Getting Funding – Opening A Gym Business
Your mind is filled with ideas, and it has conceptualized powerful methods of implementing them, but starting and sorting out the needs for opening a new gym business isn’t that easy. In fact, getting started with a health club business requires a hefty stack of hard cash. More so, collecting and saving cash requires time and business plan proposal in meetings from one investor into another (thinking they would be interested enough to fund your business) can also take years yet still can yield minimal results.
And what makes it even harder is selecting from plenty of funding options available. Because while it may be appropriate to gather a few investors in one room, and talk to them about funding your business, many of them might still say no, especially if you don’t have a clear and stable business background. And in this world, you cannot just simply find someone or some people to throw cash into your business out of kindness. The good news is that with the global reach of the internet, startup gym owners can receive funding in order to get their business off the ground. Opening a gym has never been this straight forward. The question is, “How can you locate the best financing or funding option for your health club?”
Remember, every alternative has its advantages and disadvantages, and in some cases, certain funding options may not be as attractive as others, or even available to you. For instance, some investors would look into your experience in the business, investing the money for a flat return, while others would expect that they get a portion of your business, as well as some kind of control for the funds they provide. And it’s tough for first timers. So there will always be a question on what funding options you may qualify, what you are willing to give up and so on.
First and most commonly, gym funding is a bank loan, but this won’t happen if you have a bad credit rating or if you don’t own much in the way of assets (collateral).
For startup help, you may also need to trade equity or services, also called ‘bartering your skills,’ trading something you have for something you desire. Another is negotiating to form a partnership with a customer/existing client, so if you are a personal trainer and you have a customer who also wants to build a gym, then you can negotiate with him or her for support. You can also find a complimentary business that can see the value of your business idea and that is willing to give you advance royalty payments so that you can fund this health club development. There is also something called white-labeling agreements or early licensing options.
On the other hand, you can sign up for a business accelerator or incubator, organizations which are more likely than not associated with community development organizations, universities and large companies. They can offer free resources for startups, including consulting, and many still can provide seed funding. You can also apply to local investor groups, which are in your area. These groups are composed of people with high net worth and are interested in supporting qualified local startups. Find them using online platforms, focusing on local networking, but make sure to join those in the industry or niche related to yours.
You can also start a crowdfunding campaign, a type of campaign where anyone can join and where people can make pledges during your campaigns or give donations. Additionally, you can pitch your business idea to friends and family members who might be interested to starting a health club business, too. These people may be the primary sources of funds for startups. Find a business partner that is willing to concede a portion of the business management control, but make sure to find one or some that possess the complementary skills, business acumen and attitude, aside from the ability of financing your new business.
You can self-fund (bootstrapping), but it may take some time before you save enough money to start your gym and grow it organically. The main advantage of this option though is that you can take full control of your business.
Tips before locating gym funding
- Write a comprehensive plan with your visions and make sure to describe your experience and expertise in the gym industry. You can also include a brief description of the combined experience of your employees or team and business partners. This step can set the stage for investors to look into the potential of your competence to build a health club.
- Calculate startup cost and operating costs. You should also include any revenue from various resources and capital expenditures. As you may already know, these investors would want to see projections related to your business model. You can get help from resources, including economic development corporations, small business development centers and chambers of commerce to give you that relevant statistics, competitor information and demographic.
- Compile financial information and assets, which will include investment statements and bank statements as well as personal assets and automobiles. For loan applications, you may need to prepare a three-year history of personal tax returns for business partners and business tax returns.
There you have some of the best options around to locating gym business funding to get your business off the ground. Remember that all these ideas will need commitment and work on your part and that there is no foolproof formula to finding funding or there is free money around. You should know that every financing decision entails a tradeoff between long-term and near-term paybacks as well as in terms of control and ownership of your gym business.
Through the years, UGE has provided startups with lucrative used gym equipment packages at low, low prices. Certainly, you can find one that’s right for your budget and business needs, but we can also help you determine which options might be for you. Don’t think twice of contacting us by calling +1 (310) 638 4800 or emailing us today!
*For customers in the United States, we can provide attractive financing programs, but international customers will have to arrange their financing.