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-   -   5 Dos and Donts when setting up your affiliate - Your thoughts? (http://board.crossfit.com/showthread.php?t=81650)

Matthew Whittemore 04-22-2013 04:00 PM

5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Hi guys,

I'm in the process of setting up a new box,(affiliation application pending) and thanks to 16 years in the Army I have a near obsession with being as properly organised and prepared for tasks as possible prior to starting them.

What I would like some input from the forum on is if you were to start from scratch again, knowing what you know now about how your setup went, what would be your top 5 Do's and Dont's on setting up (Obviously covering everything from painting, flooring, fitout, apparel, legal....whatever you found to be stand outs).

Cheers!

James Gordon 04-23-2013 01:36 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Hi Matthew,

I've opened 3 affiliates, and probably made every mistake there is :shrug: Here's my list:

DO:
1- Keep your overhead as low as possible. Operate in as small of a space as you can get away with (you would be surprised at what you can do with a small space if it's planned properly). Only move to a larger space when you absolutely have to. If you are in a nice climate, find a space that will allow for outdoor WODs.
2- Celebrate your member's success EVERY DAY. PR boards are better than Leaderboards. Praise members on FB and your web site at every opportunity.
3- Use a management system (like Zen Planner) from day one, and set up all memberships with monthly auto debit.
4- LOVE your members, your business is nothing without them. People quit gyms, but they never quit a good relationship.
5- Be the best Coach you can be, and constantly look for ways to improve. Find a mentor. Take advantage of the free resources on sites like The Biz, 321Go Project and Again Faster.

Don't:
1- Don't get in a race to the bottom with other boxes. Charge top $$ and avoid pre-paid or pay-as-you-go membership options. They will KILL your cash flow.
2- Avoid borrowing money to start your box if at all possible.
3- You don't need every piece of gear out there. Start with the basics, and be creative with your programming. Add gear when your membership can pay for it.
4- Don't spread yourself too thin. If you offer every class time under the sun, you'll quickly burn out. Set a reasonable schedule, but keep time for yourself. Farm out jobs that you aren't good at or cause you stress (accounting, cleaning etc). However, do as much of the training as possible until you can comfortably afford help, and make sure that adding extra trainers results in a corresponding increase in revenue.
5- Don't forget to have fun. Frequent special events, free seminars, competitions etc are key. Don't take the whole thing too seriously.

My third box (sold the other two in Canada and moved to Europe) is very different from my first two. We're in just over 1500sf TOTAL space, and run classes of up to 10ppl. My overhead (all in) is under $2000 monthly, and my average client value is around $150/ month. I've set a limit on memberships at 100 (paying monthly). I can manage 100 clients myself, and I'll develop two additional "apprentice" trainers to cover while I'm on holiday or sick. This will give me a take-home salary of $10000 monthly (before taxes) with approx $3000 monthly as savings. With automated systems and farming out some admin tasks, my work week is about 15hrs of coaching and 6-8hrs of admin (programming, web site/ FB etc). I stay at home with my kids during the day (saving a ****-load in daycare fees!) and run evening classes only.

Best of luck with your new venture. Feel free to PM me any time if you have questions etc. :welcome:

James Gordon
CrossFit Schaffhausen

Dario Delkic 04-23-2013 08:53 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Thanks for your post James, this is great.

Luke Conner 04-23-2013 02:36 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by James Gordon (Post 1160181)
Hi Matthew,


My third box (sold the other two in Canada and moved to Europe) is very different from my first two. We're in just over 1500sf TOTAL space, and run classes of up to 10ppl. My overhead (all in) is under $2000 monthly, and my average client value is around $150/ month. I've set a limit on memberships at 100 (paying monthly). I can manage 100 clients myself, and I'll develop two additional "apprentice" trainers to cover while I'm on holiday or sick. This will give me a take-home salary of $10000 monthly (before taxes) with approx $3000 monthly as savings. With automated systems and farming out some admin tasks, my work week is about 15hrs of coaching and 6-8hrs of admin (programming, web site/ FB etc). I stay at home with my kids during the day (saving a ****-load in daycare fees!) and run evening classes only.

I think the majority of what you said is excellent advice. I don't get your numbers here though. If you cap your classes at 10 and have 100 clients you would have to run 10 classes a day or assume that on any day 50% of your people won't show up. You also said 15 hours per week of coaching, but that would mean you're only running three to four classes a day, which would mean only 30 - 40% show up a day.

James Gordon 04-24-2013 12:28 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Hi Luke,

I currently offer 2x/ week, 3x/ week and unlimited memberships. The vast majority (85%) of my members are 2x/ week. If you factor in people who are on hold (illness, travel etc), I can easily accommodate 100 athletes per week.

Of course, this is my current "model" (open 4 months). If things change and more people opt for more classes per week, I would have to add class times and/or increase the class limit.

Best,

James

Matthew Whittemore 04-24-2013 06:40 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Thanks for your input James, some really good advice there. I've emailed you at your info address.

Luke Conner 04-24-2013 10:37 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by James Gordon (Post 1160472)
Hi Luke,

I currently offer 2x/ week, 3x/ week and unlimited memberships. The vast majority (85%) of my members are 2x/ week. If you factor in people who are on hold (illness, travel etc), I can easily accommodate 100 athletes per week.

Of course, this is my current "model" (open 4 months). If things change and more people opt for more classes per week, I would have to add class times and/or increase the class limit.

Best,

James

Ok, that makes a lot more sense. That's a great place to be at, very impressive.

Chris Chalmers 04-25-2013 08:35 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
I agree with James, We have been working with a fair few boxes in Australia and UK fixing existing issues and setting up from start. The biggest thing we come across is Coaches who love CF open up their own affiliate and think they can run a business. Its 2 separate things. The love of coaching soon wanes when bills need to be paid and the time is stretched. Our advice is to get bullet proof simple easy to follow admin systems so it allows you to spend all your time coaching and building a community. Do one thing and do it well.

Eric G Taylor 04-26-2013 11:31 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
im very glad i came across this post. im also in the process of opening an affiliate and become more and more nervous about what it will take to open my doors and offer the best classes i can. i currently am attempting to run classes out of my garage right now but have no idea how to market myself. i make posts on craigslist and have had a few hits but no one has showed up yet. i dont know i hope it all pans out because I would like this to be my job when i get out the army next year.

Ryan Cole 04-27-2013 03:40 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by James Gordon (Post 1160181)
Hi Matthew,

I've opened 3 affiliates, and probably made every mistake there is :shrug: Here's my list:

DO:
1- Keep your overhead as low as possible. Operate in as small of a space as you can get away with (you would be surprised at what you can do with a small space if it's planned properly). Only move to a larger space when you absolutely have to. If you are in a nice climate, find a space that will allow for outdoor WODs.
2- Celebrate your member's success EVERY DAY. PR boards are better than Leaderboards. Praise members on FB and your web site at every opportunity.
3- Use a management system (like Zen Planner) from day one, and set up all memberships with monthly auto debit.
4- LOVE your members, your business is nothing without them. People quit gyms, but they never quit a good relationship.
5- Be the best Coach you can be, and constantly look for ways to improve. Find a mentor. Take advantage of the free resources on sites like The Biz, 321Go Project and Again Faster.

Don't:
1- Don't get in a race to the bottom with other boxes. Charge top $$ and avoid pre-paid or pay-as-you-go membership options. They will KILL your cash flow.
2- Avoid borrowing money to start your box if at all possible.
3- You don't need every piece of gear out there. Start with the basics, and be creative with your programming. Add gear when your membership can pay for it.
4- Don't spread yourself too thin. If you offer every class time under the sun, you'll quickly burn out. Set a reasonable schedule, but keep time for yourself. Farm out jobs that you aren't good at or cause you stress (accounting, cleaning etc). However, do as much of the training as possible until you can comfortably afford help, and make sure that adding extra trainers results in a corresponding increase in revenue.
5- Don't forget to have fun. Frequent special events, free seminars, competitions etc are key. Don't take the whole thing too seriously.

My third box (sold the other two in Canada and moved to Europe) is very different from my first two. We're in just over 1500sf TOTAL space, and run classes of up to 10ppl. My overhead (all in) is under $2000 monthly, and my average client value is around $150/ month. I've set a limit on memberships at 100 (paying monthly). I can manage 100 clients myself, and I'll develop two additional "apprentice" trainers to cover while I'm on holiday or sick. This will give me a take-home salary of $10000 monthly (before taxes) with approx $3000 monthly as savings. With automated systems and farming out some admin tasks, my work week is about 15hrs of coaching and 6-8hrs of admin (programming, web site/ FB etc). I stay at home with my kids during the day (saving a ****-load in daycare fees!) and run evening classes only.

Best of luck with your new venture. Feel free to PM me any time if you have questions etc. :welcome:

James Gordon
CrossFit Schaffhausen

Awesome advice James . Question: how did prepay and pay as u go options hurt u?

Chris Jones 04-27-2013 10:05 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Ryan Cole (Post 1161421)
Awesome advice James . Question: how did prepay and pay as u go options hurt u?

curious to this as well. If the people pay for months up front, and then cant make classes from time to time or just dont show i dont see how thats a problem :shrug: Obviously you want repeat business, but its not for everyone and youre still getting the money right? Also sometimes peoples jobs/goals/priorities just change for whatever reason, so they may have to bail on a gym membership at some point and are afraid to pay for a 12 month period at a time.

James Gordon 04-28-2013 04:31 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Ryan Cole (Post 1161421)
Awesome advice James . Question: how did prepay and pay as u go options hurt u?

Two words: CASH FLOW.

Although it may be nice initially to get a chunk of cash up front, what happens after that? In order to have a stable and predictable business, you need to have a good idea of how much revenue to expect each month to cover overhead, labor etc. Unless you manage your cash extremely well (many small business owners don't), you could be left short. For example, if I have 100 clients, and 90 of them are paying me monthly, I can easily predict my cash flow (average client value x 90) for the next 30 days. If I have 100 members, but 40 of them are pre-paid, my cash flow is a lot lower each month.

Pay-as-you-go cards do have their place, but only occasionally. I don't offer them or advertise them anywhere, but I have used them with clients who travel frequently for work and wouldn't get fair value out of a monthly fee. However, this is the exception and not the rule.

This has just been MY experience, not saying it's right or wrong. However, as soon as I switched from pay-as-you-go to monthly automatic billing, my business was WAY more profitable and my stress level dropped significantly :kicking0:

Best of luck to all on their new venture!

James

James Gordon 04-28-2013 04:52 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Chris Jones (Post 1161453)
curious to this as well. If the people pay for months up front, and then cant make classes from time to time or just dont show i dont see how thats a problem :shrug: Obviously you want repeat business, but its not for everyone and youre still getting the money right? Also sometimes peoples jobs/goals/priorities just change for whatever reason, so they may have to bail on a gym membership at some point and are afraid to pay for a 12 month period at a time.

I'm not sure if I follow your logic here. If people pay up front and then don't show, that's a HUGE problem (IMO). It means you're not doing you job as a Coach. That may be the globo-gym model, but it's not how I run my business.

I offer month-to-month memberships with automatic billing and a 30 day cancellation policy. That means that if I'm not giving my clients what they are paying me for, they can walk at any time. That's a huge motivation for me to provide an excellent product month after month.

If a client pre pays, and then something happens and they REALLY don't want to be in your gym anymore, do you really want them there? If a client is miserable and is only coming because he/ she has pre-paid, it will tarnish their relationship with you, your staff and the other members. It can create a toxic environment and adversely affect your business.

What if a client gets divorced and doesn't want to be at the same gym as her husband (who was sleeping with another member)? Does she get a refund? What if a client gets offered a job in another city 4 months after he paid you for a year in advance? Does he get a refund? These situations DO come up, and you either have to cut some big checks, or come off looking like a greedy ****** to your other members.

Best,

James

Nathan Holmes 04-28-2013 09:08 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
James,

A local box has a similar, and very successful, approach. Clients agree to monthly auto-payments for various amounts of time (I think it's 6, 9, and 12 months) with a 30-day cancellation requirement. The longer clients agree to auto-pay, the cheaper their rate is. When their "contract" period is up, they are subject to the new rates (if the rates have changed). The combination of the lower rate + longer price guarantee leads clients to sign on for longer but maintains that focus on quality from the owner's perspective. The box is one of the most successful in our area. They also have awesome trainers and a great facility...so that helps.

-Nate

Brendan McNamar 04-28-2013 11:17 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Every gym reflects its owner's personality. This almost always means there is room for improvement doing things that don't come naturally to the owner. My back ground before CrossFit was accounting, finical planning/Investment management and relatively high stake poker. I'm long on planning and analytical thinking short (but improving fast) on people skills and fun. So here are things I have learned (usually by not doing them at first and learning):

Do's:
1) Build a brand that your members can join. If you get it right they want to be known as a member of CrossFit whatever. This is the whole package: Website, logos, car stickers, building, coaching, programing. It is your way of doing things. The better you do this the more successful you will be. Make no mistake this takes hard work and long hours. If you want a great example of this see CFNE.

2) Get your members interacting with each other. You can't do it all yourself. When we started to develop larger classes and better member interactions everyone had more fun and got better results. Attendance increased.

3) Focus on a great member experience before profits. Clearly you have to make sure you can pay the bills but paying to have extra coaches around to help out is a great investment in your brand not an expense to be minimized. Right around 50 members and our new location this became important. People walk in no matter how many times you ask them to make an appointment on your website. People come back to join at 6 PM on Monday night even though you warned them it is your busiest class of the week. It is our job to help our members not our members job to make our lives easy.

4) Suck it up and buy the best equipment you can afford from day one. Every time I try to save 10 or 20% not buying the best I regret it. Along the same idea is set part of every months budget to maintenance and repairs. As CrossFit gyms have been open longer I'm seeing more and more starting to look very tired. If you do one project a month you don't have to worry about a big bill all at once or someone opening a shinny new gym close to you.

5) A picture is worth more then a 1000 words. Buy a good DSLR camera and take lots of pictures of your members in action. I bought a Cannon T3 for about $400 to replace a small hand held. May be the best $400 I have ever spent for the gym. High quality picture, big memory and long battery life. We take lots of pictures and discard any that don't make our members look great. We post albums to Facebook and these albums reach 3 times as many people as we have Facebook likes. People love pictures!

I'll be back with my 5 Don'ts.

P.S. My gym gets painted to match our branding next weekend.

Matthew Whittemore 04-28-2013 09:17 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Definitely agree with you James on the cash flow point, I've experienced both sides of that now with the current business I'm running.

Thanks for those points Brendan, I will have a look at your affiliate online now.

James Gordon 04-28-2013 11:20 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Nathan Holmes (Post 1161498)
James,

A local box has a similar, and very successful, approach. Clients agree to monthly auto-payments for various amounts of time (I think it's 6, 9, and 12 months) with a 30-day cancellation requirement. The longer clients agree to auto-pay, the cheaper their rate is. When their "contract" period is up, they are subject to the new rates (if the rates have changed). The combination of the lower rate + longer price guarantee leads clients to sign on for longer but maintains that focus on quality from the owner's perspective. The box is one of the most successful in our area. They also have awesome trainers and a great facility...so that helps.

-Nate

Hey Nate,

That's the exact model I used at my former affiliate (3/6/12 month contracts). However, I don't see how a contract works if there is a 30 day cancellation policy (as in your example). Do they also charge a cancellation fee?

I'm only commenting because I ran into this problem in the past. A client signs a 12 month contract and enjoys the lowest rate. They then leave after 4 months (work, schedule etc, relocation etc). Should they have to pay the difference in rates?

James

James Gordon 04-28-2013 11:21 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Brendan McNamar (Post 1161527)
Every gym reflects its owner's personality. This almost always means there is room for improvement doing things that don't come naturally to the owner. My back ground before CrossFit was accounting, finical planning/Investment management and relatively high stake poker. I'm long on planning and analytical thinking short (but improving fast) on people skills and fun. So here are things I have learned (usually by not doing them at first and learning):

Do's:
1) Build a brand that your members can join. If you get it right they want to be known as a member of CrossFit whatever. This is the whole package: Website, logos, car stickers, building, coaching, programing. It is your way of doing things. The better you do this the more successful you will be. Make no mistake this takes hard work and long hours. If you want a great example of this see CFNE.

2) Get your members interacting with each other. You can't do it all yourself. When we started to develop larger classes and better member interactions everyone had more fun and got better results. Attendance increased.

3) Focus on a great member experience before profits. Clearly you have to make sure you can pay the bills but paying to have extra coaches around to help out is a great investment in your brand not an expense to be minimized. Right around 50 members and our new location this became important. People walk in no matter how many times you ask them to make an appointment on your website. People come back to join at 6 PM on Monday night even though you warned them it is your busiest class of the week. It is our job to help our members not our members job to make our lives easy.

4) Suck it up and buy the best equipment you can afford from day one. Every time I try to save 10 or 20% not buying the best I regret it. Along the same idea is set part of every months budget to maintenance and repairs. As CrossFit gyms have been open longer I'm seeing more and more starting to look very tired. If you do one project a month you don't have to worry about a big bill all at once or someone opening a shinny new gym close to you.

5) A picture is worth more then a 1000 words. Buy a good DSLR camera and take lots of pictures of your members in action. I bought a Cannon T3 for about $400 to replace a small hand held. May be the best $400 I have ever spent for the gym. High quality picture, big memory and long battery life. We take lots of pictures and discard any that don't make our members look great. We post albums to Facebook and these albums reach 3 times as many people as we have Facebook likes. People love pictures!

I'll be back with my 5 Don'ts.

P.S. My gym gets painted to match our branding next weekend.

Agree 100%. All excellent points.

Matteo Pagetti 05-02-2013 01:52 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Hi to all!

I'm following this thread 'cause I'm still work to open a Box in Italy, Milan area sooner.

I don't in shame affirming that I'm bit confused about members fee's and so on.
Let me explain better to you...
In Milan, as place where I want to open, there's 4 boxes already open, two of them Reebok branded (you can find them in affiliates map).
We are planning to set up our box in south area, where there's another, but is working with mini class and one to one, as a sort of personal studio, so no problem for each others...we plan to have our classes, the still remain with their clients.
BTW, the main task is the pricing, as following the thread.
You guys how much euros suggest to charge for an open month?
I think more or less around 120/130 euros, planning to reach 100 members in one year.
Do you think is higher?

thanks in advice!

Matteo

James Gordon 05-02-2013 02:54 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Matteo Pagetti (Post 1162525)
Hi to all!

I'm following this thread 'cause I'm still work to open a Box in Italy, Milan area sooner.

I don't in shame affirming that I'm bit confused about members fee's and so on.
Let me explain better to you...
In Milan, as place where I want to open, there's 4 boxes already open, two of them Reebok branded (you can find them in affiliates map).
We are planning to set up our box in south area, where there's another, but is working with mini class and one to one, as a sort of personal studio, so no problem for each others...we plan to have our classes, the still remain with their clients.
BTW, the main task is the pricing, as following the thread.
You guys how much euros suggest to charge for an open month?
I think more or less around 120/130 euros, planning to reach 100 members in one year.
Do you think is higher?

thanks in advice!

Matteo

Hi Matteo,

Instead of guessing at what your monthly rate should be, start by deciding what you want to earn as a trainer/ box owner. From there, work backwards to get your monthly rate.

Example: To live the kind of life that you want, you need to take in $100 000 per year (just using round numbers). Next, figure out your overhead expenses (include EVERYTHING; rent, utilities, insurance, staffing, bank fees, affiliate fees, management system, savings for future equipment, web site, toilet paper....) and add that to your $100k. For argument, let's say it's $50k, so you would need to bring in $150k to meet your goal of $100k take home.

$150000/ 12 months = $12500 monthly. If your goal is to run a small studio with 100 members, they would need to AVERAGE $125 monthly to reach your goal income.

Obviously, this is a simple exercise, but it gives you a starting point. If your market won't support the monthly fee, you need to change the model to meet your income goal. Increase the number of clients, or lower overhead. Also, this is all pre-tax. You would need to factor in the tax situation for your area.

Good luck!

James

Jason M Struck 05-02-2013 06:19 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
I have made trades with professional photographers and website designers.

this plus facebook and groupon have pretty much entirely made my marketing plan.

systems!

replace yourself!

have rules. stick to them.

LOVE.

LOVE.

LOVE.

Matteo Pagetti 05-02-2013 11:03 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by James Gordon (Post 1162526)
Hi Matteo,

Instead of guessing at what your monthly rate should be, start by deciding what you want to earn as a trainer/ box owner. From there, work backwards to get your monthly rate.

Example: To live the kind of life that you want, you need to take in $100 000 per year (just using round numbers). Next, figure out your overhead expenses (include EVERYTHING; rent, utilities, insurance, staffing, bank fees, affiliate fees, management system, savings for future equipment, web site, toilet paper....) and add that to your $100k. For argument, let's say it's $50k, so you would need to bring in $150k to meet your goal of $100k take home.

$150000/ 12 months = $12500 monthly. If your goal is to run a small studio with 100 members, they would need to AVERAGE $125 monthly to reach your goal income.

Obviously, this is a simple exercise, but it gives you a starting point. If your market won't support the monthly fee, you need to change the model to meet your income goal. Increase the number of clients, or lower overhead. Also, this is all pre-tax. You would need to factor in the tax situation for your area.

Good luck!

James


Hi James and thanks for the reply!
yep, the numbers you mentioned are the same that are in my mind.
the main problem here is the monthly rent for the location...I've found 200 square meters and per year is about 20k.
BUT, our goal is not to reach huge numbers in members, but an higher level of service (teaching, facility, class sizes, no rebound of members...)
I've over 2 year of experience/frequentation in other boxes and the main problem is there...
We don't have a large amount of budget to choose directly a more larger place, but the one we choose is in a strategical zone, as mentioned...nearest the fashion district, showrooms, offices, a large park in front of the structure, schools and swim pool...
we don't want to play with globe gyms, because we know that our service is, let me say, exactly an another world...excellence, for give it a name.
so, I assume that my open monthly fee is around 120/130 euros.
spot on classes granted (we plan to use zen planner to manage this) and no rebound on the door, no wait for barbells and so on...
the main problem for us is to make understanding this model to the customers.

thanks again for your reply and suggestions are welcome!

Matteo

Adam Morden 05-07-2013 03:38 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Here's a few more - I agree with the posts by James and Brendan
Do:
1) Create a culture/brand that reflects what you love and want to work out in. If you're hyper competitive - build a competitive gym with a competitive culture, if you're more the hippy chill out man kinda person, make a more chilled out environment. it comes down to being authentic - people can smell a fake from a mile away.
2) Offer a variety of membership options. Not everyone wants to CF 3 on 1 off, some (many) people prefer to train 2 or 3 x a week - give them that option.
3) Build your website as a way to attract new clients, and make sure it fits your market and clientele. IE if your market is primarily older professionals getting back in shape don't put up a black website with skulls and death metal playing =)
4) Focus on keeping the clients you have rather than on getting new ones all the time. Adding just 2 clients a week will give you more than 100 at the end of your first year if they all stay. Some affiliates near me loose over 10 per month. Treat people right, and focus on THEIR goals and be their friend.
5) Offer specialty classes, but only if you're passionate about them. For example, I love boxing and have done it for years, so we also have some boxing classes at my box, but I don't like dancing so I won't add zumba =) People love variety - and I've added a ton of members because I offer more options of what to do than other boxes in the area

Don't:
1) teach early in the morning, mid day, and at night (a triple split) it will mess you up and you'll burn out and do a poor job of coaching, anything more than 1 split in a day tends to be really hard on the schedule.
2) partner with people if you can avoid it. It can work, I've tried a bunch of options, but it's always easier with 1 person calling the shots. You are better to hire a trainer than partner with another person. lots of friendships have been lost to business partnerships failing
3) sleep with clients - I can't believe how often this happens in the fitness industry. It will cause a ton of ill will and problems no matter how well you think it will turn out. (I'm sure there is an exception, but they are rare)
4) "build it and they will come" do your research first and know who your potential clients and market are.
5) Ignore Personal Training. PT is a very lucrative way to start your business and improve your coaching skills. Even in established gyms there is the potential to increase average client value and gross revenues by adding personal training options.

Matthew Whittemore 05-08-2013 02:48 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Thanks for your input Adam, really appreciate it. It's all getting closer now, warehouse is just awaiting equipment and the green light email from CrossFit HQ!

Justin Okeson 05-17-2013 08:15 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
James,
Excellent post. I am conducting a feasibility analysis right now and I am wondering what your (or anyone else please) thoughts/experience is/are on the following items:

1) Is it better to lease equipment than to buy outright when first starting out
2) What is your customer attrition rate (what % of customers do you loose each month)?
3) What are your best marketing strategies, and your thoughts on groupon/living social strategies?
4) Does consumer demand justify offering different membership options (two days a week vs. unlimited)?

Thanks a lot for everyone's thoughts and responses!
Semper Fi

Adam Morden 05-18-2013 06:02 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Justin Okeson (Post 1165969)
James,
Excellent post. I am conducting a feasibility analysis right now and I am wondering what your (or anyone else please) thoughts/experience is/are on the following items:

1) Is it better to lease equipment than to buy outright when first starting out
2) What is your customer attrition rate (what % of customers do you loose each month)?
3) What are your best marketing strategies, and your thoughts on groupon/living social strategies?
4) Does consumer demand justify offering different membership options (two days a week vs. unlimited)?

Thanks a lot for everyone's thoughts and responses!
Semper Fi

1) I think it is better to start off small enough that leasing wouldn't be needed, I've started 3 affiliates and the equipment cost to start of the most expensive was only $11,000 and it opened with about 45 members - Pre-selling your services so you have money in the bank on opening day is super helpful.
2) I've seen this vary tremendously by gym and time of year, as well as the culture you create and foster in the box. We'll have months go by with no cancellations, then at the end of the school year we might loose 5-10 members who are moving away after graduating. Annually we average about 5-6% churn.
3) groupon can be great or it can put you out of business - I've seen it do both to affiliates around here. I'll write a longer post about it later on. Our best marketing has always been member word of mouth. and like Skip Chase used to always say - talk to people about your affiliate everyday - I try to give out 5 business cards each day to someone I haven't talked to about the gym before.
4)Definitely we offer 1,2 3, and unlimited options - it increases average client value while not forcing your clients to pay for more services than they plan on using. We don't do punchcards for the most part

Brian Strump 05-19-2013 12:07 PM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by Justin Okeson (Post 1165969)
James,
Excellent post. I am conducting a feasibility analysis right now and I am wondering what your (or anyone else please) thoughts/experience is/are on the following items:

1) Is it better to lease equipment than to buy outright when first starting out
2) What is your customer attrition rate (what % of customers do you loose each month)?
3) What are your best marketing strategies, and your thoughts on groupon/living social strategies?
4) Does consumer demand justify offering different membership options (two days a week vs. unlimited)?

Thanks a lot for everyone's thoughts and responses!
Semper Fi

1. I would start with what you can afford. If it's nothing, then it's time to start saving. Do you mean financing? Not leasing? I know some companies offer equipment financing. I think that could be an option for some.
2. I agree with Adam. Some months we'll have 1-2, other times 8-12. On average, I'd say 5-6%.
3. We have never done either. I've heard good and bad stories. If there were a time to do it, it would be when you just open the doors. If you have 75+ members, I can see how an influx of 100-200 new members(for a month, that don't see the value) would be difficult to handle, especially if you are not prepared for it(more coaches available, and increased class times)
4. We offer unlimited and the punch card on our website. We have always done it that way, and it's worked well for us. If a CURRENT member asks me about a lesser option, I'll work with each on an individual basis. Currently, that's 4 members of 200.

Erin Hamilton 06-15-2013 05:21 AM

Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?
 
Quote:

Originally Posted by James Gordon (Post 1162526)
Hi Matteo,

Instead of guessing at what your monthly rate should be, start by deciding what you want to earn as a trainer/ box owner. From there, work backwards to get your monthly rate.

Example: To live the kind of life that you want, you need to take in $100 000 per year (just using round numbers). Next, figure out your overhead expenses (include EVERYTHING; rent, utilities, insurance, staffing, bank fees, affiliate fees, management system, savings for future equipment, web site, toilet paper....) and add that to your $100k. For argument, let's say it's $50k, so you would need to bring in $150k to meet your goal of $100k take home.

$150000/ 12 months = $12500 monthly. If your goal is to run a small studio with 100 members, they would need to AVERAGE $125 monthly to reach your goal income.

Obviously, this is a simple exercise, but it gives you a starting point. If your market won't support the monthly fee, you need to change the model to meet your income goal. Increase the number of clients, or lower overhead. Also, this is all pre-tax. You would need to factor in the tax situation for your area.

Good luck!

James



Hi James!

Thank you for this quote. I am working on opening up a gym with my husband and this has been the most helpful post I have read so far! I appreciate your and everyone's thoughts. I think the community between affiliates, coaches and members is one of the biggest thing that makes Crossfit so great!
Erin


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