Break-even status
The economic efficiency of commercial sports clubs is mainly measured by profitability. Profit is the balance of revenue minus cost. The results of the questionnaire survey show that 39.4% of the clubs are profitable and 30.3% of the clubs are in a flat and loss-making situation, which means that 60.6% of the clubs are currently unprofitable. The results of the survey also show that most of the clubs with an investment of less than 500,000 yuan in 2001 are flat or profitable, but the general situation is that the amount of profit is very small; the clubs with an investment of between 500 and 10 million yuan have an insignificant trend of profit and loss, and the clubs with an investment of more than 20 million yuan have a polarized trend of profit and loss.
Analysis from the break-even point
In the survey, the specific amount of profit or loss in the general commercial sports clubs as a trade secret do not want to disclose, so you can not get the club's return on total assets and sales margins of the club's profitability of these indicators to measure the club's profitability. Since most sports clubs have a large proportion of fixed costs, it is more reasonable to analyze the profitability of clubs of different sizes at the break-even point.
Break-even analysis, also known as breakeven point analysis, refers to the relationship between costs and revenues when profits are zero. Revenue = cost + profit, if the profit is zero, there is revenue = cost = fixed cost + variable cost, and revenue = sales volume × price, variable cost = unit variable cost × sales volume, so that from the sales volume × price = fixed cost + unit variable cost × sales volume, can be derived from the formula for the break-even point as follows:
Break-even point (sales volume) = fixed cost / per Contribution margin per unit of measure
In the formula, fixed costs refer to fixed expenditures such as apparatus and equipment, managerial salaries, advertising costs, etc. Variable costs refer to hourly wages, sales commissions, etc. The contribution margin is the amount of money left over after the price per unit sold is subtracted from the variable cost per unit, which is used to offset the fixed costs.
Commercial sports clubs with smaller investments concentrate on small gyms in general neighborhoods and some outdoor sports commercial sports clubs. Often purchasing lower priced equipment and ancillary facilities, offering fewer services, compared to a smaller proportion of fixed costs, and thus membership numbers above the break-even point is easier. In addition, this level of consumer choice of fitness is more easily affected by the price, small commercial sports clubs have reached the break-even point of the number of members, the strategy adopted is to reduce the charges or different time differential charges to attract more customers, profit. In terms of Beijing's current mass consumption market, small commercial sports clubs are flexible in their operations and their prices are low enough to meet people's current needs, so most of the clubs that invested less than 500,000 yuan in 2001 were flat or profitable; in the long run, the lack of business characteristics and poor compliance with industry rules are not conducive to promoting the club's benign development. Medium-sized commercial sports clubs are targeted at middle-income earners, and have begun to segment the market according to gender, age, and program, highlighting their business characteristics and focusing on service enhancement; most of these clubs are unprofitable due to the uncertainty of consumers. The profitability of medium-sized clubs is to gain members' patronage through accurate positioning and unique operation. Clubs with an investment of more than 20 million RMB are generally high-end fitness clubs or comprehensive clubs and golf clubs. These clubs have a very high proportion of fixed costs, a long payback period, a slow market start-up, and a high risk, so their marketing strategy is very important. As this type of club most of the annual dues are in the tens of thousands of dollars or even hundreds of thousands of dollars, can go here to consume the number of members is, after all, limited. Therefore, its point of profit in the high price and provide value-added services, so that the members of the consumption here can enjoy the noble service, can reflect the social status and identity, can broaden their horizons to make friends with celebrities. In fact, at present, the three sizes of clubs are faced with a small number of members of the unsaturated situation, due to the effective demand and effective supply of the contradiction and the lower cost-benefit ratio, so that most of the clubs do not make a profit.
Break-even analysis
The above break-even analysis of commercial sports clubs is only one perspective to analyze the current situation of break-even. Comprehensive analysis should be further analyzed from a wider and more perspectives. Commercial sports clubs in Beijing vary in size and grade, with different profit and loss. Overall, the whole fitness and leisure industry has a low level of profitability, both objective and subjective reasons.
(A) the objective aspects of the reasons 1. the objective law of the market mechanism
Fitness and leisure industry in China has just started, in the market is the lack of operators in the fitness and leisure market depth of knowledge, blind investment, the results of the fitness and leisure industry for the understanding of the laws of the law of the handing over of a large sum of money in tuition fees. On the other hand, the development of the market is lagging behind, although the income, education, fitness awareness of Beijing citizens are among the forefront of the country, but the young people's leisure time, consumption habits, cultural heritage and many other factors, but also in the constraints of their righteousness to become a member of the club.
2. The market is not standardized, the competition is not in order
The benign operation of commercial sports clubs must *** with the rules of the game to follow the market. There are no rules, not round. For the emerging fitness industry, the lack of perfect rules and tacit understanding of the rules. The evaluation standards for commercial sports clubs, accreditation has just begun to implement, and even some commercial sports clubs do not know that they still need to qualify for accreditation. With fewer rules, there is less protection for the industry, especially for some low-grade clubs, which have arbitrarily lowered their prices to attract more consumers, resulting in unorganized competition.
3. Business as usual, the lack of characteristics
Domestic clubs in some medium and high-grade to similar well-known foreign clubs as a sample, the implementation of copy. Some low-grade clubs and well-known domestic clubs as models, sketching. Even worse, it is not the blue that is better than the blue, but the east is like the west. To each club to walk around, or surf the Internet to browse its business projects, price strategy, marketing strategy always feel déjà vu, belonging to a club personality of things less and less.
(2) the subjective side of the reason
1. business philosophy is not clear
commercial sports clubs business philosophy is culture, is the brand, is profitable or for the return of society? There is a world of difference between the business results of clubs guided by different business philosophies. The problem is that the club operator's philosophy is not clear, the result is that the eyebrows and whiskers, the results are not good.
2. Misalignment of market positioning, market segmentation and market strategy
In the face of the consumer market, the club's operation should be targeted, targeted, clear objectives. The operation of most commercial sports clubs is rough, due to unclear market positioning, untargeted advertising and promotion, and discontinuous market strategy before and after, it is difficult to form a fixed consumer group.
3. The contradiction between setting prices and attracting members
Price is a key factor influencing consumers to spend money in clubs. Price changes on the number of consumers depends on the price elasticity, the consumer market response to price changes, sometimes very subtle, price reductions are often inconsistent with the impact of new and old consumers, and therefore the price strategy is not skillfully used will lose both sides of the coin.
Prescribe
From the analysis of the break-even point, clubs with different investment scales will adopt different business strategies to make profits, the key is to deal with the relationship between price and the number of members absorbed.
Beijing's commercial sports clubs have great potential for development and low profitability, mainly due to the early stage of development of the industry, and it will take time for the consumer market for commercial sports clubs to start fully, Beijing's commercial sports clubs should cultivate the consumer market through a variety of ways.
The potential for cost reduction lies in improving business management, and the key to attracting members is also to improve business management. Therefore, commercial sports clubs should emphasize the characteristics of their clubs, improve their business management, increase their business efficiency, and gain the loyalty of consumers.
The market is not standardized at the early stage of the development of commercial sports clubs, the government should introduce appropriate laws and regulations to regulate the market, and provide policy inclination in the early stage of the development of clubs to start and cultivate the consumer market.