Episode Summary
Are you a fitness pro who wants to own your own fitness business? In this episode, Rick and Matt present what it takes to open your own fitness business and whether or not you should go it alone or buy into an Alloy franchise.
Episode Notes
Many fitness professionals such as coaches and instructors have the ambition of transitioning to being a gym owner. However, they do not know how to go about it. They do not k ow where to start. In this episode, we look at the steps they have to take to successfully transition to being a fitness entrepreneur.
The first step is having a business plan. Many entrepreneurs start their businesses without one which leads to failure. A business plan should be built around your vision. To have an effective business plan, you have to simplify your vision. Determine precisely what kind of service you want to offer and build your business right from the start.
Securing capital to start the business is a big deal. However, many business professionals underestimate the amount of capital needed to open a new business and building a brand. You can get this money from your own savings, friends, and family, or a bank.
However, for a bank to give you money, they have to see a solid business plan. If you cant come up with this, a franchise would be a better option since all the details are taken care of. A fitness franchise is like a massive shortcut. You don’t have to make the same mistakes entrepreneurs who came before you made. The system is already well developed.
Listen in to hear more of this and other steps you need to take in your journey from a fitness professional to a fitness entrepreneur
Key Takeaways
- How can a fitness professional transition to being a fitness entrepreneur (04:16)
- Why having a business plan is the first step to starting your fitness entrepreneurship journey (05:04)
- Simplification of your vision and your business plan is a core value in business (07:38)
- Finding and securing enough capital to start and run your business (10:36)
- Why getting hold of a franchise is better if you cant come up with a solid business plan (13:46)
- Being part of a fitness franchise is like a shortcut. You avoid making the same mistakes (20:25)
- Looking at the end game of your fitness business and planning your exit strategy (25:02)
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Mentioned in this episode
Alloy Personal Training Franchise
Today we’re going to talk about the kind of fitness professionals kind of journey to become entrepreneurs and open their own business.
I speak on the perform a better circuit, as you know, which is typically more coaches and trainers and some entrepreneurs. There are a lot of questions from fitness pros about how to become entrepreneurs like I want to open my own gym. Where do I need to start?
Today we’re going to look at how a fitness professional would relevantly or in the correct way make a transition from fitness Pro, instructor to a business owner. We will cover the steps that you have to take.
Step number one
The actual business plan.
If you’ll recall, Matt had Tim Fulton, who’s my business coach on the podcast about five successful keys to a startup. Number one was to have a business plan.
A study that Tim quoted from the Small Business Association stated that less than 20% of all people that want to open a business even have a business plan at all. Coincidentally or not, so coincidentally, I think it makes sense to both of us that – that same metric Just under 20% is the number of businesses that make it through five years plan.
If you have no plan, how do you expect to survive? I think it would have to be by sheer luck. When I talk about building a business plan, the next question that I get is, how would I build a business plan? Let’s talk a little bit about the things that are in a business plan.
First and foremost
Define what your business structure is. What do you foresee your business offering as a service? This is very important, let’s use basic examples. One would be, I’m going to be a boot camp style business. We would call that team training 20 to 30 people getting sweaty, that’s what I want to do. That’s what I like to coach. The reason you need to clearly define this is that that’s going to dictate the space, the equipment choices, and everything else from here on out.
If you just say, hey, I want to open a fitness business, but I don’t know what I want to do, you’re going to really struggle. So first and foremost, you have to have a vision for what is your business going to look like. Second, you start to build a plan around that.
Simplification is one of our core values. It’s also one of the more difficult things to do in business, but it’s one of the most important things to do.
I would challenge you as a fitness professional, that’s moving into entrepreneurship, you have to simplify, you have to make that decision. That’s tough to do. Once you decide your business structure that then dictates your square footage. Now we’re starting to move into more of the financial realm. This is where you decide where are you going to put it? What are the demographics going to be if you are a boot camp business, the price threshold is going to be a bit less. Your average income would need to be a bit less. How many square feet do you need?
What is the build-out need to look like? Those things also dictate you know a lot about your square footage, but more so about the budget. The numbers are the part that most fit pros suffer from the most, they have a hard time understanding all the different metrics.
I know I make it sound like it’s going to be impossible to do. I just would like for people to understand it’s not easy. If it was, everyone would do it. There’s a lot of fit pros out there who think I’ll just start a mom and pop garage gym, I won’t go through any of these other processes, and I’m going to be fine. If you look at the statistics that we just talked about, without that solid business plan, you’re going to be in the minority if you make it to five years.
What I see most often is fitness pros underestimate the amount of capital that it’s going to take or revenues or funds so to speak, to open a new business. They just don’t fully put all that together. Part of that is operating capital as well. So you might be able to scrounge up enough money to be able to open the fitness business but if you don’t have marketing money set aside, and you don’t have operating expenses you won’t make it. If you don’t know how to do it, you’re going to want to find someone who can help you build a business plan.
Now, that is the beauty of franchising. Certainly what we offer as a franchise is all of the stuff we just discussed. It is all already done for you. If I was a fitness professional in the industry right now and I was a really good practitioner and I knew that I could drive amazing customer experience to make people really happy unless I just had a burning desire to prove to myself that I could do it on my own and beat the 80% odds.
I would buy all of the weaknesses in my game, right if I didn’t have a business plan buy something that has a business plan. I didn’t know what equipment I needed, buy. Find a franchise, if you like personal training and you like to be a technical coach, and you looked at Alloy as a fitness franchise, you’d say, Oh, this is perfect.
I get to use all of my knowledge as high-level coaching, from my strength conditioning days, pare that down, I’ll see how they deliver this to regular adults in a meaningful way. Guess what, I’m going to get an equipment list that is super detailed, I’m going to get the exact floor plan I need, I’m going to get the demographics done and get four or five choices of where I can move into a facility that makes sense based on what I’m trying to do. I’m going to get a build-out allowance and I’m going to know how much operating capital, I’ll know what my marketing spend is going to be and I know how to spend that money on marketing. All of these metrics are just things that are massive shortcuts and could be the difference between sink or swim.
A franchise is going to give you that detailed business plan. If you’re going to friends and family, they’re going to want to know that you have some plan of attack. Those are two sources. Before you can bank finance, you can go to friends and family and borrow money. Most fitness pros that I know have some liquidity but not enough to open a fitness business and run it nine months during a ramp-up. Another one is clients, that always seems to be a great source of funding for going right.
I had a client that believed in it. And I had this vision for a place that just did personal training as a dedicated facility. No one had it at the time. We built it and made some mistakes, which I know we’re going to touch on in this talk today. Not having these business systems. But being first was good. We were well funded. And we just again, we just got lucky for lack of better terms. We worked hard, but we also got really lucky.
If you’re looking for funding, which you’re going to need, you’re going to need a budget and a detailed business plan or no one’s going to mess with you anyway, they’re not going to take you seriously. Then you’re going to sit down with someone and say, here’s the plan of attack. This is exactly what I need as an investment. I will tell you that if you don’t have that, you’re not going to have savvy business, friends, or clients that are going to invest in your business. It may sound like I’m pumping franchise and there are so many positives now that I’ve seen both sides of it. Completely forget about the fact that we’re selling a fitness franchise, I would tell you that investors are looking for that first and foremost.
They want to know that there is a system powering this thing that is greater than the one individual that they’re partnered with. There’s much more value if the business is in a franchise structure because the buyer is going to think the same thing that the investor is thinking initially, which is this has a lot more value because it’s a duplicatable system. It’s scalable, I can do multiple locations, or I can buy these 10 regional locations. While they have a good management structure in place, more importantly, there’s something else driving it, there’s a bigger brand behind it that’s driving this thing.
That being said, if you’re a fitness pro, who’s like, hey, I want to do my own thing, if you don’t come up with a super solid tight business plan on your own, you’re going to be better off just grabbing a hold of a franchise, and then you’re going to attract eyeballs from better potential investors, even if you know them already.
We’re selling a franchise so we look at things through that lens quite a bit. But this is relevant information for any fitness pro that wants to make that transition. You can go out and on your own, the percentage changes don’t love you. If you just want to shortcut the whole thing and find a relevant investor that can help you out. Personally, I would do an Alloy franchise that’s just me.
Any of you guys that are fitness pros will at least give you a better idea of what it takes to transition from fit pro to entrepreneur. If you want to hear more about it reach out to us but in all seriousness, man it’s a big ocean. There’s tons of room for everyone to be successful so I welcome any relevant players in the market whether they’re with Alloy or not.