Without a Doubt, Community Counts: Patricia Laus took a failing business and turned it into a thriving two-club operation that connects with the communities it serves.
In 1983, when Patricia Laus stepped into the family business — What's Your Racket Inc., a 17-court racquetball and fitness club in Manasquan, NJ — and realized that it wasn't living up to its potential, she decided to take on the business. And she hasn't looked back since.
The club is now The Atlantic Club, sitting on 44 acres with the front 24 acres fully developed and the back 20 acres equipped with sports fields, woods and walking paths. Its children's camps, sports-specific training (including football combines), swim leagues and lessons, tennis offerings, and spa help it attract families in the area. Eight years ago, Laus opened a second facility in Red Bank, NJ. It is a smaller, more adult-oriented club with a spa.
The transformation from a racquetball club that grossed $500,000 a year to today's two facilities that gross more than $34 million per year together wasn't an easy undertaking, especially considering Laus had no background in fitness or business. She was a nurse, but she got caught up in the aerobics craze of the 1980s, and the more she learned about the business and the industry, the more she saw the possibilities in the club.
“There's a lot of right time, right place,” Laus says about the success of her business.
When she first began running the club, Laus joined the International Health, Racquet and Sportsclub Association (IHRSA) and hired as her consultant one of IHRSA's founders and board members, Curt Beusman, who at the time was owner of the Sawmill Athletic Clubs in Mount Kisco, NY. She credits business organizations, IHRSA, industry people, the Faust Roundtables, consultants and long-time staffers with helping her grow the business.
“I constantly brought another set of eyes in,” she says.
In the beginning, her club, like many at that time, was a pay-as-you-go facility. But she wanted to change that because she believed that the monthly dues membership concept was the only way her club could sustain itself and become profitable. First, she had to determine the club's price point and how to transition to the new model.
“One of my lasting visions was Curt standing in my door asking me, ‘Do you think you have the guts to do $58 a month?’” she says. “I remember my heart sinking and saying, ‘Yes,’ and thinking, ‘How am I going to do this?’”
She did do it, transitioning the club to a membership model that a year later had 800 members. Today, the two clubs have 9,000 members as well as several thousand nonmembers who use the ancillary businesses at the facilities.
Adding ancillary businesses meant having a broad vision for the clubs, but Laus had doubts about the wisdom of being so broad, particularly after sitting on a panel next to another club owner who had a narrow vision for his club.
“He asked me if I could be a master of all things,” she says. “I wondered if I was doing the right thing, but I decided to go ahead and do it.”
One of the first things she did was buy some of the land surrounding the original building. The area around the club had been farmland and a summer resort community, but it began to transition in the 1980s to a year-round community. She spent $500 an acre — quite a deal considering that half an acre now sells for $250,000, she says.
Laus opened a preschool on the property in 1984, and, due to parents' requests, she later added a full-day kindergarten and a first grade. Now, the Atlantis Preparatory School is a state-approved education facility with 350 students from 2 years old through first grade. The school's mission is to grow future world leaders.
Laus also incorporated the Milagro Salon and Spa into both clubs, and they have become communities in and of themselves, she says. The two locations grossed $7.5 million last year with a profit margin of 20 percent. Both locations combined to do $1.2 million in gift card sales during the last eight weeks of 2009.
The children's camps, which include a day camp, sports camps, adventure camps, the Atlantis Preparatory nursery camp and the Atlantic Club swim school, also have been a hit, especially in 2009 when the camps experienced their best year ever. Most days, the club had 1,000 kids on campus, grossing $1.37 million with a return of 40 percent. Laus credits fewer vacationing parents putting their children in the camps longer as part of the reason for the increase. Nonmembers can participate in the camps and sports-specific training, which helps market the club to potential members and expands the clubs into the community.
The two clubs have become an integral part of the communities that they serve, not just because of the ancillary services that nonmembers can participate in, but also because of the charitable work in which Laus, her staff and her members are involved.
Laus has volunteered for much of her life, and she brought that mindset to her business. Six years ago, she took a course in which she was asked what she could create that would make a difference in the world. At that time, she and others at the club knew several people who were diagnosed with and treated for breast cancer, so she created Clubs for the Cure to raise funds for breast cancer research. Eventually, she expanded that program to become a national fundraising campaign in partnership with health and fitness clubs across the country to raise money for amyotrophic lateral sclerosis (ALS) research.
Her charitable work and work with the community have earned her several awards. This year, IHRSA presented her with the Outstanding Community Service award, which goes to an individual who has made a longstanding commitment to make a difference in, and beyond, his or her community. She also has received IHRSA's Distinguished Service Award for outstanding contributions to the growth of the health and fitness industry.
All of her contributions fit with her company's mission.
“The mission that guides me with the business is expanding wellness, extending life,” Laus says. “It gives everyone something to go back to and refer to. We do know that connectivity is something that needs to be encouraged.”
She strives for her club to be a place that develops relationships between staff and members, between members and members, and between the club and the community because people who have connections are healthier, she says.
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The company is using social networking — Twitter, Facebook, e-mails and its Web site — to become an information source and to connect members and the community to each other and to the clubs.
Using these technologies to fulfill her mission is a far cry from the early days when communication was via phone, and back office systems meant using paper and a pencil. Of course, much of what The Atlantic Club is today is a far cry from what Laus walked into back in 1983. Along the way, she admits that things haven't always been easy and she hasn't always been confident, but that doesn't seem to matter to her anymore.
“I'm OK with my journey,” Laus says. “The choices I made were the best choices I could make at the time. I'm responsible for all my choices, and I look to create a great future.”
That great future might involve a few more Atlantic Clubs, although she says that she doesn't have the wiring to be the CEO of 200 clubs.
“I really do live within the dream that there will be more Atlantic Clubs in my lifetime,” Laus says. She likes the idea of transferring the vision, values and brand to another club and another community.
Even if she doesn't reach that goal, her journey so far shows others that a lot is possible when you have vision, determination, some luck, and knowledgeable and dedicated people beside you.
“The business is where it is supposed to be right now,” Laus says. “It's healthy, it's profitable, it's a great example of what a club can be in a community. It's underpinnings are good values, doing the right thing, doing your best and treating people the way you want to be treated.”
For interviews with other executives in the fitness industry, visit the Executive Insights section of the Web site at www.clubindustry.com/executive.