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The Business Plan: Part 25 - Key Performance Indicators Part 2

Today's blog will continue the discussion of Key Performance Indicators and why they are extremely important to implement with all of your employees. To quickly recap, Key Performance Indicators (KPIs) are benchmarks that you establish for your staff, which are their minimum job requirements, not stretch goals. The purpose of KPIs are to monitor your staff's performance and hold them accountable. They also allow you to track employees who performance accurately, and reward employees who they exceed. Whether you are a single affiliate owner or a major corporation, KPIs allow you to free up your time by delegating work to your employees, greatly increasing the success of your gym. It is impossible for one person to do multiple job duties, therefore KPIs are established.

In the previous business plan blog about KPIs, we established how to create KPIs based on important duties that would streamline your business, and how to track your employee’s progress. Today's blog will discuss how to weigh each of the KPIs, how to reward your employees, and how often you should review KPIs with your employees.

To recap the previous blog, here are the KPIs that we created for our gym:

Membership Sales: Each of the front desk staff have their own individual membership sales goals.

Conversion Ratio: Measures the number of new first visits per month to the number of people converted to a purchase.

Type of Memberships: Number of Month to Month memberships and Annual Memberships sold.

Cleanliness: How clean is your gym?

Conversion of Existing: Conversion ratio of class pack and Month to Month members to Monthly Membership, Class Packages, Pre-Paid or Annual Memberships.

Yelp Reviews: Number of Yelp or Google+ reviews each month.

Weighing the KPIs

All the KPIs we created for our employees are important but some yield you greater results. KPIs are based on a total score of 100%, so you need to decide which ones are the most important and assign a percentage to them.

Here is how our KPI's are broken down.

Membership Sales: 30%

Conversion Ratio: 25%

Type of Memberships: 15%

Cleanliness: 5%

Conversion of First Visits: 15%

Yelp Reviews: 10%

Total of 100%

Assuming your membership sales goal was 20 new deals for the month, if your employee hits 20 memberships then they achieved 100% of their goal. 17 deals is 85% and 22 deals is 110% of their goal for that KPI. A simple Excel file can take individual percentages and weigh them as a total. Each of the KPIs would be weighted the same way. The goal is have the total KPI number above 100%.

Tracking of the KPIs

Your database software, MindBody or Front Desk, has the ability to track most of the KPIs that we created. At the beginning of each month you should prepare a KPI report and personally present them to each of your employees. By doing this monthly you will be able to identify problems with your business and make corrections.


If your employees meet or exceed their KPIs, reward them with a bonus. The bonus can be as little as $500 or as much as $10,000 per year. KPIs can be paid quarterly, semi-annually or annually. If you choose quarterly here is how it works: If you employee hits 110% of their KPIs in January, 90% in February, 105% in March and 100% in April, their total averaged KPI would be 101%. Assuming the quarterly bonus is $500 they would receive 101% of the $500 so $505. 90% would be $450. Anything less than 90% averaged KPI does not receive a bonus.

Throughout your box owner journey, you have made important decisions from finding the right space/location, purchasing quality Equipment, to hiring the right coaching staff. The journey should not stop once your box opens. Spend the time and create KPIs for each of your employees. I assure you the productivity level of your employees and the success of your business will benefit from it.


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