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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 06-17-2011, 08:01 AM   #11
Brian Strump
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Re: Who was successful in obtaining a small business loan?

FWIW, I put $5,000 in a business checking account, and bought my equipment with $10,000 in business credit cards. We were profitable after month 2. I slowly pay off the cc cards(the better the month, the more we pay). Unlike a loan, that amount is fixed for years.
We bought as we grew, at first it was hard to think why someone would choose us with other bigger, more established affiliates around, with more room and equipment. Start small, make your product special...give people the reason to choose you. Your training, a clean facility, find a training niche, etc.

15 months, and 115 active members.....and it's still stressful. It's your business, your life. The stress is what keeps your eyes on the road in front of you.
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Old 06-17-2011, 09:23 AM   #12
Masen Mills
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Re: Who was successful in obtaining a small business loan?

Wow! Great advice everyone! Thanks a lot. I think the large loan is kind of crazy...

Back to the drawing board... I'm lowering my equipment list down to about $20,000.... I can probably borrow that in a loan much easier, or find a couple of investors. That will get my overhead down to about $3000 a month (we also found an 1800 sq/ft facitlity for about $900 a month)....
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Old 06-17-2011, 09:25 AM   #13
Chris Cooper
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Re: Who was successful in obtaining a small business loan?

This is a GREAT post, Jason! Is your Box your only job? If you're surviving on 30 members, I'd really like to hear more. Would you think about doing an essay for DBA (dontbuyads.com)?
Lis - not trying to poach! Just really want to hear more from Jason!
Chris

Quote:
Originally Posted by Jason M Struck View Post
I started with no overhead, with about maybe 3500 in equipment.

My first year I ended with about 15 members, my second year about 20.

Then I moved out of my garage, and now I add 3-5 members a month, such that after six months in a 'real space' I have added an additional 20 members or so while losing maybe 5. Hence, after almost 3 years I am now around 30 members.

However, due to my initial set up, I have a great cash flow, pay myself enough to live, and I am always growing.
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Old 06-17-2011, 09:29 AM   #14
Chris Cooper
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Re: Who was successful in obtaining a small business loan?

I think $900/mo for 1800sq feet is a great deal. We're paying $3400/mo for two facilities (2000sqft each.) Add about $700 for heat, lights, taxes, internet, phone....etc. and then subtract about $900/mo for space that I sublet to a RMT and a supplement store. $8.50/sqft is an average rate, at least here, for industrial space.
One thing I'd start considering: time. Rezoning takes time; contracts take time; buildouts take a LOT of time; equipment takes time to arrive.
Think about the worst-case scenario: if you had to open today with 5 med balls and 5 sticks of PVC, could you do it? I think minimalism at startup makes you a better coach in the long run....
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Old 06-19-2011, 08:38 PM   #15
Matt DeMinico
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Re: Who was successful in obtaining a small business loan?

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Originally Posted by Masen Mills View Post
This approach allows us to survive for 1 year, even with zero clients. As long as we finish out first year with 120-150 members by the end, then we'll start the second year fully able to pay all of our overhead (roughly $4,500/mo) and pay ourselves a decent paycheck (we will be the only two coaches as well).
What happens after that one year if you don't have the clients? You can't stop working it, you don't have another job. You don't have any other money coming in, what if you can't make the payments? Bankruptcy?

You sign a loan, you just became a slave to the bank, period. "The borrower is slave to the lender"... it's been said for thousands of years.

I'm not just talking a big loan, I mean *any* loan. It's possible to skimp for a while on your family budget to save up a few thousand dollars, enough to buy 3 or 4 bars, 2 pairs of 45's, 2 pairs of 25's, and 6 pairs of 10's, plus some iron, a kettlebell or two (or better yet, a used set of dumbbells off craigslist). Build your own pullup structure, hang some rings, and have at it.

I just can't stress enough that loans are a bad idea to start a business. Heck, deliver pizzas for a few months, it'll make you appreciate your business that much more, trust me. You can make a few grand a month if you bust your butt delivering pizzas even.
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Old 06-19-2011, 09:52 PM   #16
Katherine Derbyshire
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Re: Who was successful in obtaining a small business loan?

Quote:
Originally Posted by Matt DeMinico View Post
I'm not just talking a big loan, I mean *any* loan. It's possible to skimp for a while on your family budget to save up a few thousand dollars, enough to buy 3 or 4 bars, 2 pairs of 45's, 2 pairs of 25's, and 6 pairs of 10's, plus some iron, a kettlebell or two (or better yet, a used set of dumbbells off craigslist). Build your own pullup structure, hang some rings, and have at it.
And if you can't, your family finances are way too tight to consider starting a business....

Katherine
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Old 06-24-2011, 10:03 PM   #17
Kara Werner
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Re: Who was successful in obtaining a small business loan?

Kara's husband here... We are in week two of our affiliate having a gym but month 10 of running the affiliate. For the first five months we ran out of parks and the garage. The last five months we struck up a deal with the city to give us space and they got 20% of our revenue. We had built up to about 25 clients and had a steady stream of folks wanting to try it out. My wife Kara was a teacher and with summer approaching we decided it was time to get real about the gym and I took out a $25,000 personal loan. I didn't want to tangle our finances with the gym so that gave us a defined amount to fund the gym. We have used that to buy equipment, pay the rent and deposit and cover all sorts of other startup costs (use permits ). The gym is her full time gig but I have a job that covers our living well and the payback on the loan if stuff goes bad. We did this with 25 members and that is just enough to cover the overhead. Out of that 25k we started with we still have about $7,000 of the original left. If we did not have my job to fall back on we would have not done the loan and just continued our deal with the city until we could have saved up that much money.

As someone else mentioned, be prepared for all the little extras like internet, power, etc... Don't worry about massive buildout right away. We layed down rubber flooring and built a 14 person pullup rig and left the rest nice and simple. Eventually we will install showers but no one expects them right now. Think about what you "have to have" and what is a "nice to have." Be prepared to start scouring the internet for the best deals on equipment and don't be afraid to check out the local sports authority and play it again sports for the real basic stuff.

BTW we did look into a small business loan a few months back but no bank wanted to give out money to a business that didn't have a location or a few years on the books.

If you want to see our full list of equipment and costs let me know.
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Old 06-25-2011, 04:46 AM   #18
Brian Strump
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Re: Who was successful in obtaining a small business loan?

"I didn't want to tangle our finances with the gym"

This is also a great way to have the IRS looking for you. Mingling personal and business assets and income is NOT a good idea.
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Old 06-25-2011, 09:17 AM   #19
Kara Werner
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Re: Who was successful in obtaining a small business loan?

Brian,

Please clarify, I don't think I am reading your response right. In your opinion should we have not used the personal loan as investment capital?
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Old 06-25-2011, 02:09 PM   #20
Brian Strump
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Re: Who was successful in obtaining a small business loan?

Quote:
Originally Posted by Kara Werner View Post
Brian,

Please clarify, I don't think I am reading your response right. In your opinion should we have not used the personal loan as investment capital?
You said that you didn't want to tangle or something with your personal finances.

My comment was regarding if you are running a business you need to keep track of all money going into and out of your account. You need business accounts set up. You need to keep track of personal money that you put into your business accounts, so as not to pay taxes on that as income, and make note of it as such. You should also not have money that you are collecting from a business going directly into your personal accounts. It would need to be deposited into your business account, then deposited(paying yourself) into your personal account.

It's also frowned upon by the IRS to use only one account to collect fees for service, and use as payroll.
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