How to finance a gym?
Monkeys,
How can I get financing to open a boutique fitness studio / gym?
My passion for the past 10 years has been health and fitness and now I am looking to make it my career. I have seen individualsl open successful gyms but I am hesitant to ask them how they financed their gyms while I am still in the early planning stages. I am also in the process of becoming a licensed trainer for credential purposes.
For reference, my professional experience includes 2 years as an investment banking analyst (lev fin) and 5 years as a consultant. Undergrad finance degree from a state school and top 20 MBA.
For what its worth, banking bonuses largely went to paying off student debt, financing my wedding and buying a house. Just throwing this out there because I do not have the cash laying around to open a gym with my personal funds.
Any information would be greatly appreciated!
Start researching the costs of equipment, building (building location too as there are insurance costs to it), HVAC, insurance, taxes and licenses, employees. Come up with your business plan.
Very general brief on financing at a bank that you probably already knew: Determine your net worth and your cash flows, both now and while you'll open up the business. The bank want's to know if you can cover your payments, and if worst comes to worst, what assets they can collect on if you default. If you have sufficient cash flows and collateral with a sound business plan and a good market you should be able to pick up interest from a bank. Consider the possibility of partners who can be guarantors for your loan.
If you're looking for a less risky avenue, consider franchising from a boutique concept (barry's, OrangeTheory, SLT, Rumble boxing - pick your poison). I imagine you have formed an affinity towards a certain type given your passion for the industry. Of course, you're answering to the franchisor so maybe it's not entrepreneurial enough for you.
Rumble boxing seems to be pretty popular. They are opening up one in here in Chicago very soon.
I know someone that went from Orange Theory to opening his own place with investor funding, so that could be a path to get industry experience.
Just curious - what kind of gym did they end up opening? How did it turn out?
Thank you for the advice! I have looked into opening an F45 franchise but in conversations with the corporate office I learned that I may not be able to meet all the requirements, especially if I was looking to finance from sources other than family and friends. Rumble boxing looks super cool after look at their site.
You're stuck with SBA loan in your situation. Their interest rates are quite low though but you'll have to personally guarantee the debt.
Can you expand on what type of fitness studio you seek to open?
Why would someone want to come to your place versus a competitor?
I would love to open a CrossFit affiliate that also runs boot camp style classes (CrossFit without the barbells). I am based in a growing city with thriving suburbs and some of the more affluent areas (with a Whole Foods location, a lot of gyms piggy back off of whole foods locations because the target markets are nearly identical) do not have a CrossFit affiliate.
I have also considered trying my luck with a niche online training program and then look to finance a physical location with a track record of cash flows and some collateral. However, it seems every Instagram fitness personality has their own program now a days but it is probably worth a shot considering the low start up costs and scalability potential.
OrangeTheory has been exploding...also, 305 Fitness is doing well as a startup.
Why not pretend to be interested in opening a franchise with OrangeTheory and have them go over the startup costs....then decide if you want to go with them, or use the info to help you start your own.
Look into SBA loans.
This is senseless to me.
Why would you not ask someone that's running a successful gym how they got started?
Why learn shit the hard way when there's clearly people out there with the knowledge that you want and experience in the industry you want to enter?
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