Disclaimer: For the purposes of this report, Profitability is defined as Class Revenue minus Instructor Compensation. This report does not include any other income or liability items such as rent, utilities, subscription fees, etc.
IPR Profitability Module
FitGrid's Instructor Performance Report Profitability Module is designed to provide studio owners with an understanding of an instructors profitability during a specified timeframe.
The module contains 6 elements:
- Pay Per Class
- Revenue Per Class
- Profit Per Class
- Pay Per Month
- Revenue Per Month
- Profit Per Month
Importantly, the reporting is based on a metric known as the Average Revenue Per Visit (ARPV).
Average Revenue Per Visit (ARPV)
A studios ARPV value is the blended rate it earns when a client comes in for class. The value is derived from a complex formula of understanding total revenue divided by total visits, while factoring in zero value pricing options (comps), direct revenue earned from class cards or unlimited memberships, along side third party revenue such as Classpass, Groupon or other resellers.
The nationwide ARPV average is $11.23
For example, if an instructor has a class with 20 people, the gross revenue for the class would be it's ARPV x 20. Using the statistic above, it would look like $11.23 x 20 = $224.60.
Pay Per Class
Pay Per Class is the average compensation an instructor earns per class. Variations of this compsentation include:
- Flat rate
- Base rate + bonus per head
- Other compensation variations
In order to understand the compensation value, FitGrid asks for additional information before a profitability for an instructor is able to be determined.
An instructor's compensation structure:
And an instructors compentation details:
Revenue Per Class
Revenue per class is derived from the average number of clients an instructor sees in class, multiplied by the ARPV (Average Revenue Per Visit) value.
In order to determine the average clients an instructor sees in a a class, the total number of visits to an instructor during the timeframe is determined, then divided by the total number of classes taught during the timeframe being reported.
- Jane had 600 combined visits to her classes in July
- Jane taught 40 classes in July
- 600 / 40 = 15 clients per class on average
- 15 x ARPV ($11.23) = $168.45 total revenue per class
Profit Per Class
Once the values for revenue per class (A) and instructor compensation (B) are known, understanding the profit per class (C) can be calculated.
- A - B = C