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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 04-27-2011, 07:12 AM   #1
Ron Murray
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your biggest unexpected/unforeseen cost?

I am in the process of gathering data, building a checklist for opening and I know SOMETHING will pop up. What one (or few) thing(s) came out of left field for you when you got the ball rolling?

It's inevitable that something will pop up, I have a feeling a city/county/permit/license issue is going to arise, but so far the RE broker seems confident in everything.
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Old 04-27-2011, 07:53 AM   #2
Matt DeMinico
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Re: your biggest unexpected/unforeseen cost?

The water bill. Honestly. And the story on why is going to tell you what will cause your biggest unforseen expense.

Though not the *biggest*, it was the "biggest gap between expected and actual". Owing to what you mentioned about the city's "we can do whatever we want to do because we be in power" stuff. Here's why:

- We rent two parts of a multi-part building. Each side has its own water meter, so we have two water meters.
- The city decided that every water meter will pay for a minimum of 10 units of water every billing cycle. We use 1 unit of water every billing cycle, and pay for 10. On *two* meters. So we're paying for 20 units every billing cycle.
- A normal water bill goes out every 3 months. The city, in their infinite wisdom, decided to bill residential normal, but bill commercial every single month.
- This means that we get a bill, for 20 units of water, which costs roughly $100, every... single... month. We're *using* about $5 worth of water every month, maybe.

So, in short, *this* is what is going to cause your biggest expense. City/township/state/federal/whatever governments will do *whatever they can get away with*. If city council can raise an extra $150,000 revenue for them to spend by changing some rule that costs every business extra money (while getting nothing of value in return), and it won't get them voted out of office, they *will* do it.

This means things like random permits. $1500 zoning appeals fees. $1000 special use exemption permit fees. $500+ Certificate of Occupancy fees.

And it's not just limited to things that'll make them money. Does your parking lot not have "enough spaces" for what they call your use class? Need to apply for an exemption, and they require a drawing? "Ok" you think, just whip out your old copy of CAD and draw the rectangle with some yellow stripes on it. Noooooo... no siree... can't do that. They will require an architect to do the drawing. "Ok, my brother-in-law has an architectural degree, he can do it". Think again... Not just *any* architect, but a "licensed architect". One with an expensive stamp. That architects time costs money. A lot of money (remember the stamp he had to pay a lot of money to get from the State?). In order to even break even, he will charge you $2000 to come to your site, look at the parking lot, measure it, go back, and put the stripes on the drawing. Then he'll stamp it, and give it to you "certified". He did a good job, you thank him, and move on.

Now you take your stamped documents to City Hall (or the Township offices, or whatever), and you fill out a form for a Zoning Board of Appeals request. Then they say "Ok, would you like to pay the $1500 ZBA fee in check or cash?"

So, now, $3500 (minimum) later, the ZBA looks at your piece of paper with an expensive stamp on it and says "Yep, them's stripes", and depending on their whims of whether THEY feel there's enough businesses in your area doing similar things, or whether THEY feel you may be disruptive to your neighbors (in your little standalone building), they *MAY* or may not approve your request. If they don't, you're out $3500. If they do, you're STILL out $3500.

And this is just to get the approval to get a variance on having enough PARKING SPACES! Nevermind the fact that if you're not in their "use class" for their zoning laws, you have to go through another whole process ($1000 use class application fee, plus $500 special use exemption for gyms in most cities).

Now assuming you've made it through that, you better pray your bathrooms are handicap accessible, because if they're not, when the building changes occupants, you have to update it to the most recent code (almost always).

Would you like showers for your clients? Nuh-uh... that may put you into a different use case category again (maybe the "gymnasium" category, vs the "personal training" or something you were able to convince them you were for your special-use permit), which has different parking space requirements, different occupancy requirements, etc.

Now, wouldn't it be nice to put up a little sign on the front of the building so that people know who you are, and they can check out this CrossFit thing they've been hearing about? Yeah! That'd be great! Ask Tommy Luna over at Stay Strong CrossFit about putting up a sign... I won't ruin it for you, but suffice it to say, it involves multi-thousand dollar sign permit fees, not even counting the cost of the sign.

Now, if you're anything like we were when we considered moving into an empty space (now empty for 3 years because we DIDN'T go in there due to the absurd regulations and fees and such), you will be roughly $10,000+ in the hole, BEFORE you even spend a DIME on providing a service to your clients, or purchasing equipment so they can work out.

So, in short, here's my advice: Start in your garage, don't tell the city anything. Don't ask their permission, don't say "I'm thinking of"... nothing. As far as they're concerned, what you do has no effect on them, as long as you're not a dick to your neighbors and ****ing them off by parking on their lawn or something stupid. Keep class sizes roughly to the # of cars you can fit in your driveway and/or maybe a few cars on the street (if that's allowed in your area). Grow by word of mouth at first, get some good guys, save up some dough, and then rent a dirt cheap spot in an ***INDUSTRIAL AREA***.

Regulations in an industrial area are far less stringent. You'll still probably want to rip the nuts off of the city inspector at some point, but it'll be much less painful than going into a commercial space. Ideally, if you can find industrial space on a main road, then a sign out front will be much more effective than if you're stuck in an industrial side street. But regardless, stick to industrial, and grow the thing.
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Old 04-27-2011, 09:19 AM   #3
Ron Murray
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Re: your biggest unexpected/unforeseen cost?

wow, yea that is pretty horrible. Thanks for sharing that. I am crossing my fingers something of that nature doesn't happen.
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Old 04-27-2011, 10:05 AM   #4
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Re: your biggest unexpected/overseen cost?

I'm glad I don't live in Michigan. Typical Gov't - whether it be city, county, state, feds = rules and regulations, hidden ways of making money.

First, DO NOT TAKE OUT ADVERTISING !!! A good sign, word of mouth, facebook, etc are excellent, cheap ways of advertising. Unfortunately, I didn't listen to my own advice and will be eating the cost for another 8 months

The cost of employees can be high if you pay them - taxes, unemployment, etc - which means getting a second party to do pay roll (since I didn't start a business to do payroll crap).
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Old 04-27-2011, 10:32 AM   #5
Justin McGinley
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Re: your biggest unexpected/overseen cost?

Check the Zoning laws before you sign a lease.

We dropped a good $3500 on a zoning variance, and we were very lucky it was that cheap. Had the wording of my lease been different, it would have required another $2500+ in lawyer fees.

The whole process delayed our opening by months. So add in 2 months of wasted rent.

Also, the build out cost about $4500 more than expected.

Fun times.
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Old 04-27-2011, 10:48 AM   #6
Steve Loeding
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Re: your biggest unexpected/overseen cost?

definately check zoning laws / maps

In Minneapolis, we have access to zoning maps and what is / is not permitted, so that's very useful.

Stick to light industrial - generally you'll be ok - variences can be expensive and tricky to get.

Plus, it's just cool to be in a warehouse with dock doors, brick walls, and high ceilings - something primal about it.
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Old 04-27-2011, 10:53 AM   #7
Chris Walls
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Re: your biggest unexpected/overseen cost?

Zoning also depends on how you describe your business. I was covered under the zoning for multi-use light industrial as "participant recreation services". Had I gone with "Gym" or something not so much...
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Old 04-27-2011, 06:24 PM   #8
Ron Murray
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Re: your biggest unexpected/overseen cost?

Quote:
Originally Posted by Steve Loeding View Post
First, DO NOT TAKE OUT ADVERTISING !!! A good sign, word of mouth, facebook, etc are excellent, cheap ways of advertising. Unfortunately, I didn't listen to my own advice and will be eating the cost for another 8 months
I hadn't planned on anything outside of shirts, NICE 4x6 postcards, NICE business cards a few directional signs to my location and the social media aspect. The only reason I'm doing the 4x6's is I have a connection for HQ printing and I figure it wont hurt.

Quote:
Originally Posted by Steve Loeding View Post
The cost of employees can be high if you pay them - taxes, unemployment, etc - which means getting a second party to do pay roll (since I didn't start a business to do payroll crap).
will only be myself and another owner, and I think I can handle the payroll, I planned on ZenPlanner and I think there is a way to handle this there.


Quote:
Originally Posted by Justin McGinley View Post
Check the Zoning laws before you sign a lease.

We dropped a good $3500 on a zoning variance, and we were very lucky it was that cheap. Had the wording of my lease been different, it would have required another $2500+ in lawyer fees.

The whole process delayed our opening by months. So add in 2 months of wasted rent.

Also, the build out cost about $4500 more than expected.

Fun times.
Quote:
Originally Posted by Steve Loeding View Post
definately check zoning laws / maps

In Minneapolis, we have access to zoning maps and what is / is not permitted, so that's very useful.

Stick to light industrial - generally you'll be ok - variences can be expensive and tricky to get.

Plus, it's just cool to be in a warehouse with dock doors, brick walls, and high ceilings - something primal about it.
Quote:
Originally Posted by Chris Walls View Post
Zoning also depends on how you describe your business. I was covered under the zoning for multi-use light industrial as "participant recreation services". Had I gone with "Gym" or something not so much...
my broker and I are checking into zoning this week.

thanks for the replies, really helps to see this kind of stuff.
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Old 04-28-2011, 06:20 AM   #9
Randy Tarasevich
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Re: your biggest unexpected/overseen cost?

Signage caught me way off guard. It's expensive if you want it to look nice and professional.
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Old 04-28-2011, 07:57 AM   #10
Sam Robin
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Re: your biggest unexpected/overseen cost?

Yep, permits.

Luckily the mother of one of our trainers is an architect, so that has saved us thousands of dollars. So far each agency (water, sanitation, building and safety) has tried to charge us mucho cash. Water started at $1400 dollars just to pay for changing the use of the warehouse we are moving in to, but somehow I got it down to $0. Sanitation, however, wants us to pay $3500 dollars.

I hadn't planned for any of these costs when I was doing our numbers. You live and learn I guess.
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