-demand training availability and better adherence to their investment in their health. Scheduling is no longer a limitation for these members, and they are reaping the benefits.

Opportunities Abound

An industry expert, Scott predicts that approximately 25 to 30% of the gym market will be lost as a result of the pandemic. “Many of these businesses were hanging by a thread prior to closure. Now the opportunity begins,” Scott says. He believes more market share will become available to those in a position to take advantage of it, and there will be increased opportunities to partner with adjacent businesses. Scott says he is hopeful the changes to the industry will move the industry toward better practices.

One thing is certain, the landscape for service businesses has been forever changed, with online classes becoming part of the norm. There remains an opportunity to innovate and grow both online and in-person formats while balancing what clients clearly want: choice and safety. Balancing tough decisions with a growth mindset allows you to make the necessary and successful pivots needed to prune and grow your business accordingly.

Profitable programs with long-term sustainability are possible with your due diligence. Analyze what’s not working inside your business so you can prune (see worksheet). Get creative with what you want to grow. Remember that pruning and growing go together: The more you prune a rosebush the more prolific
the flowers become.

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