CrossFit Discussion Board  

Go Back   CrossFit Discussion Board > Community > Running a CrossFit Facility
CrossFit Home Forum Site Rules CrossFit FAQ Search Today's Posts Mark Forums Read

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

Reply
 
Thread Tools
Old 12-05-2012, 07:41 PM   #11
Kenneth Cheung
Member Kenneth Cheung is offline
 
Profile:
Join Date: Aug 2012
Location: Shanghai  SH
Posts: 187
Re: Failed Boxes

maybe i'm being too 'commercial' with this statement so pls take it with a pinch of salt:



ultimately it comes down to maths. as a gym owner you're always going to be at the ransom of the landlord (i.e. who you're renting the space from), if you own the land then you're lucky, if not, then eventually your rent will raise... so you have the following 'levers' that you can adjust -
your salary
your profit
your staff cost (i.e. the number of staff, or the salary you pay them)
your equipment costs
your utilities costs
your insurance costs
your membership numbers and charges
etc.

once all those levers are 'maxed out' and you've got nothing left to make a saving on, you are in trouble.

i don't know about the situation in the USA or UK per-se but out here in asia landlords are ruthless...they not only charge you a fixed rent, but also charge 'turn-over rent' i.e. rent calculated based on your takings...if you fail to meet their targets, they'll kick you out and find another tenant.


i don't think setting up a crossfit gym is any different for any other business when you look at the business and finance aspect of it.

in fact the reason globo-gyms are so successful is very simple...every gym has a capacity, but if people pay a monthly fee for a fixed period and don't even turn up, you can inflate your takings and have 10 times the number of members that your gym has capacity for.

lastly businesses here are calculating their 'takings per square foot' as a means of calculating their profitability.
  Reply With Quote
Old 12-05-2012, 08:27 PM   #12
Brian Strump
Affiliate Brian Strump is offline
 
Brian Strump's Avatar
 
Profile:
Join Date: Sep 2009
Location: Charlotte  NC
Posts: 2,619
Re: Failed Boxes

That's unfortunate. Things are quite different in the US. The lease is a legal document.

Quote:
Originally Posted by Kenneth Cheung View Post
maybe i'm being too 'commercial' with this statement so pls take it with a pinch of salt:



ultimately it comes down to maths. as a gym owner you're always going to be at the ransom of the landlord (i.e. who you're renting the space from), if you own the land then you're lucky, if not, then eventually your rent will raise... so you have the following 'levers' that you can adjust -
your salary
your profit
your staff cost (i.e. the number of staff, or the salary you pay them)
your equipment costs
your utilities costs
your insurance costs
your membership numbers and charges
etc.

once all those levers are 'maxed out' and you've got nothing left to make a saving on, you are in trouble.

i don't know about the situation in the USA or UK per-se but out here in asia landlords are ruthless...they not only charge you a fixed rent, but also charge 'turn-over rent' i.e. rent calculated based on your takings...if you fail to meet their targets, they'll kick you out and find another tenant.


i don't think setting up a crossfit gym is any different for any other business when you look at the business and finance aspect of it.

in fact the reason globo-gyms are so successful is very simple...every gym has a capacity, but if people pay a monthly fee for a fixed period and don't even turn up, you can inflate your takings and have 10 times the number of members that your gym has capacity for.

lastly businesses here are calculating their 'takings per square foot' as a means of calculating their profitability.
__________________
Brian Strump, D.C., FMS, NKT
www.crossfitsteelecreek.com/
  Reply With Quote
Old 12-05-2012, 11:09 PM   #13
Mark Ritchie
Affiliate Mark Ritchie is offline
 
Mark Ritchie's Avatar
 
Profile:
Join Date: Sep 2010
Location: Chiang Mai  Thailand
Posts: 386
Re: Failed Boxes

Quote:
Originally Posted by Brian Strump View Post
That's unfortunate. Things are quite different in the US. The lease is a legal document.
Yeah, here in Thailand "legal document" doesn't really mean all that much either. Perhaps in some of the countries in Asia it does, but even with a really good attorney, it is the biggest hazard a gym owner faces unless you own the land (and in many cities in Asia, land is outrageously priced -- here in Chiang Mai undeveloped land in and around the city is going for $1-2 million per acre).

So I'd put that in your analysis -- even in the US -- of ways to fail. Make sure your lease is bullet proof and you've got the neighbors figured out. There are a lot of threads on here about noise complaints -- that could eventually sink you if you are forced to move more than once.
__________________
Mark Ritchie
CrossFit Chiang Mai (CFCNX)
  Reply With Quote
Old 12-06-2012, 02:11 AM   #14
Andrew Bolliger
Member Andrew Bolliger is offline
 
Andrew Bolliger's Avatar
 
Profile:
Join Date: Oct 2008
Location: Salem  OR
Posts: 100
Re: Failed Boxes

Well, I have seen a couple fail (as in close the doors because they don't make enough money to stay open). In all cases it was the result of a poorly managed business and probably not related to training or CrossFit abilities. Many people have said it, you need to be good at business and Crossfit, not one or the other. If you are new to business take some college courses and talk to other successful Crossfits, do the research on how to run a business before you open up. If you are not good with your money you will suck at managing the businesses money, get better at that. Tons of great resources such as stuff by Dave Ramsey , etc. Just some tips that I think will help.

One of the businesses that closed in my town was a globo gym that lost all the CrossFit trainers, albeit I think they were doomed from the start and never made a penny because they didn't understand CF and the community aspect. The other gyms that I know who struggled was because of consistency, if people pay for 30 days/month of service you better damn sure offer it every day at a high level with no surprises. I see affiliate owners cancelling classes on facebook the day before, ask yourself if you would want that... and pay a premium to show up with the doors locked. Manage your cash, don't get in a ton of debt, provide very high quality coaching, you will be a success in any definition. The 80 hours a week is right on though, I am 4 years in and I still work that much. However I could work zero and live comfortable, but how is an empire built like that .
__________________
Owner, CrossFit Salem (est. 2008)
www.crossfitsalem.net

Last edited by Andrew Bolliger : 12-06-2012 at 02:13 AM. Reason: spelling
  Reply With Quote
Old 12-06-2012, 11:15 PM   #15
Kenneth Cheung
Member Kenneth Cheung is offline
 
Profile:
Join Date: Aug 2012
Location: Shanghai  SH
Posts: 187
Re: Failed Boxes

Quote:
Originally Posted by Brian Strump View Post
That's unfortunate. Things are quite different in the US. The lease is a legal document.
technically out here it's a legal document, but that doesn't stop ppl from trying all sorts of dirty tricks...i'm sure even in the US you'll get some nasty characters (though doubtfully as bad as out here)

turnover rent is usually structured as part of the lease contract, so it's not a surprise, and the landlord is well within their rights to increase your fixed and turnover rental, as and when they see fit, though usually with a warning.

i guess the point i'm making is it's not as simple as walking into an estate agent, picking a place and setting up the next day, a commercial let is a whole other ball game with all sorts of fine print to be careful on. i'd guess that this would be true regardless of where you are in the world.
  Reply With Quote
Old 12-07-2012, 03:56 PM   #16
Chuck Swain
Affiliate Chuck Swain is offline
 
Profile:
Join Date: Apr 2012
Location: Mansfield  TX
Posts: 8
Re: Failed Boxes

Quote:
Originally Posted by Brian Strump View Post
Hardly. Do you know how many stupid people there are trying to open a business.

Over 90% fail....Give it time, and stats for CF affiliates will look similar.

Unless you consider working 80+hr weeks, and making $40k a success, then I think less are successful than you think. Certainly, at the start this may be typical; but I think you're about to see more and more burn out as soon as the owners realize this isn't how they expected running a business would be.

Alot of members does not equate to success if you are not making money.
Alot of class times " "
Selling alot of apparel " "
Being able to keep the doors open " "

You are in the people business, and you want to help people; however, in the end, no business is successful if it does not make enough money.

The amount of money is up to you, and perhaps the bank that you owe any money to.

I got into this business to help people. It's nice to get rewarded both emotionally, and financially for it.
Well said Brian, I believe that too many people believe that if you pay the $3K to put CrossFit on the name then it is just open the doors and cash the checks. The folks that are winning on this concept are the equipment suppliers!
I Absolutely love that CrossFit is an Affiliation not a Franchise but there are a lot of people who have little to no business understanding and they have bought an expensive hobby of training others.
  Reply With Quote
Old 12-07-2012, 04:05 PM   #17
Chuck Swain
Affiliate Chuck Swain is offline
 
Profile:
Join Date: Apr 2012
Location: Mansfield  TX
Posts: 8
Re: Failed Boxes

Quote:
Originally Posted by Nicholas Wickham View Post
Hi all,

I'm doing some research into opening my own box, I have found lots of good advice on set up and running a facility, but I would like to here from anyone that had a box and why it failed?
or if any one knows why a local box in there area failed.
No need to go into exact financial trouble but a rough list of things that went wrong would be helpful ie location, retaining athletes etc.....

Thanks Nick
Nick, I lived in Australia for a couple of years and I know it is a bit of a different game there. Cost for space and equipment is more expensive than in the US. Although the CrossFit community is vibrant and growing (I believe that about 5 boxes sprung out of CrossFit Norwest where I was a member) You will need to understand why you are doing it. If it is just money, you wont make it. You will need your unique niche what makes your box any different that the cheaper bloke down the street? Above all you must understand it as a business.
Otherwise you will be much better off buying equipment and doing the WODs in your garage with some friends (which by the way is a great way to prepare for the business) for a while.
If you have some more specific questions feel free to shoot me a note.
Chuck
Chuck@CrossFitFerVor.com
  Reply With Quote
Reply


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is Off
HTML code is Off
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Failed Clean Kurt Konodi Digital Coaching 15 12-18-2012 03:07 PM
Boxes/Jerk Boxes for sale. Steve C Martin Pukie's Bucket 0 12-03-2011 03:34 PM
Affiliates who have failed? Stephen Macioci Running a CrossFit Facility 41 06-24-2008 04:22 PM
Failed CPAT Nathan Donatelli Fitness 17 06-22-2008 08:00 PM


All times are GMT -7. The time now is 03:20 PM.


Powered by vBulletin® Version 3.6.8
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
CrossFit is a registered trademark of CrossFit Inc.