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  • ACE Personal Trainer Manual 5th Edition

    Chapter 18: Personal-training Business FundamentalsLesson 18

    2014 ACE

    After completing this session, you will be able to:Differentiate between the direct-employee model and the independent-contractor model, and the considerations for both when starting a career Identify the components of a business plan Discuss the importance of creating a brand and communicating the benefits of that brand to gain clientsUnderstand how marketing affects prospective clients as well as the retention of existing clientsEvaluate various factors whenchoosing a business structure Identify professional services necessary for starting a business Understand how a financial plan establishes budget and revenue goalsManage time by creating a schedule that establishes a balance of work and personal timeIdentify the traits of a sales professional and basic guidelines for selling personal training LEARNING OBJECTIVES

    2014 ACE

    A personal trainer must decide where and how to work:Directly for an employerIndependently as a contractor at a fitness facility or training studioWith clients in their own homesAs an entrepreneur by starting a training businessEach option has specific features, advantages, and disadvantages for a fitness professional.

    EMPLOYMENT OPTIONS

    2014 ACE

    DIRECT-EMPLOYEE MODELAdvantagesThe employer pays for marketing to all facility members who are potential clients.The employer pays for equipment and expense for repair.The employer may provide benefits (e.g., paid vacation, healthcare, or retirement contributions).Taxes are submitted on behalf of the employee.Opportunities exist for advancement, promotion, or reward.Opportunities exist for small-group training or group fitness instruction.DisadvantagesMust conform to the companys culture and standards, such as a uniformCompensation may be 4070% of the training fee, less than if the trainer was independentMay require a minimum number of hours worked per week or monthMay require sales goals, which could create a high-pressure environment

    2014 ACE

    INDEPENDENT-CONTRACTOR MODELAdvantagesAbility to establish a fee structure based on experience and marketAbility to move around and work at different facilitiesAbility to develop personal financial goalsDisadvantagesMust maintain business records and pay quarterly taxesResponsible for operational costs (e.g., marketing, rental fees, and healthcare)Time and expenses relating to travel and commuting between different locations (e.g., traffic, gasoline, and car mileage)

    2014 ACE

    STARTING A CAREEROne of the best ways to get started as a personal trainer and learn about the industry without assuming any financial risk is to work for an employer.There are many benefits of working at a health club or other fitness facility as an employee:A continual stream of new members, which leads to potential new clientsTraining to market skills and make sales, which can provide valuable experience before opening a businessExperience in marketing and working with the public, as many health clubs are often involved in community projects Media opportunities to be featured in a local newspaper, television, or radio show talking about fitness-related topics

    2014 ACE

    BUSINESS PLANNINGA comprehensive business plan will serve as an operating guide for achieving specific objectives as well as a marketing plan for attracting new clients. The components of a business plan are: Executive summaryBusiness descriptionMarketing planOperational planRisk analysisDecision-making criteria Any of the direct-employee, independent-contractor, or business-owner operating models will require a detailed business plan.

    2014 ACE

    EXECUTIVE SUMMARYAn executive summary is a brief, one-page overview of how the business fills a need within the marketplace, and includes: Business concept:A description, the service it provides, the market for that service, and why this particular business holds a competitive advantageFinancial information: Start-up costs, the source of capital, and the potential for sales revenue, profits, and return on investment (ROI) Current business position: Information about the owners, their experiences, and the specific legal structureMajor achievements: Awards received, specific protocols of the business, clients or local/national celebrities who agree to be used in marketing materials or endorsements

    2014 ACE

    BUSINESS DESCRIPTIONThe business description provides information to potential lenders or investors regarding the business structure, the market it will serve, and the people who will run it:Identify the operating model and how it is different or unique when compared to other training studios in the area Describe the fitness industry specific to the local market, including the present financial situation and the outlook for future growth Provide details such as the number and location of competitors, how many employees they have, and the number of clients to whom they provide services List the members of the management team, highlighting their knowledge, skills, and experience

    2014 ACE

    MARKETING PLANThe marketing plan specifies how prospective clients become paying clients. A trainer should first identify a target audience that can benefit from his or her personal-training services.An effective marketing campaign will communicate how a specific product or service meets the needs of a potential client.The marketing plan should list:Demographic information for the area around the training businessThe demand for personal-training servicesThe specific type or brand of training services being offeredThe plan for communicating the benefits of personal training to potential customers

    2014 ACE

    OPERATIONAL PLANThe operational plan describes the structure for how a business will operate.This includes:Creating an organizational chartIdentifying key decision makers Identifying employees responsible for executing decisionsAn operational plan for a trainer who is working directly for an employer will be brief.If a trainer is an independent contractor, he or she will decide which operational model to use to create a business structure.

    2014 ACE

    RISK ANALYSISRisks can be categorized into one of the following general areas: Barriers to entry costs associated with starting a business (e.g., rental fees, equipment, employees, and marketing)Financial access to the capital required to start or expand a business Competitive other players in the market who are competing for the same pool of customers Staffing managing employees and budgeting for a consistent payrollDirect employee most financial risk is covered by the employer; minimal risk from competition of other trainers or nearby facilitiesIndependent contractor conduct a SWOT analysis to categorize risks:S strengthsW weaknessesO opportunities T threats

    2014 ACE

    SWOT ANALYSIS

    2014 ACE

    DECISION-MAKING CRITERIAThe decision-making criteria of the business plan includes:A detailed cost-benefit analysis to demonstrate that the benefits of operating the business are worth the financial risks involved with establishing operationsHighlights that prove that the business will be a successful ventureMore time spent in the early planning stages allows for a business owner to:Focus his or her efforts on implementing the planAttract clients to the businessProvide the service once the business starts operating

    2014 ACE

    CREATING A BRANDA trainer should use the business-planning process to develop a brand identity for his or her training service:A brand represents what a service or product stands for and is an easy way to communicate its value to potential clients.Creating a brand to define the quality of personal-training service that a client can expect is an important step in establishing an almost immediate emotional connection with a client.If a trainer invests the time to develop a specific brand for his or her service, it will help prepare the client for what to expect during the personal-training experience. A brand establishes an instantly recognizable value for the product or service being sold.The benefit of developing a distinct brand of personal-training services is the establishment of a unique identity that effectively communicates the benefits of working with an ACE Certified Personal Trainer.

    2014 ACE

    MARKETINGWhen building a brand and identifying a target demographic, a personal trainer should take a few minutes to answer the following questions: What can be done to create and communicate a unique brand identity that will attract the target demographic? Who is the ideal target customer? Where is this target customer located? What time of day will this customer be interested in working with a trainer? What marketing efforts can be used to reach the potential customer to convert him or her into an actual paying client?

    2014 ACE

    COMMUNICATING THE BENEFITSThere are a number of different ways to market to prospective clients and communicate the benefits of a brand of training.Identifying the most cost-effective methods that will have the greatest reach, such as:Offering a complimentary training session to new clients Working on the fitness floor to build relationships that can eventually lead to new clientsDistributing business cards and using them as a session reminder cardCreating a portfolio or web pages of testimonials from satisfied clientsWorking with clients in a visible area for exposure to prospective clientsBecoming an ACE Certified Group Fitness Instructor and teaching classes

    2014 ACE

    MARKETING FOR CLIENT RETENTIONTo retain a client for the long-term, a trainer should develop a long-term exercise plan:By applying the science of periodized training, a personal trainer demonstrates the benefits of working with a trainer on an on