SHOULD I OPEN A SECOND GYM?
SHOULD I OPEN A SECOND GYM?
OPEX Fitness CEO Jim Crowell Answers
“When should you open a second one? The honest answer is that it’s going to depend on the individual because there’s many different ways to grow a business, and I mean a large business. You can do it many ways.” – Jim Crowell
Starting a second gym can be an incredibly risky venture, especially if you have no cash in your bank from which to fund it. Without cash, you will likely have to accrue debt in order to start a second business. The more debt you take on, the more risk you have. Too much debt can prevent growth and even destroy your fitness business entirely.
If you own one business with no cash surplus and you wish to open another gym, that may not be the wisest decision.
Why?
You haven’t proven that your business model is economically sustainable and profitable. Opening a second gym will be incredibly risky and may put you in further financial jeopardy.
While opening a second gym is an incredibly risky business decision, following these principles will raise your probability of financial success.
You Must Have Cash – Either you need to have cash in the bank or a reliable way of acquiring cash. This could include entering into debt or acquiring investors. There are some risks to bringing on investors, or acquiring debt.
You Must Have a Financially Viable Business Model – Is your business model actually paying your bills and putting money in your pocket?
You Must Have a Consistent Systems and a Manager – You won’t be able to run two facilities yourself. Do you have or are you hiring a great staff to take care of your second facility? Do you have easily repeated standard operating procedures?
So in reality, getting ready to open a second gym is all about managing risks in these three categories.
“So it really comes down to systems, cash flow, and can you actually prove out that you do have a model of business that will be successful. Until those three are met it’s very risky to open a second gym.”
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