Re: Sold small gym
Thanks for writing this post Brendan. It is constructive and informative to many people that share a similar situation. My box, and my story are almost identical except that I cannot find a buyer. I have moved 100miles away from my box for my relationship/family and have a fully staffed gym.
Our biggest obstacle to anyone purchasing my established, profitable box is the belief that they could do it cheaper and easier on their own.
CrossFit Palm Springs is defined through our coaching of small classes - limited to 10 - nutritional counseling, separate oly classes & workshops. We throw in a lot of bells and whistles with towels, water, & a lounge to round it out.
I pay my coaches more than any other box in the region. Having seen one coach walk with 20% of my membership to start their own box I made this a priority. It also has made them reluctant to organize themselves to take the risk of ownership themselves.
I evaluated my company initially as follows:
The depreciated value of the equipment + value of the 1 year contracts + cash assets ( inventory/deposits/savings )=$95K
The Box grosses $150K. Eventually I was in discussion with a buyer for $75K and I would finance half the purchase. We had legal counsel through the entire offering and negotiation.
I negotiated with 3 separate parties. One decided not to buy when they got word the first was opening up their own box in the region and the third thought it would be too much work. We have seen consistent growth despite the opening of, 3 new boxes within 5 miles. One is competing with a large facility and rock bottom membership fees. This has every new buyer concerned as a gym offering CrossFit at 50% your rates grows quickly.
I believe 100% in CrossFit but the business model is similar to that of a growth stock. I think your sale sounds smart, well timed and fortunate you got out before the market turned.