To start: does your business even need a profit center?
The short answer? Probably.
Unless your core product is one-of-a-kind, most likely you are competing with several similar businesses within your immediate region.
Take health and fitness centers for example. The big players are offering amenities along with rock bottom membership prices. The catch is that they charge premiums to use their amenities once they get your foot in the door.
For businesses with fewer locations, this can be tough to compete with because amenities can require a hefty upfront price tag.
By installing profit centers that customers are already comfortable paying for, like smoothie bars and tanning, you can offer competing membership prices and supplement with profit center income. You also boost customer satisfaction and retention by making sure your customers don’t feel like they’re getting nickel-and-dimed every step of the way.
Now, what makes a profit center successful?
Some cost more than others to start up, have varying margins and require varying amounts of labor.
First, you must do your due diligence and make sure the need exists for your desired profit center. Supplemental income for small businesses is a good idea but only if it is in line with your brand and core mission.
If you can’t prove a desire for the amenity, that’s a good sign it won’t succeed.
“…profit centers help to drive the lifetime habits and membership value of members while often enhancing their results, which keeps them coming back.” – club solutions
If you do it right, profit centers can provide up to 40% of your location’s net revenue.
There are several to pick from: smoothie bars, tanning, personal training, group fitness, nutritional coaching, etc.
The best profit centers provide you with a high margin product and a low cost to manage.
Our most successful profit center picks:
A $2 billion + industry, smoothies are one of the most profitable beverages in the industry with an average of 60-70% GP and customers are already willing to pay a premium for a healthier product.
With the right supplier, your smoothie bar program will be easy to operate, easy to maintain and require no new staff to manage it.
SmoothieCompany.com for example, recommends utilizing the front desk employee to manage the smoothie bar. With a portion controlled and shelf stable system, employees can prepare a smoothie and set it to blend while they take care of member checking in.
The other key to running a smoothie bar? Get most, if not all, of your supplies from one vendor. It’s a pain to get protein from one supplier, supplements from another and puree from someone else.
SmoothieCompany.com supplies equipment, product, accessories, signage and more. They even have an in-house marketing to take care of any promotional requests you may have.
“A gym is not complete without the presence of a juice bar. Establish a juice bar in the center of your gym and you will find that it pulls in a steady stream of ancillary revenue.” – Zogics
Requiring minimal up keep, tanning is another multi-billion dollar industry with relatively low investment and long-term profit potential.
The secret here is to not skimp on equipment. Nicer equipment may be more costly but keeps the customer ultra satisfied and minimizes maintenance.
Like a smoothie bar, offering tan allows you to customize on a service that your members are already paying for elsewhere.
One rule of caution: make sure to stay up to date on tanning bed regulations which can vary drastically by state. Indoor tanning can become a health issue for some individuals.
If you’re not sure about offering UV tanning options, consider spray tan options instead.
Traditional massage services can require expensive labor and a large amount of square footage but the newest offerings minimize those issues.
Offering a massage service of some kind of dry massage- HydroMassage is popular- really rounds out your amenity offerings.
No longer is a massage only seen as a luxury service. These days, massage is becoming akin to visiting a chiropractor.
Bonus: Fitness Gear
Most people will just abandon their workout if they forgot the proper gear like headphones, or goggles if you have a swimming center.
These items might not be the fastest moving but can be bought at extremely low cost and don’t carry an expiration date.
Smoothie bars are a safe place to start if you’re thinking about adding a profit center to your facility.
In some smoothie bar packages, SmoothieCompany.com even includes enough product with your initial purchase to make back your investment in smoothie sales.
Multiple Profit Centers, What Every Club Owner Should Know – Club Solutions
Increase Your Gym Profitability – Zogics