If you are really into fitness and are thinking about starting your own business, you might be wondering if owning a fitness business is right for you. In our experience, there are only two reasons to open a fitness studio:
1. You have enough money to invest.
2. You have a need to create something.
There are typically two broad types of fitness owners: the Fitness Investor and the Fitness Entrepreneur. Each type are not mutually exclusive, but you will have different primary motivations depending on which type of owner you are.
Which one are you?
The Fitness Investor
You are making a bet that the money invested to build, grow, and maintain the fitness studio will result in profits.
Those profits should have an ROI (return on investment) that justifies the risk of investing large amounts of cash (or “capital” for those nerdy accountant types), though you are prepared to lose your entire investment. If you are the Investor, you clearly understand the risks involved and what is at stake. (See related post What are the potential risks and rewards of opening a fitness studio?)
While it could be, this is not likely your first business investment.
But whether this is your first or your 10th business investment, you will want to oversee key decisions and parts of the process. You did not purchase shares of AT&T or Google stock, so like many investments with a higher risk profile you will want to oversee your investment to help ensure its chances of success. Typical items to oversee include:
1. Which fitness concept to invest in
2. Site selection
3. Hiring of the key personnel
4. Business plan concepts such as key customer demographics, market positioning, projected financials (often called proformas) and reviewing results and adjusting course as the business progresses
Fitness Investors will hire or place a trusted team in place to manage the studio as you will not be involved in the day to day decisions.
Inherent here is that you are entrusting the primary operations of the business to someone other than yourself. You will not be checking members in, teaching classes or emptying the trash cans and you are more likely to be found in meetings with key staff, reviewing financials with your Fitness CPA, funding the business as it matures, and drawing from the business as it generates profits.
The Fitness Entrepreneur
You are also making a bet that the money invested will pay off, but at the center of each entrepreneur is the need to create, to solve a customer or product problem and to serve your customers.
The Fitness Entrepreneur poised for success does not simply have an itch to scratch, you have a fire inside you that cannot be quelled in any other way.
Phrased another way, the Fitness Entrepreneur would find fulfillment in running the business for free if money wasn’t an option because you are serving an internal desire. You are passionate, energetic and dedicated to serving the business and members.
If you are a Fitness Entrepreneur, congratulations! You no longer have one boss.
You have 400+ bosses called “your members.” But for these members, your members, you would work 24 hours in a day for if you could (and some days it might feel more like 25 hours).
A Fitness Entrepreneur is not typically independently wealthy, so to fund the business you will be found leveraging debt, an equity partner or your own hard earned savings.
The Fitness Entrepreneur has many overlapping qualities in common with the Fitness Investor, such as the investment or need for capital, assuming the risk of loss and striving for a return on your investment. But there is more inner drive and focus that comes from within that leads you to be a Fitness Entrepreneur.
A Fitness Entrepreneur takes calculated risk, but could also be heard quoting Han Solo and saying “Never tell me the odds”.
So, which one are you?
“I just knew there was an inevitability that this thing was going to work out and that I wouldn’t fail at it. If you’re not the kind of person to think that way. If you really don’t have that gene where you know it’s going to work out, you know, don’t hope, you know – then you shouldn’t be a founder. I hope that doesn’t depress anybody but hopefully I’m saving a bunch of pain.” Chris Saca
See related article 10 reasons not to open a fitness studio