Strategic Planning Continued from page 35
Another factor that is difficult to predict is how members will feel about returning to clubs . “ It ’ s a challenge to speculate on consumer sentiment , member degradation , banking limitations or future closures ,” Sanders said . “ With this in mind , we have to retrain our decision making . We can ’ t plan or operate with pre-COVID euphoria . Instead , we have to plan for contingencies and protect cash .”
Approaching Budgeting in 2021
Clearly , planning for 2021 is not going to look like planning for an ordinary year . The tools that have been effective and appropriate in the past may not be the right fit going forward , and the process of creating the budget may look different this year .
“ Historically we have used an Excel-based budgeting package that relies on our historical financials and operational data as well as combines our various department budgets that roll up into our company budget ,” Amato said . “ This year , in light of COVID , we ’ ve accelerated conversations with budgeting software providers ( specifically Vena Solutions and Adaptive Insights ) as we look for a solution that allows us to be more flexible and quick-reacting .”
For Preite , strategic planning and budgeting normally begins with an annual executive retreat meeting where everyone is prepared to discuss the key areas that need to be focused on , the resources that are needed , and pressures and opportunities on the horizon . “ From there , a preliminary plan is built and adjusted as necessary to come to an overall target that is agreed upon by the management team and the board ,” he said . “ We leverage a Workday planning model that was implemented in 2020 . Currently there is more
constant monitoring and adjustment of the forecast due to COVID based on the constant changes in the business .”
Sanders explained that his group has an approach that is based on disciplined spending with a macro or big-picture perspective . “ For strategic planning , we utilize an EOS ( Entrepreneurial Operating System ) facilitator to conduct our two-day annual
“ While we don ’ t think this will last forever , it ’ s the reality until customers feel comfortable using our facilities – probably when a safe vaccine is released .”
– Matt Raimondo , controller at PF Raimondo Group ,
planning off-site ,” he said . “ This results in the framework that each department then utilizes to build up the forecast and budget . The process hasn ’ t changed , but the messaging to each department head is more focused on cash preservation and prudent spending .”
Glenn Norris , chief financial officer of PF Growth Partners , LLC , explained that a SWOT analysis is a typical part of the planning and budgeting process for his team . “ The biggest change is defining in detail all the ‘ threats ’ ( the ‘ t ’ in SWOT analysis ) relative to the COVID business interruptions and the ripple effects to revenue line items and expense line items .”
2020 Issue 4 | GearedUp
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Final Words of Advice
Facing 2021 is not going to be easy . There is much to consider and a lot of uncertainty to face , but fortunately there are some helpful words of advice from franchisees .
“ My advice is keep it simple ,” Raimondo said . “ Plan for being closed double or triple what you just were this past year . Plan on $ 0 revenue and a full expense list . Take these figures and project how long your cash reserve will last for . If what you have on-hand won ' t last for as long as you need , then it ’ s time to plan on how you can close the gap … While we don ' t think this will last forever , it ’ s the reality until customers feel comfortable using our facilities – probably when a safe vaccine is released .”
The team at PF West Michigan said , “ Focus on COVID protocols to ensure members and employees feel safe , focus on the brand and everything that makes Planet a great place to be , focus on your team and realize how difficult it is for them right now , and look for ways to improve your organization and operations . Hold on to your cash – and your hat ! The next four to six months could be rocky , but once we get through this pandemic – and we will – we believe we are well-positioned to continue to be the leader in the fitness industry !” G
Kate Betts is the PFIFC communications coordinator . Betts may be reached at kateb @ pffranchisee . org or 678-737-2396 .