When starting your own business in any industry (and especially in the fitness space) you should always begin with the end in the back of your mind. That also just so happens to be one of the main points discussed in author Stephen Covey’s “Seven Habits of Highly Effective People”.
Even if you are a mature club owner and have been in the industry for years or new to the fitness industry, knowing how you want to end up will steer you in the right direction when making important long-term decisions for your club.
DO NOT skimp when it comes to taking the time to understand your end game, as you can never be too over-prepared!
It’s is not too late to understand that your original vision may have changed thus you may not of thought about an exit strategy to begin with.
How do I get started with a small business plan?
Sit down and let yourself dream, what do you want from this club? From your life?
Picture yourself at retirement or semi-retirement.
a) Is it an investment?
If so, are you looking to build this business up to prepare for a deal in order to fund a retirement? Or maybe your next project?
b) Are you looking for recurring passive income? Something so you can maintain a mostly hands off approach?
c) Is this something that you want to hand off to children or other family members when you pass?
d) Is it a livelihood? – Something you never want to retire from? Something you enjoy doing and want to be involved in day-to-day?
- Once you answer those questions keeping in mind what is right for your business/family, keep reminding yourself of it daily, hang a quote on the wall, recite your exit strategy every morning, etc. This will help you make the right decisions during the tough times- and we all know THERE WILL be tough times!
- Make sure you have a plan for each approach, and make the right decisions along the journey:
a) Livelihood – Are you paying yourself enough? If this is a livelihood, then it should be able to pay for the lifestyle you choose to live. This question should not be asked during your startup phase. Do not pull so much money out that you are affecting the ability of the club to do business, but also make sure that you are not living paycheck to paycheck. If the club cannot support your lifestyle and it’s more painful rather than pleasurable, then your exit strategy must change or your business must change. – The biggest hurdle here is to know what to spend money on and learn how to skimp in places that will not hurt member retention and new sales.
obtain software that can keep you ahead of the game, continually upgrade equipment and build out multiple profit centers.b) Investment – Are you building an attractive club or chain of clubs? I mean attractive to potential buyers. In this strategy you put most of the money back into your club, hire a designer,
Keep in mind you always want to invest in the club, even at the expense of your salary. Revenue is king when selling a company. That is not to say that profit is not important, but it is much easier to generate profit as you approach the time when you want to exit than it would be to generate revenue.
ii. Hire the right people and take yourself out of the day-day
iii. Have total visibility into your club even when you are not there. (club management and accounting software are key here)
- Re-evaluate regularly
Don’t forget, if you plan to hand this off to your children a good mix of all the items above will ensure that you are providing them a profitable, exciting business and not a headache.
Lastly, this is a long process that requires assistance. You cannot create this plan in a bubble. Talk to family, friends in the industry and other possible advisors. It is important that you know what you want out of life before approaching an exit strategy for your business.
Dean is a Senior Sales Consultant at Jonas Fitness who brings 10+ years of sports, health and fitness industry experience along with over 20 years in the information technology field. This unique background along with being a former Gold’s Gym franchisee owner gives him first hand experience in assisting club owners to implement technologies and software that will increase profitability, help eliminate stress and increase work-life balance.