Opening a small gym business

sunnybeaches105 wrote: »

I've advised a number of smallish businesses over the years, but never a gym. These are also internet generalities, are not intended as advice, and do not establish a relationship. Take the following with a grain of salt.

(1) Location is everything. Unless you're a destination business that people will flock to no matter where you are based on your reputation and skills, it is critical that you be located conveniently enough for your customers to easily access. Look at the area carefully. How many businesses have come and gone in the building you're looking at? Why? Is it easily accessible from the street? Plenty of parking? How many competitors are within 10-15 minutes of your location?
(2) Consider your customer base. Do your research. If you're a general gym then you want to be warm and welcoming to those new to fitness. If you're a hardcore gym, how many hard core types are around you and do you have the reputation to draw them in?
(3) Start small but with an eye to, and a plan for, expansion. You are starting a business you've never run in an area where you're not completely sure of the market. Leave room for flexibility. Don't commit to 50 brand new machines when 25 lightly used ones will do. Be open to customer suggestions. Listen to them but be sure of what they're really saying. Are the things they want something they'll actually pay for if you choose to invest more money? Will your landlord give you an option for addition space? Yes, landlord. Don't buy real estate unless you are also looking for real estate investment. If so, how much real estate experience do you really have?
(4) Consider your goals and bottom line. Get your ego out of the equation and think about your real goals. Are you in this for profit or because you think owning a gym would be cool? If the latter don't do do it. You need to be passionate to succeed but not so passionate that you don't pay attention to reality. You're not a tech start up that can win the "lottery" and be bought out by investors. You're entering a grinding business and every dollar counts.
(5) Speaking of which, most small businesses fail. That's reality. Gyms fail like restaurants fail. It's a tough business. Do not put more money at risk than you can afford to lose. Debt is dangerous at the beginning stages, consider equity investors but know that they will want to turn a profit and share control. Pick investors who share your vision. Also pick investors who compliment your skill set and fill in the gaps in your knowledge. Accountants, bankers, lawyers, etc.
(6) Speaking of advisors, do you have any? Pick ones who are recommended to you by people you trust. Firm name and reputation are not enough. You will ultimately be working with individuals and you want individuals who know what they're talking about.
(7) Consider a franchise but don't enter into any agreements without consulting with an attorney. Did I mention that gyms fail? I've outfitted my garage with several items from more than one failed gym. I've seen many more fail. Have you ever managed a gym? Maybe do that first?