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Running a CrossFit Facility Tips and guidance on how to open and operate a CrossFit gym.

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Old 05-10-2011, 10:17 PM   #1
Jason B Cox
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New affiliate predicament, advice on how to proceed please?

I am, with my partner, starting a new affiliate. We have both been coaching for about a year - me at a martial arts/mma school, him at a boxing club.

The boxing club has allowed us about 500 sq feet to use for CrossFit for free, as log as we teach the kids of the boxing club CrossFit - mainly teenagers. We have the basics - bars and bumpers, some kb's. one rower, and a pullup station for 5 people. Some squat racks as well.

The boxing club is a non profit, and has kind of a tenuous relationship with their space. They could be out on the street at any moment because their space is up for sale ( they have been gifted rent in-kind). I don't think it will actually sell any time soon, but it prevents us from making any investment in the space.

Free rent is great - but the downside is that, as the club is basically run as a free, nonprofit drop-in center, they don't take care of their space particularly well. So we are constantly tidying, cleaning the toilet, and chasing unsupervised children out of our area. The club is packed for our prime times at 530 and 630pm and is very loud and chaotic - not at all what you'd want for a new client or a Foundations class. None of those things will change - the club's structure is very poor and will remain so.

My question is, whats the best way to build from here? I am concerned that if i put forth serious marketing effort, i will actually turn off a lot of potential clients because the space is not at all what I'd want. They'll see it and just bolt, or never come back for day 2. We are also charging a substantially lower price in light of the space for the 10 or so paying clients we do have (I've got 6 other affiliates in my town, some of which are very, very good) so bringing in clients, unless there is a ton of them, isn't going to get us out of there nay time soon. We're also going to be maxed out on space soon.

We haven't put much effort into marketing, because I'm conflicted. I feel like I'd have to work 3 times as hard to get a few clients in paying half price, based on the space we have.

My partner and I would both like to quit our day jobs when possible but no one is under any fantasies about when that will happen.

My options, as I see them, are :
1. Put my effort into building a clientele, hope it works, and move to a bigger space when we can, knowing we might get the boot at any time.
2. Bite the bullet and borrow money to rent a nicer facility in order to charge the price that I want and land the clients I want (and be competitive with the other boxes in town). In this scenario I tend to lean toward the more expensive higher foot and car traffic retail/mixed use space that gets a lot of people in the door/buzz. I Have seen it work very well first hand in this town.
3. Try and find some other space to partner with and get out of this one. Ultimately this is a short term fix, but maybe a good one.

I just kinda feel like the landscape of affiliates has changed somewhat. While it may have been possible in the past to open up in a garage or a park, I am not sure you can do that anymore, based on the competition. Like I said, i have 6 affiliates in my town, some of which are awesome. I understand that great coaching is the foundation of the business, these days I think you have to be pretty sharp in business as well.

I 've also been reading the LaunchBoxRx stuff and I find that what they have to say makes a lot of sense as far as not moving your box 3 times in the first few years and eating the buildout over and over. They advocate getting more of the space you want initially.

I appreciate the help very much. I really feel stuck here.
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Old 05-10-2011, 11:05 PM   #2
Katherine Derbyshire
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Re: New affiliate predicament, advice on how to proceed please?

Free is free, but 500 square feet? I'll bet you can get a garage or a storage unit that size for not all that much money and far less hassle. Which also may not be the ideal space, but it will at least give you a starting point to build from. From your description, what you have has all the disadvantages of a garage space, but none of the advantages.

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Old 05-11-2011, 02:15 AM   #3
Steve Loeding
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Re: New affiliate predicament, advice on how to proceed please?

WOW - I'm in the same situation !!! Except I don't have to teach CrossFit to people for free, I pay rent - but everything else is exactly the same experience I'm going through - I'd love to hear advice on this. It's like I'm the guy sleeping on the couch, If I'm not in the way, they are.

And it's not easy finding 500 sq ft of space, btw. Plus, zoning laws make anything a pain in the rear.
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Old 05-11-2011, 07:30 AM   #4
Troy Peterson
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Re: New affiliate predicament, advice on how to proceed please?

The size of the space shouldn't necessitate the rates you charge....should be quality of your coaching. If you're letting the size of the space drive the bus here with your business decision, you're doing it wrong.

What's wrong as Katherine said with starting out small? Of your options, I think #1 is probably best. Low cost (free rent), you can get started right away. If the other negatives of the place outweigh the positives....find a new small garage/storage facility/sublease opportunity. With the current economy it is a buyers market when it comes to space. And people might be more willing to get creative (sublease, shared space) these days.

You're in a city that's generally pretty active. Just make sure you market to people who can actually pay for training...not sure the boxing club will provide many leads. Nor will maybe some younger kids who are taking MMA classes and already paying for those.
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Old 05-11-2011, 12:46 PM   #5
Krista Fudge
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Re: New affiliate predicament, advice on how to proceed please?

You're not paying rent and you're worried about cleaning toilets? I pay rent and I STILL clean the toilets. It's just part of the job....
I think the free rent will come with some hassles, just deal with them. Can you use the 500 sq ft of space as storage and do your WODs outside? (This will give more space, and solve the problem of unattended kids running around). If not...why not just workout in a park? That's free too.

My advice is to start as low cost as possible. We started in a park. We dealt with the same problems you're talking about - more work marketing for fewer clients...but we still grew. The right people came. And after only 6 months of being in a box we're consistently growing and maintain a positive cash flow. I'm so glad we didn't invest tons of money in tons of equipment and buildout costs.

Good luck with your decision.
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Old 05-11-2011, 01:34 PM   #6
Mauricio Leal
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Re: New affiliate predicament, advice on how to proceed please?

Quote:
Originally Posted by Jason B Cox View Post
My partner and I would both like to quit our day jobs when possible but no one is under any fantasies about when that will happen.

My options, as I see them, are :
1. Put my effort into building a clientele, hope it works, and move to a bigger space when we can, knowing we might get the boot at any time.
2. Bite the bullet and borrow money to rent a nicer facility in order to charge the price that I want and land the clients I want (and be competitive with the other boxes in town). In this scenario I tend to lean toward the more expensive higher foot and car traffic retail/mixed use space that gets a lot of people in the door/buzz. I Have seen it work very well first hand in this town.
3. Try and find some other space to partner with and get out of this one. Ultimately this is a short term fix, but maybe a good one.

I just kinda feel like the landscape of affiliates has changed somewhat. While it may have been possible in the past to open up in a garage or a park, I am not sure you can do that anymore, based on the competition. Like I said, i have 6 affiliates in my town, some of which are awesome. I understand that great coaching is the foundation of the business, these days I think you have to be pretty sharp in business as well.

I 've also been reading the LaunchBoxRx stuff and I find that what they have to say makes a lot of sense as far as not moving your box 3 times in the first few years and eating the buildout over and over. They advocate getting more of the space you want initially.

I appreciate the help very much. I really feel stuck here.
Your options, paraphrased:

1) Take the least amount of financial risk, but suffer logistical pains.
2) Take the most amount of financial risk, but suffer no logistical pains.
3) Take some unknown amount of financial risk, but suffer unknown logistical pains.

Take heart, you're not alone. But I think the question boils down to things mostly unrelated to the apparent choices though, such as:

1) How confident are you in your abilities as coaches?
2) How serious are you both about seeing this through to success?

If your answers to either of those two questions are less than "very," consider doing the financially safer but painful thing, and wait until the answer is "very." When that is the case, then ask yourself the questions:

3) Ok, I'm ready, but am I being a complete financial idiot by not weighing the risks and rewards appropriately?
4) Do I have enough money in the bank so I'm not totally screwed personally if something I probably can't even anticipate causes this thing to fail?

This is the time to get a third party/pro to come in and evaluate your business plan, or to at least take a very sober look at your monthly inflows and outflows. It is possible to make it happen on some debt and crossing your fingers that you can bring people in the door (while actually hauling *** to do so), but you're not likely to get a public/professional endorsement of such a plan. You wanna be an entrepreneur, aye?

If you're confident in your abilities, relentless in your dedication to making the business successful, and can at least reasonably justify the decision financially, you won't regret taking a leap, even if it ultimately fails (it won't ).

I'm in a similar situation but am basically saving money and building clientele until the financial parts make more sense. Patience is a virtue also!
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Old 05-14-2011, 04:22 PM   #7
Brendan McNamar
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Re: New affiliate predicament, advice on how to proceed please?

First rule of business: Don't go broke.

To expand a little this really means: Don't run out of cash to pay the bills, both business and personal.

The problem with debt is not the debt it is the monthly payment which is required to service the debt. This applies to any reoccurring bill like rent, utilities, insurance and payroll.

If you have good day jobs I really like the:

work two jobs
pay cash for equipment
build client base
secure desirable location
then and only then consider quitting day job when you have a better understanding of your cash flow

I'm starting to look for a commercial space. I will only need to buy/build my pull up bar structure and enough flooring to cover the whole gym when I move. I have built up a good inventory of equipment over the last year so I won't have to buy more equipment at the same time as I'm moving.

I am a fan of the facility dedicated to CrossFit alone, even if it is small. I just think it adds to the professionalism. My garage gym is clean, organized and dedicated 100% to CrossFit.
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Old 05-15-2011, 05:56 PM   #8
Rachel Wise
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Re: New affiliate predicament, advice on how to proceed please?

totally agree with Brendan on this one.

Start small and outgrow where you are at, then move on.
Bigger is not always better.

My partner and I started our gym in our back shed, worked a "day job" each as well as training clients and put the money we made through training, straight back into the business (buying equip etc).
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Old 05-16-2011, 09:49 AM   #9
Jason B Cox
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Re: New affiliate predicament, advice on how to proceed please?

Thanks for the guidance. Maybe just getting a little big for my britches. I'll do what I can to make the facility work until it won't work.

Thanks for the advice, all. Extremely helpful.
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