A health business advisor interviewed an energy expert. Here were their takeaways.

Did you know that your electricity provider could positively influence your fitness business valuation? Or that small efficiency changes could have a big impact on your bottom line?

Most operators don’t, but fitness entrepreneur and advisor Pete Moore does. The health industry veteran sat down with David Energy CEO James McGinniss on a recent episode of his HALO Talks podcast, digging in on all things energy and why it should matter to fitness businesses. 

Pete is the founder & managing partner of Integrity Square, an advisory firm dedicated to empowering entrepreneurs in the Health, Active, Lifestyle, and Outdoors sectors (HALO). Pete’s team boasts decades of experience leading and advising in the fitness sector, so they know what moves the needle. And as a solution that proudly helps many multi-location fitness companies regain control of electricity costs, we’re excited to put the spotlight on electricity. Our first order of business – educate health club business owners on why energy savings are so crucial. 

"Many health clubs I work with are open 24 hours, so utilities are a meaningful component of their expenses," says Pete, adding, “HVAC systems are a big line item that can be a big deduction or a flag for a buyer.” Read on for our top tips and takeaways on how health club operators can drive savings and optimize their energy spend for better business.

Why energy savings matter for health clubs 

If you’re a health club operator, you likely got into this business for many reasons. Perhaps you’re inspired to help people live healthier lives, or recognized a tremendous opportunity for growth in a booming industry – but it’s probably not because you wanted to dedicate your time and effort to learning about electricity.

There’s so much to pay attention to in the day-to-day of owning a club, that the investment it takes to improve your energy spend might seem like small potatoes. But what can feel like an insignificant piece of your P&L could be a big factor. In fact, for most health clubs, between 40%-60% of total energy consumption is from one source (HVAC) – meaning small changes can make a big difference. 

When you start to turn your attention to energy, big opportunities open up:

• Save thousands. From fixing billing issues to providing fixed-cost plans that protect you from volatile energy market fluctuations, electricity is a not-insignificant part of your business’ P&L that deserves a second look.

• Enhance your business valuation. Your HVAC system is a 6-figure line item of your business’s overall value, and potential buyers are wary of the cost to replace. Gaining a better understanding of your HVAC system and how to manage it optimally can maintain its operation and value—as well as that of your overall business.   

• Avoiding business headaches. Whether it’s asking for the millionth time, “Who turned down the thermostat?” to decoding complex bills that seem higher than they ought to be, choosing the right electricity partner can take energy management off your plate, so you can focus on running your business while knowing your electricity is in good hands.

5 tips for lowering your club’s costs

Now that you understand why fitness operators should be thinking about energy to maximize their profits… here’s how to do it. Read on for the top takeaways James shared on HALO talks to drive down energy spend and find savings in unexpected places. 

1. Switch to a smart thermostat. With a smart thermostat, you can set a schedule based on business hours to maximize savings, control who has override access, reduce unnecessary stress on your HVAC unit, and be sure you’re running as efficiently as possible. 
2. Choose an electricity retailer who offers a fixed rate. Prices can fluctuate 300x in the power market and jack up your energy bill. Independent retailers like David Energy can offer fixed rates that allow club owners to know what their monthly costs will be and stay protected from market fluctuations (like the major Covid-driven hikes in 2020 or the recent increases in New Jersey). ‍
3. Know what a “normal” bill looks like. Understanding your baseline for electricity bills will help you spot mistakes or overspending sooner – which are way more common than you may think. With David Energy clients, we’ve seen everything from businesses billed with the incorrect rate class, the wrong volume, or even for their neighbor’s usage. Contact your utility provider ASAP if you suspect anything abnormal.‍
4. ‍‍Look out for scams. Slamming scams happen when providers fraudulently switch you to their service without your knowledge, and then double or triple the rate you pay for electricity. Be aware (and make your employees aware!) of this, and be conscious of anyone asking for your utility account information. Contact your supplier ASAP if you notice any odd changes.
5. ‍Understand and manage peak demand. Peak demand has to do with the amount of power you use at high-demand times, and it can cost you big. Manage it – and decrease your bill – with tactics like staggering when you use equipment, optimizing HVAC efficiency, and enrolling in demand response programs (like those offered by David Energy!)

This might seem like a lofty list – but as James lays out in the podcast, David Energy can do all of this for club owners. 

“Health club owners and operators don’t need to be as passionate as we are about electricity. They have a million things on their plate, and thinking about power shouldn't be at the top… We love doing that heavy lifting for this segment, we bring all the sophistication and knowledge, make it very easy and simple, and we're happy to do that work for them."

Energy spend management puts your electricity on autopilot

Why choose a partner like David Energy? As James puts it, “For everyone from the two-location gym owner, all the way up to Equinox corporate, we've been able to find savings opportunities for fitness operators that range from a couple hundred dollars all the way up to $10K per location.”

It’s clear that no matter the size of your company, investing in the right energy partner  to support cost-saving changes is a crucial improvement for business profitability and longevity. 

Just take the story of one New York-based Crunch Fitness location. For this franchise, monthly electric spend used to feel like an uncontrollable expense. But David Energy helped Crunch Fitness rein in costs, improve efficiency, and take advantage of lucrative energy market programs typically reserved for large, sophisticated commercial buildings. 

Through the David Energy software platform, we managed their thermostats with no operational effort needed from Crunch – generating over $6,000 dollars in annual savings across their gyms. Of another David Energy fitness client, James noted, “In our first year with them we saved them $11K across two clubs. It's not the biggest thing on their P&L, but it's basically free money.” 

How much ‘free money’ could your business see? It’s time to find out. 

Learn more about how David Energy can help your fitness or health club avoid electricity price increases, slamming scams, and more. We stay laser-focused on helping you save on electricity and manage your usage, so you can spend more time on what you do best. As Pete puts it, "You need to prioritize this as part of your 2024 action plan to maximize profits…and save the environment a little at the same time.”

And if you want to dive deeper into this topic, listen to the full podcast episode (and the full backlist!) with James and Pete on HALO Talks here.