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Equipment Outfitting a serious gym. Vendors & suppliers. Devices & equipment

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Old 10-10-2013, 02:07 PM   #1
Nichole Fisher
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Funding a Franchise or Equipment

Does CrossFit provide any resources or suggestions for gaining additional working capital to purchase a gym or necessary equipment? What has your experience been like trying to raise the funds you need? Thank you!
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Old 10-10-2013, 04:54 PM   #2
Lance Neumeyer
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Re: Funding a Franchise or Equipment

You'll get more of the right people giving you advice if you post this in the "running a crossfit facility" area
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Old 10-10-2013, 05:16 PM   #3
Greg Spaight
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Re: Funding a Franchise or Equipment

I gotta guess there's a reason that Rogue and others offer financed gym packages...
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Old 10-11-2013, 03:30 AM   #4
Steve Jaeger
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Re: Funding a Franchise or Equipment

Quote:
Originally Posted by Nichole Fisher View Post
Does CrossFit provide any resources or suggestions for gaining additional working capital to purchase a gym or necessary equipment? What has your experience been like trying to raise the funds you need? Thank you!
Hi Nichole -

Some gym owners sell 'founding member' memberships at discounted rates before their gym opens. Those memberships are usually one year or more in length.

Others offer lifetime memberships upfront [I'm not a huge advocate of this approach - but some have found success with it]

Still others turn to Project Funding Websites - indiegogo, kickstarter, etc...

I can't say for certain how successful everyone is with these methods, but they are possibilities.

Hope that helps.
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Old 10-13-2013, 12:02 PM   #5
Jon Hanover
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Re: Funding a Franchise or Equipment

most major cf suppliers offer financing for larger orders... over 1k for example... rogue, rep fitness, af, etc.

Also, wherever you do your business banking, they have people there that can help. Apply to a few different and see who gives you the best deal.
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Old 10-14-2013, 07:50 AM   #6
Chris Aitken
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Re: Funding a Franchise or Equipment

Hi Nichole,

We just opened on October 1st, so I went through this recently. My wife and I searched out many options for financing including small business loans/personal loans.

We went to 13 different banks with a comprehensive small business package (biz plan, projections, demographics, etc) and we were shot down 13 times. It wasn't for lack of credit either. The response from almost everyone was very similar: "You're not a small business, you're a micro-business, and we won't make enough money off of you to give you a loan." On the personal loan side, they basically wouldn't loan money for a business; simple as that. It was very frustrating.

Between the two of us, we had a good amount of money saved up, but not enough to fund everything that needed funding (space, licensing, affiliation, equipment, insurance). We used our savings plus our credit cards to get the ball rolling initially. We also used the site www.crowdit.com to put up a donations page which let people functionally pre-buy memberships from one month to lifetime at good discounts. This is the same thing as a founder's club, but it gives you a neat platform to use to solicit the money from people. We set our goal at $20,000 and managed to raise about $5,000 on that site. Outside of the site we also pre-sold several memberships/class packages, and received $3,000 in donations from family. Overall, we managed to open by spending about $10,000 on credit cards, and about $6,000 in cash, which includes the CF Affiliation fee and two months rent at our location.

Our initial projections had placed start-up costs at around $32,000, so the fact that we cut that in half taught me a very good lesson: just because it's on the Wish List doesn't mean it should be on the Must Have List. Trim the budget glut until you get to where you NEED to be, and then over time work up to where you WANT to be.

We used Again Faster for a $4,800 equipment purchase, but we didn't finance it as our credit cards have really great interest rates. We also did a lot of build out on our own. Our pull-up rig, for instance, is a custom project using Kee Klamps and Schedule 40 pipe that was half the cost of a Rogue rig (or similar). I located a local gym equipment re-seller on Craigslist who gave me a great deal on Oly bars and plates (>50% off new price and in good condition), which was supplemented by the AF order (kettlebells, medicine balls, boxes, 1 rower, etc). We needed 20 rubber mats (4' x 6') to cover our start-up lifting area and the pull-up rig area, which we sourced from a local Tractor Supply Co. This saved us the $150 shipping cost that a lot of places charge for the mats, as well as saving us about $7 per mat on purchase price. All of that cost about $7,000 total.

We've found that the equipment we have from just those purchases can be stretched to 13 athletes in a class without issues, and if we have 5-6 in a class we are quite comfortable.

My advice is to explore every single funding option you can think of, and then see how viable it is for YOUR situation. These different avenues may be perfect for you (e.g. we used credit cards, savings, and donations, in that order) and some may not work at all (damn you, bank loan people!). I would say make a list of all the options that you can think of, or that someone suggests, and then start looking at the logistics behind each option.

Example (this isn't me/us, just the kind of list we made):

Option - Notes:
Credit Cards - Limit $4,000; current usage $1,000
Day Job - Income $3,000/month, expenses $1,500/month
Savings - 401k = $7,500; Bank = $3,500
Loans - credit score = 683; might be a little low
Family - Uncle Bob is rich and likes me; call him
Clients - Currently training 5 people out of garage; will pre-buy @ $100 each
Partner - Jerry (current client) has seed capital of $10,000 and wants 50% ownership

It can be as simple as that. Start doing the math, making calls, and fleshing out your information until you have a plan.

Hope that helps!

Chris
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Old 02-13-2014, 08:44 PM   #7
Frank Foehrenbach
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Re: Funding a Franchise or Equipment

I looked that Rogue financing which is done through a company called Lease Process. They do something called Lease-to-Own where you are paying to lease the equipment. They own the equipment during the lease, but you own it at the end. The terms depend on your credit rating, but even with a good credit rating, I found much cheaper ways to finance the equipment. You also cannot pay it off early without a penalty I believe. This really seems to only be the way to go if you have no other option.

I have been approached by two other financing companies and would love to hear what other people's experience with them are. The two companies are Strada Capital (www.StradaCapital.com) and Ascentium Capital (www.ascentiumCapital.com). They both contacted me as a new affiliate.

I have heard that Strada does not directly provide the financing but instead they "pre-approve" you, then have you send them 1st and last months while they shop around for financing. If they can't find you financing below what they pre-approve you for, they will raise the terms from what you were pre-approved for and if you decide you no longer want financing, they take hundreds of dollars from the money you already sent as a cancellation fee. Has anyone experienced this?
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