Why Collections is Still Important for Your Gym’s Business
All gyms, regardless of size, member audience, or service offerings, are businesses at heart. And, in the world of business, getting paid matters. While it can be tempting to turn a blind eye to late member payments (especially if you’re a local community-based gym), these payments are how your gym operates on a day-to-day basis. Everything from utilities to maintenance to employee salaries can start becoming at-risk if cash flow is interrupted.
In order to maintain a steady payment schedule and keep member payments coming in on time, many gyms turn to collection agencies or partners to facilitate the gathering of late gym payments. In a similar way that a collection agency would work with an insurance or loan provider, collections companies find members who have unpaid dues and facilitate the repayment of any back-owed expenses.
For many larger gyms, relationships with collections agencies are a must to ensure that missing payments are made and that members actually are keeping up with their payments. Independent gyms, on the other hand, often think that collections and past-due member payments can be handled in person or through the gym itself. Unfortunately, this rarely works and often results in some serious consequences. It’s necessary to work with a collections agency – or at least have a clear collections strategy in place at your gym – in order to ensure your business remains profitable and strategically successful.
Collections are incredibly important for a few reasons.
- First, it is the only way to be completely sure that you’re going to get paid by members. Humans always want to think the best of others, which is why we don’t enter into member agreements thinking that the other party will back out without paying. Unfortunately, this kind of thing happens all the time and it pays to be prepared. An on-call collections agency or prepared collections strategy can make sure that nothing slips through the cracks and that your company is protected if anything should happen.
- Next, having a strong collections strategy in place, whether internally or with an agency, puts some legal weight behind the policies and procedures of your gym. Simply getting into a verbal argument with a member over dues won’t force them to actually pay said expenses. Bringing up a collections clause or involving a third party agency puts heft behind the words and can force a member to take action or else face legal reparation.
- And finally, letting customer delinquency run rampant in your gym, whether you’re operating a large establishment or independent spot, can negatively impact the reputation, success, and financial standing of your gym. Collection agencies and strategies can help rein in delinquency issues that are already occurring while working to proactively stop further membership delinquency infractions from happening.
In order to remain successful and competitive in the health and fitness industry, gyms must be able to remain financially viable, which means they need to have cash flow coming in from members. When members fall behind on payments, collections can help put them on the right path or mitigate any outstanding risk. You can learn more about managing the collections strategy in your gym here.