7 financial metrics every fitness business owner should track

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The health and fitness industry is quite lucrative, with an estimated market value of $101.46 billion in 2024. While the competition is fierce, there’s also a high potential for profits and recurring revenue.

If you are also passionate about fitness and want to share its amazing benefits with the world, you could say owning a gym or a fitness studio is your dream business. However, passion and potential for success aren’t enough to keep things running smoothly. 

You also need entrepreneurial spirit and full control of your finances. Between managing memberships, handling payroll, and making sure your cash flow isn’t on life support, the financial side of things can feel like an endurance challenge.  

Here’s the truth: if you’re not tracking the right financial metrics, your business might be sweating harder than your clients—for all the wrong reasons. 

If you’re ready to learn, here’s a detailed guideline of all the essential financial metrics every fitness business owner should track.

1. Revenue & profit margins

“Revenue is the lifeblood of any business – it keeps the doors open, the lights on, and staff paid. But revenue alone doesn’t tell the whole story.” — Gary Hemming, Owner & Finance Director at ABC Finance.

The total revenue gives you a clear picture of how much money is coming in from memberships, personal training, class packages, or retail sales. But it’s profit margins, both gross and net, that determine how much of that revenue actually stays in your pocket after covering costs. 

A strong gross profit margin means your pricing strategy is working, while a healthy net profit margin ensures your business remains sustainable long-term. 

If margins are too tight, it’s a sign to reassess expenses, pricing, or operational efficiency. A studio or gym with increasing revenue but shrinking profits isn’t growing; it’s struggling. 

Track these metrics over time to spot trends, make data-driven pricing decisions, and plan for growth.

2. Customer Lifetime Value (CLV)

This is a key metric that helps you understand how much revenue each customer brings to your business over their entire membership. 

To calculate it, you use this formula:  

(Average Monthly Revenue per Customer) × (Average Membership Duration in Months)

A high CLV means your members stay longer and spend more, making your business more profitable. This means you can focus on improving the overall customer experience rather than constantly chasing new sign-ups.

If CLV is low, you may need to work more on your retention strategies. Try offering loyalty programs, personalized training plans, or exclusive member perks.

Why does this matter? Because acquiring new customers is expensive—often five times more costly than retaining existing ones.

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3. Member retention & churn rate

“In a competitive market, a solid retention strategy could be the difference between staying in business and not. If you can keep existing customers engaged and committed, you will have more predictable revenue, stronger community loyalty, and less reliance on costly new customer acquisitions.” — Michael Nemeroff, Co-Founder & CEO at RushOrderTees.

Retention and churn rate are two sides of the same coin: one reflects stability, while the other signals potential trouble.

Here’s how:

• The retention rate measures the percentage of members who stay with your fitness studio or gym over time. A high retention rate means you’ve built a base of loyal customers who appreciate your services.
• The churn rate is the percentage of members who cancel their memberships. A rising churn rate can indicate dissatisfaction, financial concerns, or competitive alternatives.  

A strong retention rate leads to higher Customer Lifetime Value (CLV) and more stable revenue, while a high churn rate means constant marketing costs to replace lost members.  

4. Equipment & facility costs

These are major overhead expenses that directly impact profitability. Whether it’s a lease or mortgage payment, utilities, maintenance, insurance, and the cost of purchasing or upgrading gym equipment, it’s crucial that you keep an eye on them.

High equipment costs can quickly eat into profits, especially if machines require frequent repairs or replacements. So do facility costs, like rent and utilities, especially if you’re close to the city center.

Your goal is to have both the equipment and facility costs aligned with your revenue. If they’re too high, look for methods to trim down the costs.

Instead of buying new equipment, consider leasing options or purchasing high-quality refurbished machines. Keep track of regular maintenance to extend the lifespan of your equipment and reduce any unwanted surprises.

If you’re just starting, you may want to consider a loan to cover these expenses. According to Jeffrey Zhou, CEO and Founder of Fig Loans, "A well-structured loan for equipment or facility upgrades is an investment. Spreading costs over time preserves cash flow, allowing you to scale strategically while maintaining financial stability."

5. Cost of acquisition & marketing ROI

Marketing is essential for growing your fitness business, but if you’re spending too much to attract new members, your profits will take a hit.

To make sure your investments are bringing results, you need two metrics: Customer Acquisition Cost (CAC) and Marketing Return on Investment (ROI).  

Here’s how they work:

Customer Acquisition Cost (CAC)

CAC measures how much you spend on marketing and sales to gain a new customer. To calculate it, divide the total marketing spending by the number of new customers. If the result is high, you pay too much to attract members.

According to Brooke Webber, the Head of Marketing at Ninja Patches, "Customer Acquisition Cost is often ignored when making decisions. However, if you want to know if your money is wasted on the current marketing efforts, you have to include it in your trackers."

Marketing ROI

This metric is a bit more general and gives you a bird’s-eye view of how your marketing efforts are going (if they’re delivering a positive return or not). It’s also a clear indicator of having to adjust course or change strategy (if the campaigns aren’t delivering a positive return).  

Essentially, it answers the question: Are you getting a good return on your marketing spend?

Overall, these two metrics help you identify the most cost-effective marketing channels. For example, if paid ads have a high CAC but referral programs bring in members at a lower cost, it makes sense to shift your budget to referrals. 

The goal is to maximize impact and minimize spend.

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6. Payroll & staff productivity

In the fitness world, next to equipment and facilities, payroll is one of the largest expenses. As a fitness business, you employ many professionals, such as personal trainers, receptionists, sales, marketing, or maintenance and cleaning staff.

The best way to keep an eye on payroll is to see it as a percentage of revenue. This gives you a clear view of how much you spend on staffing and whether this aligns with your earnings. 

Keep this ratio balanced to make sure you're not overstaffed or under-resourced.

Nowadays, you can also use various digital tools to automate and streamline many time-consuming tasks. For instance, there are specialized platforms that automate class bookings and personal training appointments.

The same is true about processing payments, invoices, and payroll. You can automate many of these tasks with the help of unified communications as a service technology. 

7. Monthly recurring revenue (MRR) & cash flow

“Cash flow is another crucial element in business. Without it, even the best services and memberships can’t sustain long-term growth. Good cash flow management lets you stay flexible, make timely investments, and weather financial challenges confidently." — Lev Peker, CEO at CARiD.

Positive cash flow ensures you have enough funds to cover operational costs, staff payroll, and equipment maintenance without dipping into reserves.

MRR, on the other hand, is the income you know comes every month from membership subscriptions, personal training sessions, or class packages. MRR stabilizes cash flow and gives you a good idea of future revenue.

A good growth strategy is focused on ensuring customers have enough incentives to boost the MRR and keep a healthy cash flow.

Wrap up

Financial metrics give you the insight to make smarter, data-driven decisions that drive growth and profitability. Whether you’re optimizing your marketing or improving retention, these numbers reveal opportunities for improvement. 

Start monitoring these key metrics today, and take control of your fitness business’s financial future!

Read next: 5 finance tips for small business owners that elevate company growth

FAQs

1. How can I improve my member retention rate?

Focus on boosting your member loyalty and engagement. Offer a combination of personalized services, loyalty programs, and discounts for long-term memberships or referrals.

2. What’s the best way to calculate my business’s cash flow?

Cash flow is the difference between the money coming into your business (from membership fees, for instance) and the money going out (like payroll, rent, and equipment costs). If the difference is positive, you are still on the right track. However, it’s crucial to keep an eye on your inflows and outflows to avoid financial gaps.

3. What automation tools can I use for better financial management?

You can automate many of your business’s administrative tools. For this, look for platforms designed for the fitness industry, like membership management software, payroll systems, and booking platforms. These tools (and others) help you reduce costs and focus on growing your fitness business.