How to Purchase a Personal Training Business??
I have the opportunity to purchase a personal training business. In another state. It seems as if I would be purchasing some equipment, taking over a lease and have access to the original owners 50-60 clients. I would hope that at least half of those people would stick with me. The owner is currently running a profit (more than I make currently and I'm in a much larger city). I know you can never get the 'full' answer of why someone is selling but the business seems great and I'm not sure why the owner would be selling!
I've asked a zillion questions. Can you think of any other questions I should ask other than the obvious ones? Anything I should consider that perhaps I haven't thought of already? I've asked about hours, transferring clientele, equipment maintenance, inventory lists, equipment lists, overhead costs, independent contractors, address, area, timeline, competition,advertising (does mostly free sessions to secure new clients but maintains a full schedule), landlord (is his client), rent, any legal issues with the business or building, no vandal, training style, why the owner is relocating, financing, how long he has been in business, size of studio, no classes.
I'm currently in corporate wellness and have a few private clients. I would love to relocate to this other state and I would love to be my own boss. My fiance works in banking however and is extremely considered about becoming a small business owner as he is seeing many small business owners very very unhappy.
I've never purchased a business. I've been in the industry since 2002. I have a BS and MS in exercise science. ACE and NASM certified. It would be nice to have some existing clientele when having your own business, instead of starting from scratch. But I'm wondering if it is foolish to 'buy' these leads that may or may not be there at the end!?
the one sentence that really gave me pause is in your first paragraph: "I would hope that at least half of those people would stick with me."
Hope is not a business plan. You have asked many questions but it comes down to the clients you will have because they will be paying your bills.
As you well know, personal training is very personal. People do not easily change from one trainer to the other. They often have been staying with a trainer because of the established relationship which can trump the importance of exercise.
You would be moving into a new area where you have no network to draw on for referral business. But once you sign the lease at the dotted line, you can be sure of the ongoing expenses.
It is your decision; do not let wishful thinking drive it.
You mention that the business is currently making a profit. Have you done your computations as to how many of the existing clients would need to remain after your purchase in order for you to continue to make a profit (e.g. all of them, half, a third etc)?
My comments are intended as my own opinion and thoughts that I would have (in addition to the ones you already mention) if I were looking at such a deal or thinking about what things I'd want to consider; they are not intended to dissuade or encourage you to make the deal. However, I would say that if it were me, I'd make sure that I obtained the counsel of an experienced business attorney before moving forward.
My personal opinion and a few questions if I were in your shoes:
Why is this person selling a profitable business?
How much is the lease payment?
What type of lease?
Is the equipment paid for?
How old is the equipment?
Square foot rates in the surrounding area?
Overhead, power/heat/AC, cable, insurance, taxes, phone, etc?
Parking square feet?
Have you seen the owners books and tax returns for the last three years?
Some basic questions that need to be asked. And could you start your own business without purchasing and existing business?
What if ALL the existing clients leave? Would you be better off working for a larger club as an employee or as a self contractor?
I have been self employed since 1988 and I love it, and have had many successful start up businesses with the prospects on a 5 acre/40,000 square foot start up facility however, a small studio would not be my first choice.
P.S. Please keep us posted on your venture!
Wishing You Great Success!
You state that "it seems as if I will be purchasing some equipment": I would suggest having a business advisor, business lawyer take a look at EXACTLY what you are buying.
If you go into it expecting to loose half of the clientele but you are willing to build your business back up, possibly write this into your contract somehow.
I think bottom line, the question you need to ask is how much are you willing to put into this business? What are your reasons for wanting to move? Is it worth it? Or can you stay where you are and start your own business with your personality and abilities rather than follow is someone else's footsteps.
Don't hesitate to ask questions and also, negotiate, as everything is negotiable.
You should treat this as you are going in with nothing. It is not a good business move to buy this business thinking that any clients will stay. This way you will be monetarily prepared.