As you might expect, the typical fitness franchise owner is passionate about fitness. He is not just a person who likes to stay in shape, but a true fan of exercise and spreading knowledge to get people in shape. To achieve this, a franchise is a relatively easy way to do it. However, there are a few things to consider before spending your money.
A franchisee generally benefits from the brand and business structure that the franchisor offers. With fitness franchises, this includes not only the marketing, sales plan, and operational structure, but also the actual design of the fitness program.
Oftentimes, franchisees are members of the gym (and therefore develop that passion for it!) And will be very familiar with the program, but the franchisor is generally responsible for evolving it and developing the necessary training materials.
The franchisor has also fixed the problems with the program, at least many of them, and has shown that the business model can work in at least certain circumstances. If you’re looking to get your own gym franchise, then it would be a wise decision to invest in the best gym management software to help with operations
Starting any business can be expensive. There is a lot of variability with best gym franchise depending on the type of equipment or supplies needed. A Bootcamp has a very different equipment inventory than a Sportium with cardio and weight equipment.
Important entry fees include:
- Payment of the franchise.
- Commercial Property: Rent or purchase of gym space.
- Remodeling of the space.
- Equipment: It is highly variable depending on the training model, but is generally a significant cost.
Financial keys to opening a gym
To open a gym, having healthy finances is essential; however, the safest thing is that doing numbers and presenting balances is not what you like most about the day, you are not the only one. That’s why we put together this compilation of financial tips for opening a gym.
Put together a business plan
Doing so can be tough and intimidating, but it is an integral part of any business that’s why if you are new to the business sector, a business broker from CGK Business Sales will help you with finances and legality. If you need cash to fund your business, an investor will need a business plan to make the decision to support you financially. In addition, the research that accompanies the business plan can end with incorrect expectations that have to do with the market, the geographical area, the type of clients, among other things. Discovering these errors during the planning phase allows you to make adjustments before making commitments and signing contracts.
Make realistic financial projections
Financial planning is an important part of your business plan. You have to anticipate costs, monthly expenses, and cash flows. Keep it real! Your financial projections will be only as good as the information on which you base them. It is a good idea to put together three different projections for three scenarios: the optimistic, the intermediate, and the pessimistic. Plan how you should run your business from pessimistic projection until things start to take off.
Hire an external professional
Opening a affordable franchises requires some technical knowledge. Things like negotiating the lease, establishing financial planning, and recording movements are complicated. Even if you lease space, setting up financial planning and record-keeping are difficult. Even if the income is not very high, outsourcing certain tasks to an outside professional, such as a lawyer and/or accountant, is a good idea. Small details overlooked in contract negotiations and accounting paperwork can be a long-term problem.
Build a financial foundation
Cash flow is the financial infrastructure of your gym. Try to develop a large enough user base to have a stable cash flow. Avoid promoting annuities or monthly memberships without a contractual obligation. These memberships do not allow you to project future income after a year or count on the monthly flow. For a new gym, this can be very risky and can make it difficult to receive enough income to cover expenses. Contracts are a way of guaranteeing a stable cash flow. Membership pricing and automatic payments are other key factors to consider when developing your user base and financial base.
Monitor your finances and learn to budget
Only through operational and financial metrics can you know if a gym is profitable. Understanding the numbers that affect income and expenses is a tool that can define the success of your gym. It will help you work smarter and will be key to measuring the performance of your business and to being able to compare it with your competition. Make sure to budget before incurring expenses. Also, you must define which expenses are important to keep your gym afloat and which are not.