Salon, spa & fitness
Fitness Cash Flow Calculator
Works fitness cash flow, where prepaid memberships and seasonality collide.
Result
Profit and cash are different things and a growing contractor can run out of cash while profitable, because the work is paid for before the invoice is. This models collection speed, not seasonality.
Get a Free Business AuditHow the calculation works
Receipts against the monthly fixed base and the opening balance, giving the running position and months of runway. Recurring membership billing is a favourable cash pattern, and the complications are prepaid annual memberships, which bring cash forward against a year of obligation, and the strong seasonality of joins.
What moves the number
- Recurring billing, which is favourable and predictable.
- Prepaid annual memberships and the obligation they carry.
- Seasonal join and churn pattern.
- Equipment finance and replacement.
Where this one goes wrong
Prepaid annual memberships are a year of service already paid for, and spending that cash in the month it arrives leaves the facility serving those members for eleven months with nothing coming in from them, which is how a strong January produces a difficult autumn. Hold the obligation. Equipment replacement is the other item, since it arrives as capital rather than monthly expense and a facility without a reserve meets it at the worst time.
Before you quote
- Treat prepaid annual memberships as deferred obligation.
- Reserve monthly for equipment replacement.
- Plan for the seasonal join and churn pattern.
Questions
About this calculator
Why does a strong January produce a difficult autumn?
Prepaid annual memberships. The cash arrives in one month and the obligation runs for a year, so spending it on receipt leaves the facility serving those members with nothing coming in from them for the remaining eleven months.
Is recurring billing good for cash flow?
Generally yes, since it is predictable and collected in advance of the month rather than after. That is a real advantage, and it makes prepaid obligations, seasonality and equipment capital the main things to manage instead.
How should equipment replacement be funded?
From a monthly reserve, because it arrives as a capital requirement rather than a monthly expense and the cycle is predictable. A facility without a reserve meets it at the point where its cash position is already weakest.
The formula
cash tied up = daily invoicing x days to get paid
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How to use this calculator
- Invoiced per month ($). Enter your own figure; the page starts at $48,000.
- Payment terms (days). Enter your own figure; the page starts at 30.
- Days guests actually take. Enter your own figure; the page starts at 46.
- Costs paid out per month ($). Enter your own figure; the page starts at $38,000.
- Cash in the bank now ($). Enter your own figure; the page starts at $22,000.
The result updates as you type, so you can try a figure, see what it does to days of funding gap, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Invoiced per month | $48,000 |
| Payment terms (days) | 30 |
| Days guests actually take | 46 |
| Costs paid out per month | $38,000 |
| Cash in the bank now | $22,000 |
What comes out
| Result | Value |
|---|---|
| Days of funding gap main result | 16 |
| Cash tied up in invoices | $73,600 |
| Monthly surplus | $10,000 |
| Months of cover | 999.0 |
There is $73,600 sitting in unpaid invoices, and customers take 16 days longer than your terms allow. That gap is the money you are lending them for free.
How sensitive the answer is
Holding everything else steady and changing only invoiced per month, this is what happens to days of funding gap. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Invoiced per month ($) | Days of funding gap |
|---|---|
| $24,000 | 16 |
| $36,000 | 16 |
| $48,000 example above | 16 |
| $72,000 | 16 |
| $96,000 | 16 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Invoiced per month ($)
- A money amount, starting at $48,000.
- Payment terms (days)
- A number, between 0 and 180, starting at 30.
- Days guests actually take
- A number, between 0 and 365, starting at 46.
- Costs paid out per month ($)
- A money amount, starting at $38,000.
- Cash in the bank now ($)
- A money amount, starting at $22,000.
What the results tell you
| Result | What it is |
|---|---|
| Days of funding gap | The headline result. A number. |
| Cash tied up in invoices | A money figure. |
| Monthly surplus | A money figure. |
| Months of cover | A decimal figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.