A Box Business Plan

One of the questions I get daily is, How do you start your own Affiliate?  That is what this whole website is dedicated to, there is a ton of my best information in interviews and blog posts all about getting started with your fitness business.  But in this post I will bring it all together to show you how to go from sitting on your couch day dreaming about yelling 3…2…1….go to unlocking the door at 6:00 am to let in a flood of people ready to WOD.

 

Before we jump into the goods remember, you need a plan.  Not a plan that takes years to develop, you are opening a gym not curing cancer.  Follow the steps below, but think of it like a workout.  You can have the best plan to beat your Fran time, but after that tenth thruster when your elbows drop and the bar lands low you have to adjust on the fly and think on your feet.

 

1. Get clients.  Yes, get clients before you open the doors.  You need practice training people who are paying you, not members of a globo gym.  Find a small group of people who believe in you.  Find people who believe  in you so much, they will train outside or in their home and pay you money.  This is a crucial step in the process.  If you build it they will come = False.  You need to develop your following before you open the doors.  Jon Gilson the Founder of Again Faster started his whole business around this idea.  He explains it all during his interview on Fitrilla.

 

2. Get a Mentor- It sounds cliche’ and many people will overlook this step but it is very important.  A mentor helps when the going gets tough and always provides support and solutions.  It is important as a business owner to have someone to turn to when everything is not running smooth.  They do not have to be someone killing it in the fitness business or working at CrossFit HQ.  Someone you look up to and has proven success would be a great place to start.
3. Develop your Vision- Completing step #1 will help you shape the true vision for your business.  Remember it does not have to be some boring statement that is full of fluff and no one can remember.  Check out Broklyn based company Holstee’s mission statement story. It was so creative it went viral.  You must let your passion shine through and spend some time thinking about exactly what you want to provide for people.

 

4. Write a Plan- I do not even like to say business plan because it sounds so freaking boring.  Just write a rough plan.  I totally disagree with throwing out projections and goals of making $100,000 over the first year and growing $50,000 each year after.  Open the doors and get clients then see how fast you will want to switch your plan, goals and projections.  My advice is to write down your must haves.  I list them below.
-Security deposit
-Three to Six months rent
-Communication/Office  (phone, internet, member check in system, computer, desk)
-Affiliation Fee
-Equipment
-Insurance
-Legal Paperwork (setting up an scorp or LLC)
-Office and cleaning supplies
-Website
-Slush fund of about $1,000 for unforeseen expenses.

 

This is your “Final Number”  The last number you need is how many members  it will take to cover your monthly expenses.  You charge $100 a month and your rent, utilities, internet, phone and office expenses are $3,000 you need 30 members to survive.  Now your goal is to exceed that.  Double it then triple it.  You can project all you want, but your goal is to surpass that magic number so you can start to pay yourself and reinvest more money into the business.

 

5. Find a facility.  The fun begins here.  Think about the type of space you need and where it will be located.  Then go shopping.  Get estimates talk to land lords and tell people exactly what you are doing.   Be confident and believe in your product. Write down prices and get an estimate of what a security deposit and 6 months rent would be.  Remember rent is always negotiable here is an article to check out – 10 ways to negotiate lower rent. Your numbers above might change slightly after you lock in a price, be sure to adjust them.

 

A few important things to remember when seeking out a location, be certain that you can open a fitness facility in that location.  Zoning in some areas is super complicated.  Parking and nice neighbors are important as I stated above.  Do you need heat or AC? The bathrooms should be appealing not college dorm room style.  How important is a shower for your clientele?

 

6. Take a look at your “Final Number” and decide if you need a loan.  Your “Final Number” is all your expenses added up plus the cost of rent and security deposit.  Can you swing it on your own? I advise on all occasions to avoid a loan if you can front the money and have some left over to live off of.  That would be the ideal situation.  If not then strap on your Sunday best and head out to the banks.  Do not stop at one.  Practice your pitch and get different opinions.  Ask friends and get creative on how you can get the money.  This should not stop you from pursuing your dream.

 

Once you have your final number you will have a better idea if you can handle the money on your own.  Well what about the time spent managing clients, keeping track of billing, coaching, programing and cleaning.  Having a partner may seem appealing in the beginning but there are so many challenges that can come when working with a business partner.  The day to day communication and decision making to the big one of buying someone out when they leave. If you want a partner that goes away after three months, but is there for you every step of the way when you are starting, take a look at my 3 month- consulting program.  I will help you build, start and grow then step away and let you enjoy running a successful business.

 

7. Decide on an entity.  Is it going to be an LLC, S-corp, sole proprietorship or general partnership? Your local court house or secretary of state is where you file this paperwork.  The basic run down is LLC and S-corp require fees, paperwork and legal advice, but you will not lose everything you own if someone sues you or the business goes under.  They protect your assets.  A sole proprietorship (one person) or general partnership (two people) does not require any legal help to set up, but all your assets are at risk.  The smart choice of the two is an LLC or an S-corp.  Do some research and figure out what is best for you then file for it. Do your research on which will be the best for your situation.  Here is an article to help guide you How to Chose a Business Entity.

 

Personally I have worked with an amazing accountant who handled all the paper work in setting up the business entity and gave me the best advice on how to save money when it comes to tax time.  Seeking out a good accountant is well worth your time.

 

8. Liability insurance for your facility because as soon as you get the location people will want to come in and every single person, friend or stranger needs to sign a waiver. Affiliate Guard is a good place to start, they provide insurance for numerous CrossFit boxes and give a very reasonable price.

 

9. More of the super fun, paperwork.  You need a fictitious business name or DBA.  An employer identification number or EIN.  If you plan on doing any retail you will need a retail permit and or a sales tax permit depending on your state. For all these issues visit your county clerks office.  It is not that difficult and I am sure the people in the clerks office will help once you tell them about the amazing business your opening.   You should also get a business account at the bank set up and running.  You should use a different bank from where you do your personal banking so the two never get confused.

 

10. Market and Promote. This is the super fun stuff when you are running a business you actually believe in.  You do not have to sell ice to Eskimos! That is unethical and sleazy, right!? Sell a fitness program that works to people who are motivated and driven.  There are numerous ways to market and promote be sure to check out a few of the articles I have written regarding this…

 

 

11. Become a Student of Business- Study your marketing, financials and growth like you study the split jerk.  You need to perfect the business side of things in order to have clients to train.  Remember you do not need to be amazing at everything.  A few good tools will get you by.  If you hate keeping the books then hire someone to do it.  You have to invest all your energy in things that you enjoy and can grow.

 

The best and worst part about this is you are the BOSS.  All final decisions come down to you and you need to be the one that gets the ball rolling when everyone else is down.  This article is like learning how to grip the bar for a clean, it is just the beginning.  There are many more complex steps that will not be exposed until those met con loving CrossFitters start doing pull ups and push ups as fast as they possibly can.

 

Leave a comment below and let me know your plan? Just starting or are you open?

 

  • RG Spain

    First of all, thanks for taking the time to put this up. It is a great help and great eye opener. I’ve personally been on the fence about opening a gym and recently have decided that I’m going to go for it, but also felt a bit overwhelmed with the realities of entrepreneurship.

    There are some details that apply differently in my case, as I’m living out side of the US, but I think that this is accessible to anyone with a desire to et the ball rolling.

    Cheers, and I will fill you in when things touch off.

    • http://www.fitrilla.com Geo Rockwell

      RG,

      Thanks for the feedback and comment. Happy this helped out. It is intimidating, but worth the reward when you push through. Be sure to keep me posted on your progress! I am assuming you are looking to open in Spain?

  • Pingback: 4 Mistakes to Avoid When Opening a CrossFit Gym | Fitrilla

  • Pishonek

    Hope you can help me, I just emailed you Geo! GREAT READ

    • http://www.fitrilla.com Geo Rockwell

      Pishonek,

      Thanks for the comment! Looking forward to working with ya.

  • Waldier

    Hi, after some thoughts I decided to open a box on my own, I was expecting a partner to join me but he won’t, I live in Costa Rica and crossfit a fairly new concept, I have been a sports lover for a very long time however I’m not a trainer, do you think this will be a big roadblock?

    • Al

      Hey Waldier,
      So funny you mentioned opening up a box in Costa Rica. My wife and I were thinking of opening a box (we’re from Sacramento, CA) but were going to costa rica and joked about opening one up out there instead! Probably not gonna happen but we are looking forward to visiting your beautiful country.

      • http://liveseriously.blogspot.com/ Katie

        Hi Al, are you still thinking about opening a box in the Sacramento area? My boyfriend and I are thinking the exact same thing, but we can’tfigure out where since there are already SSo many CF gyms here! Maybe we can meet and collaborate :)

  • Tamra fitzsimons

    Hi I would like to open a Crossfit gym.

    Thank you for this helpful information. As I am not a trainer will this be a problem?

  • Louie

    This is very helpful im looking to open up a boxing gym but the place I found is big enough for both. I was hoping to help with the rent to open a small to med size crossfit gym. I, not a trainer but have a few friends that I could get certafied and help train. Just curious if you think this would be a good idea to combine the two? The place is almost 5k square feet with a show room for 1k a month thanks for any imput.

  • Christina

    Planning to open a gym as soon as possible. Still working it all out. I agree about the accountant . Def a time saver and an energy saver. Wish me luck

  • Wooly

    Great site!! been a dream of mine to have my own crossfit gym and now its time to make that dream a reality!!

  • http://liveseriously.blogspot.com/ Katie

    Thank you thank you! Yet another motivating read, too bad I have to suffer through the rest of the day at my desk job with nothing but amazing ideas for my CF gym floating through my mind. TGIF, the boyfriend and I have a lot of planning to do this weekend.

  • Vaklev Bastian

    excellent, will follow this for sure

  • Nathan

    What are your thoughts on opening a box in rural areas. I have been told the cross-fit thinking is 80% of your business lives within 5 miles of your facility. Well here in rural America nothing is 5 miles from you. We drive 30-40 min for anything. The location i am looking at is 20 minutes from 4 High schools/Towns and 30 minutes from 5 via interstate. Plain view from the interstate in between 2 exits. Awesome square foot cost. I would have about 3 acres surrounding the building included in cost. 5000sq ft building, six garage doors and bathrooms need a lot of work. Thoughts in general? Thoughts of rural success?

    • Melissa

      Hi Nathan, I have wondered about this too! It is so hard in rural areas, because everyone is so spread out and also because it seems less committed to fitness. I would love to see that change in my area once they see how fun it is and how awesome they feel doing crossfit! I am trying to find a space right off a major highway just outside of a bigger town….I don’t know of you would want to be 20 mins away from all the towns. Tht seems like it may be a pretty hard sell… But I sure hope you find the perfect spot!!! Good luck!!