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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 02-16-2011, 04:34 PM   #21
Joseph Hardy
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Location: Streetsboro  OH
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Re: Cost of opening an affiliate

Invest in enough assets to generate a monthly cashflow that will sustain your personal expenses, possibly all business expenses. Never dip into savings to live off of. There are lots of ways to do this. Keep your expenses to a minimum starting out. Mine were about $1000/mo not including the affiliation, equipment and insurance fee I paid to start out. You can also start out with little equipment and get a lot of free stuff as you go along. Many of my members have donated equipment.

I would plan on investing $20,000 to start out, depending on your cost of living in your area. Depending on your advertising (I had none) it will take you at least 3 months to turn a profit.

For me: I invested $7000 to start out and got loans for another $7000 since. This month (our 8th month) we are turning profit and growing at a considerable rate. Going again I would avoid loans.

Also, take as many of your wages as business expenses as possible to avoid being taxed on them.
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Old 02-16-2011, 05:20 PM   #22
Ian Nigh
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Re: Cost of opening an affiliate

All I will say is count your blessings that you are opening in the USA where Rogue and others offer competitively priced gear and rents are relatively cheap.
Here in Japan, most commercial locations require a 12 MONTH SECURITY DEPOSIT (that's right, one year's rent up front just to move in), and getting equipment here ends up costing 3 times the normal price due to shipping and customs. Average rents in the city are about 8 dollars a square foot.

The lessons learned for us have been to ensure you have the capital to float your business until your cash flow catches up to your expenses. This may mean totally rewriting your original business plan and starting alot smaller, or it may mean bringing on partners or taking out loans.

Whatever you do, do it unflinchingly and with the utmost confidence and dedication, and it should work out!
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Old 02-16-2011, 08:41 PM   #23
John D. Burch
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Location: Santa Monica  CA
Posts: 419
Re: Cost of opening an affiliate

Hey Jay,

I've seen a lot of interesting theories and formulas in this thread. Since the BIZ program I run with Andy Petranek has trained over 400 affiliates here's what I would like to know FIRST.

Why NOW?

Unless you must open a space why should you do it now. And when I say must open a space this is what I mean... you've outgrown your dirt cheap sublease or have too many clients in the park AND you've saved $20K. That's a "must open a space" situation.

What no one tells you about starting a business is the hardest thing to do is to get a following. If you get a following you can learn how to monetize the interest that is generated from them.

Think of it like this... a group of 30 - 50 clients (your fans/referral machine) working out in a park (zero/low overhead) making you $5 -$10 per workout is much better than... 4,000 sq ft (big overhead) with $20K worth of equipment (an expense not an asset... assets make you money monthly) and no clients.

Also - how hard do you want to work? The harder you work and the smarter your approach the quicker you will realize a profit.

I also haven't seen anyone mention any time or money spent on business development courses.

You want to know how to develop power so you attend a Oly cert. Great coaching - L1 cert... business... nothing?

Here's a free start... it's a a link to our business system. Because, to emphasize someones point, it's easy ONLY if you know what you're doing.

Originally Posted by Jay Hanson View Post
I'm currently exploring my options in terms of opening a new affiliate. I know what kind of money it costs to buy equipment. But what kind of total overall costs can I expect to run into to get my affiliate up and running? I'm sure I am overlooking some of the costs. I know there is the annual affiliate fee, equipment, rent, insurance, web hosting, advertising, etc. How long before I can expect any profit? Or how many clients are necessary to turn a profit if they are paying roughly 120/month? Any help/advice/tips would be greatly appreciated. Thanks
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Old 02-16-2011, 10:15 PM   #24
Damon Stewart
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Location: S Ogden  UT
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Re: Cost of opening an affiliate

It depends on the scope of what you're building. We're into our 4th year and last year spent approximately 40K on equipment and building improvements. This did impact our net profitability but we still finished the year well in the black.

What you do depends on your vision, your experience, and your tolerance for risk.

Very few people regret being debt-free, keeping expenses low, and generating the best return on assets possible.
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