With many businesses in the fitness industry positioned for growth, especially virtually, many people are looking for opportunities to purchase an existing fitness business.
In the wake of the coronavirus, an increasing number of fitness centers, studios, and gyms will be on the market.
Whether you’re an existing business or franchise owner looking to expand, or you're just starting out, any new owner will tell you that buying an existing fitness center, studio, or gym has a unique learning curve.
It's important to do your due diligence and understand the current landscape of the business (its services, financials, employees, and customers). That's why we partnered with Certified Business Broker and Mindbody Certified Consultant Mitch McGinley to give you a step-by-step plan.
Download this checklist to learn what you need to do to successfully purchase a fitness center, studio, or gym, including how to:
Find what's available on the market by establishing a relationship with a business broker (ideally in the fitness industry) or looking at reputable, online directories.
Examine the existing business situation by understanding the numbers, motivation for selling, revenue projections, the business's existing reputation and social media presence, and more.
Learn the financials by hiring a CPA to do a due diligence audit and review audited financials from the past few years. A well-versed CPA will help you factor in things like owner's salary, employee perks, depreciation, royalty fees, insurance, rent, and more. They'll also give you a clear understanding of what you’ll need to put into the business—not just start-up costs.
Evaluate your financing options, including options like Small Business Association (SBA) loans, Home Equity Line of Credit (HELOC), or seller financing. A financial advisor can help you determine what's the best option for you and the current market.
Evaluate the fitness business's physical and virtual spaces by reviewing the location and equipment, parking situation, and potential for foot traffic. Virtually, buyers should look for services like live streaming classes and on-demand workouts as well as a well-thought-out virtual business plan.
Get to know the customer base by understanding the demographics, retention rates, and membership offerings at the fitness center, studio, or gym (i.e., the cash flow from recurring revenue is great, but can you maintain current membership perks?).
Plan the path forward with your fitness business plan, with existing staff and customers in mind. Also, evaluating the future of the brand, which fitness software you'll use, and how you plan to communicate the transition as the fitness center's new owner.