Oxygen Consulting has developed a COVID-19 financial diagnostic and support service that will help independent fitness businesses to gain a clearer perspective of their business for the period through to December 2021.
Planning for a reopening
Although UK fitness venues will begin reopening later in 2020, it remains unclear what the financial ‘health’ of many fitness establishments will be, especially when government support begins to be withdrawn. For this reason, Oxygen Consulting has developed a COVID-19 financial diagnostic and support service that will help independent fitness businesses to gain a clearer perspective of their business for the period through to December 2021.
A vaccine to treat the COVID-19 disease should be available during 2021 which should signal an increase in consumer confidence. Until this time, an array of fitness businesses will have to navigate an environment of weak consumer confidence, potential loss of some existing members as well as repaying business debts which have accumulated during a prolonged shutdown.
Oxygen Consulting’s new COVID-19 financial dashboard
Our financial modelling helps with questions such as:
1 How much rent can the business afford to pay over the next 18 months?
2 Over what period can rent arrears be repaid while maintaining a reasonable level of cash in the business?
3 What is the impact of no membership growth for six months?
4 Does my business require a government ‘bounce back’ loan to extend its cash runway?
5 Over what period can equipment lease arrears be repaid?
Here is a reopening scenario for an independent gym
The gym previously had 1,000 members and estimates that 80% will return over a four-month period. It owes five months in unpaid rent totalling £20,000. It stopped paying its equipment lease repayments of £1,500 per month. An 11% membership price increase will be introduced on opening.
Working with the club, we advise it negotiates with the landlord to pay no rent for the first month of opening and request to repay the rent arrears over 12-months. The equipment lease arrears are repaid over three months following a further one-month payment holiday. The business applies for a government bounce-back loan based on 20% of last year’s turnover, repaid over five years.
A focus on independent fitness businesses
We intend to focus our efforts on independent fitness businesses which comprise more than half of the entire UK fitness industry. They do not possess the people or cash resources of the large chains to successfully navigate their way through a very challenging period. Some areas of support include:
1 Providing a financial appraisal that will support discussions with business creditors.
2 Working with the business owners to develop new digital and ‘away from the venue’ customer experiences.
3 Helping the business to identify and apply for grants and business loans.
4 Supporting the business to identify new long-term investment partners.
Seeking a partner
Is there a business that could help to underwrite some of the costs to provide this as a service to independent gyms?
Please do contact us to explore how we can support your business or a client to successfully navigate the COVID-19 pandemic by drawing on our considerable expertise and network.