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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 08-06-2008, 10:29 AM   #1
Kim Betts
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Steps to opening a facility...???

I am wondering what steps people have gone through with opening a CF facility or what steps they may be going through? Just to have a list to check off as we go would be very helpful. I know there's some basics that we are aware of but there's always something you don't think about. Thanks everyone!
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Old 08-06-2008, 01:47 PM   #2
Mark Reinke
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Re: Steps to opening a facility...???

-Attend a Level 1 Cert.
-Initial Business Plan Development
-Determine financial allocation for gear.
-Call Jon Gilson at Again Faster
-Redo Initial Business Plan Development.
-Search for physical location.
-Begin negotiating for leasing options.
-Determine operating utility costs/month.
-Make changes to initial business plan.
-Price out Insurance.
-Review insurance quotes.
-Make changes to initial business plan.
-Make contact with a lawyer for reviewing all legal forms/operating agreements.
-Develop marketing plan (and stick to it)
-Make appropriate changes to initial business plan.
-Apply for affiliation, a level 1 cert, and/or any other nationally accredited cert needed to gain insurance. (If you haven't done this yet, you're probably going to be in business for the wrong reasons IMO).
-Make appropriate changes to initial business plan.
-Present existing business plan to banks/lenders for funding.
-Present existing business plan to more banks/lenders for funding.
-Wait about 2 weeks or more.
-Receive word that your loan was not approved due to the risk involved, lack of effort due to who you talked to at the bank, or just receive no word at all and make phone calls to find out for yourself (the market was just beginning it's downward spiral when we were doing this, it may be different now).
-Evaluate new ways to generate start-up funding.
-Gather a small group of outside investors to spread the risk out, with a 10-15% return on their investment over 1 year (worked very well for us).
-Have lawyer draw up promissory notes for each investor.
-Have lawyer file LLC paperwork and draw up operating agreement for the LLC.
-Secure funding from the group of investors.
-Have lawyer review insurance paperwork.
-Decide where you're moving into.
-Have lawyer review lease agreement.
-Receive all funding for business.
-Call back Jon Gilson at Again Faster and tell him the money order is enroute.
-Develop website.
-Send all signed paperwork and first payment for your insurance.
-Send in CrossFit Affiliation paperwork/payment.
-Draw up liability waiver PAR/Q.
-Have lawyer review liability waiver PAR/Q.
-Build out space.
-Wait for gear to arrive.
-Plan opening festivities.
-Purchase admin stuff (computer, paper, expo markers, etc).
-Set up gear.
-Open Business.

This is pretty much our synopsis of how things went for us. A lot of phone calls and emails were in there. And of course there are going to be some hang ups along the way. Every experience and time line for all of this happening are going to be different. For us it was about 7 months.
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Old 08-06-2008, 02:09 PM   #3
Kevin Wood
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Re: Steps to opening a facility...???

Don't forget cool business cards!
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Old 08-06-2008, 03:02 PM   #4
Kim Betts
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Re: Steps to opening a facility...???

Thanks guys!
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Old 08-06-2008, 05:13 PM   #5
Michael Knaisch
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Re: Steps to opening a facility...???

Mark has explained almost precisely what I am going through. In trying to secure funding through bank loans, I was just told for the second time that the way the market and economy is today, it is to high of a risk to grant a loan at this time. Apparently, fitness businesses, especially start ups, are frowned upon in the banking industry at this time.
We are now forced with the option of approaching local investors. Mark, I would love to hear your ideas on how you pitched your business plan to investors and how many investors you needed to take on to get your business going.
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Old 08-06-2008, 05:46 PM   #6
Eric Auciello
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Re: Steps to opening a facility...???

Michael, Sorry I havent followed up...been busy...let me know if I can help. E
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Old 08-06-2008, 06:25 PM   #7
Mark Reinke
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Re: Steps to opening a facility...???

Michael,

All of our investors were existing clients of mine while I was at the "globo gym". It wasn't a hard sell to them. They liked our idea, they knew the existing surroundings were not ideal for what we were doing, and the risk was spread out over several individuals. Plus, I had good rapport with them, my work ethic has always been in it's "A" game. In spreading the risk out, it's much easier to digest than to just ask for all of your start up funding from one source. We cut our initial start up capital by more than half to get going. We wanted to make every cent that they invested in us go only toward our necessities. Figure out everything that you want, then take that final number and divide it by 3. That should be about what you're asking for. Realize that there will be things you will need to spend on that you didn't plan for. Usually they're small, but they can add up quickly. Live by the "7 P's rule", and everything should be good to go.
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Old 08-06-2008, 06:34 PM   #8
Michael Knaisch
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Re: Steps to opening a facility...???

Thanks for the replies. Let you know how it goes.
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Old 08-06-2008, 06:46 PM   #9
John D. Burch
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Re: Steps to opening a facility...???

Hey Kim,

When helping Andy Petranek, and other affiliates, open or expand their businesses I find what has worked well has been finding a path that allows you to do what you love with the smallest amount of risk. You never want to be training people, trying to change their lives, and wondering if you can keep the lights on next week.

Allow me to expand on this idea...

The cost of doing business is high so why not start small? Mind you, small isn't a term for being unprofessional it just means that you will organically flow thru the multiple steps of growing a business as your ability dictates.

Here's an example:

Do everything that the guys listed above but ALSO add finding a space or location concurrently that allows you to train paying clients... this could be a park location, your garage, sublet a space at a martial arts space. You get the idea.

What this allows you to do is hone your unique CrossFit experience to being one that GETS PEOPLE COMING BACK. So get some time, maybe up to a year, of testing your professional experience and get some success of people returning and then you'll be ready for that space without any real concerns.

Sure, you will have to do all the BS stuff that it takes to open a location that makes you sign a 5 yr lease, or some version. But you will be doing so with experience under your belt and if you're smart you SAVED 1/2 your income from training at the park. You have been saving haven't you because low risk places like the park also very inexpensive.

So when the banks say NO it doesn't really matter because you've saved several thousands, more hopefully, to open with.

And this is organic... you will properly grow into it... too many people these days, from hubris, want to open a 5000 sq ft facility because "some other guy" did it... which is kinda like saying "I'm going to attempt this 500 lb DL and it's my first time EVER doing a DL." If a client ever said that to you I hope you would get them to do the correct weight.

John
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Old 08-09-2008, 03:51 AM   #10
David Mathews
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Re: Steps to opening a facility...???

Hey Michael , just wondering if you got the PM I sent you?
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