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-   -   How much money? (https://board.crossfit.com/showthread.php?t=70115)

Dwayne Reagan 09-09-2011 04:48 PM

How much money?
 
How much money should I have saved up before putting in an application to be an Affiliate. I alread know about the 3k for the affiliate fee, and 1000 for cert. But for equipment you need and should I have savings for the lease till there is enough people coming to the gym to pay the bills? Would greatly appreciate anyone who is already an Affiliate's advice on how they did it maybe.

Richard Teutsch 09-09-2011 07:42 PM

Re: How much money?
 
Check out some of the Mic'd Instructor videos from Jon Gilson at Again Faster. Should give you an idea of how to figure out what the costs will be in addition to the affiliation fees.

[url]http://www.againfaster.com/the-micd-instructor/?currentPage=7[/url]
(wfs)

Ian Nigh 09-10-2011 05:12 AM

Re: How much money?
 
Have enough liquid capital to cover your set up and all of your operating expenses for at least 6 months until you become profitable.

Brendan McNamar 09-10-2011 11:19 AM

Re: How much money?
 
This depends on your cost structure. There are three kinds of cost:

1) One time start up - Certification, 1st years affiliation fee, website, 1st years insurance, securing a location and first equipment purchase.

2) Fixed ongoing expenses - rent, insurance after year 1, affiliation fee after year one, wages to trainers, utilities. Anything you have to pay month after month regardless of how many members you gym has.

3) Variable cost - these are cost that you incur as more people join your gym. Additional equipment purchases are significant. More space, higher insurance, higher utilities.

Start up cost are what you need to get the doors open. Small garage gym probably $7,000 to $10,000 if you are careful. Fully equipped 3,500 sq ft. box could be $30,000 plus.

Fixed cost determined how much cash you need to keep the doors open until your members can cover these cost. This is where people get into trouble. Got high fixed cost and you are going to burn cash fast. Have low fixed cost and you burn cash slow and it is much easier to turn the corner to positive cash flow.

Variable cost are the least concern because they only go up when your income goes up. If your pricing is correct you should alway be happy to add members and incur more variable cost because you will be spreading your fixed cost over more members.

Unless you are a well financed professional in the fitness industry this argues for two thing. 1) keep your day job 2) start small and humble out of your garage.

I did it this way and it saved my ***. Now a year later my growth rate is picking up. I'm getting referrals from my members and I'm starting to shop for more space and equipment. If my fixed cost had been higher I would have gone broke.

I will also second the Faster Again business videos. They will say much the same thing but in more detail.

Don't forget your personal fixed cost. My personal bills are higher then my gyms month to month bills. You are not truly running positive cash flow for life until you can cover both your gym's expenses and your personal expenses.

Justin McGinley 09-12-2011 10:54 AM

Re: How much money?
 
nevermind


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