Blueprint of a Startup (Part 2)

In the June issue, I sketched out the first phases of setting up your own personal training business, based on my own experiences.

The steps outlined in the June article showed you how to assess the market for your services, write a business plan, secure the necessary financing and find a suitable location. Now here is the tricky part: “setting up shop” and generating enough business to have a successful operation. Let’s take a look at the intricacies of negotiating a lease, marketing your services, hiring and training staff, and setting up accounting procedures.

Negotiating a Lease

By now you have found the perfect spot to establish your business, and you are ready to negotiate a lease with the landlord. If you live on the East Coast, this is not a complicated process, since a commercial lease is a fairly standard business document. However, in California, where there are no standard commercial lease agreements, negotiating a lease can be a lengthy process that will try your patience and your negotiation skills.

In the June column, I advised hiring a real estate broker to help you locate an appropriate space. In theory, that broker should take care of negotiating the lease. But be careful. Since real estate brokers have a stake in “closing the deal” as soon as possible in order to collect their commission, they are not always fully committed to negotiating the best terms for you no matter how long it takes. You need to play a hands-on role to ensure that the final lease terms meet your needs.

Make a Deposit. Once you are sure the space is what you are looking for, put down a nonrefundable deposit to secure it. This way, you won’t lose the building while you are taking the next steps.

Decide on Any Renovations. What improvements need to be made to the space before you can open for business? Invest in the services of an architect or a designer who can develop plans. Be sure to communicate your precise requirements. For example, in terms of the exercise equipment, the designer will need to know exactly how many pieces you will have, the size of each piece and the space needed to operate it. A list of all electrical items (computers, printers, etc.) is also essential in order to complete accurate floor and electrical plans. Figuring this all out can be quite fun, since it enables you to create an exact image of what the inside of your facility will look like.

Include the Improvements in the Lease Agreement. Once you have the plans, you can ask the landlord to include the completion of any space improvements as a term of the lease. This saves you a lot of headaches, since it makes the landlord responsible for the building, plumbing and electrical permits that may have to be obtained from the city for renovations.

Consult a Lawyer. Submit the lease to a lawyer, explaining all the renovations you want to be included. The lawyer will draft up any addenda (changes) to the lease and submit these to the landlord. It’s important to realize that, although all lease terms are negotiable, if you make too many demands, you may scare off the landlord by appearing too picky. But if a lawyer makes the demands, she looks like the picky one, not you.

Sign the Lease. Make sure the contract is between the appropriate parties. Should the lease be in your name or the name of your corporation? If you plan to open a fairly large facility and hire employees, incorporating your business may be in your best interest. For example, having your corporation lease the building will protect your personal assets. (See “Using Professional Services” on page 15.) If this business structure suits you, you need to talk to your accountant or lawyer prior to signing the lease to ensure that the appropriate paperwork is completed.

Marketing Your Services

How do you decide the best ways to advertise your business? Your pricing strategy (which you clarified in your business plan) will influence the best type of marketing for you.

Mass Marketing. If you are planning to keep your prices down, you will need to attract a large number of clients to make a profit. This can be achieved by a mass marketing and advertising campaign that gets your name out to as many potential clients as possible. You might develop flyers, radio spots, print ads, brochures or even e-mail newsletters. Many companies will jump at the opportunity to design your marketing materials. You can find companies that specialize in creating business imagery and marketing messages by consulting small business owners you may know for referrals, collecting marketing pieces or ads you like and finding out which firm created them, or by looking in the Yellow Pages.

Another excellent way to inform people of your new facility and services is to send out press releases to local television stations, community magazines and newspapers. (See “Writing a Press Release.”)

Targeting a Niche Audience. If you plan to provide specialist services with “specialist prices,” you may want to approach your marketing campaign slightly differently. The best way to reach a target niche is to create referral networks with the professionals who work with the clients you are targeting. For example, if you plan to specialize in postrehab, network with physical therapists and chiropractors in your area to foster a strong feeder system to your business.

Begin networking by sending out letters introducing yourself to professionals in your geographic area. The letters should tell a bit about you, your facility and the services you provide. Indicate that you will follow up with a phone call in one week, and be sure to do it. The goal is to set up a face-to-face appointment. This is your chance to sell yourself and your facility. It’s a good idea to offer interested professionals a free consultation and personal training session to illustrate the value of your services. Once you have developed a rapport, call every month to give an update on the progress of your business.

Designing a Web Site. Whether you hope to appeal to the masses or a select few, a Web site is a useful tool. When it comes to building a Web site, ask yourself, What is the purpose of this site? Is it simply the first point of contact for potential clients, a way to clarify my services before they contact me? Or is it an adherence tool, offering motivational strategies and exercise tips to keep existing clients coming back for more?

The answers to these questions will help you form a workable framework with which to approach a Web site designer. As with finding a marketing firm, rely on referrals from colleagues or research Web sites you like to find the Web designer who is right for your business. The costs involved in starting up a Web site generally range from $200 to $2,000 and up, depending on the complexity of the site. The costs for maintaining it range from about $20 to $50 a month. You can register the domain name you want to secure for your business at www.godaddy.com for $9 per year.

Hiring Your Staff

When it comes to staffing your facility, you’ll need to consider a whole host of federal and state laws that govern many aspects of the employer-employee relationship, including minimum wage, withholding taxes, worker’s compensation, etc. If you violate the law, you could find yourself facing steep penalties that could jeopardize your business. In some cases, employing the services of independent contractors rather than hiring employees makes sense. However, there are also laws that regulate who can and cannot be treated as an independent contractor. A lawyer can help you make the best decision for your business.

Whether you ultimately decide to use employees or independent contractors, bad hiring decisions will come back to haunt you. That’s why rushing through the hiring process is always a big mistake, no matter how eager you may be to get someone on board to start earning money for you. Good hiring takes time and planning. The following steps should help you avoid costly mistakes.

1. Prepare a Detailed Job Description. Include the duties and responsibilities of the position, minimum qualifications for candidates and any special skills required. Be honest about the job. How many hours a week will be required? What is the likely take-home pay?

2. List the Qualifications and Traits of the “Ideal Candidate.” Include desired job experience, skills, and character and personality traits.

3. Thoroughly Review the Résumé of Each Candidate. Watch out for potential red flags, such as demotions in former positions, inconsistencies or conflicting dates in the resume, or a lot of job changes in a short period of time.

4. Interview the Best Candidates. Interviews are too important to be rushed, so set aside enough time to gather and assess all the facts about each candidate.

• Make a list of general questions that
  will provide an overall picture, and
  specific questions to tell you whether
  the applicant has the technical skills
  required. (The job description you
  prepared will help you with this.)
• Be completely open when describing
  the job. Discuss the results you expect
  from staff members and the normal
  frustrations and satisfactions involved
  in working in the fitness industry.
• Take notes. Jot down things you notice. Does the applicant avoid eye contact,
  fidget a lot or exhibit poor posture?
  Keep in mind that your clients will
  encounter these same traits when
  working with this employee.
• Let the applicant do the talking. Ask
  questions and then sit back and listen
  carefully.

5. Check References. Once you have narrowed the list of potential candidates by reviewing résumés and conducting interviews, call to check the references of the finalists.

Training Them Properly

Hiring the right people is just the beginning of the staffing experience. You need to train your staff to fulfill—and exceed—the day-to-day requirements of the job.

Procedures Manual. Depending on the size of your company and the number of employees you have, you may want to develop a procedures manual. No matter how small your business is initially, it may be a good idea to document procedures and expectations right away; your business might grow quickly and a manual will be a valuable tool to help ease new emloyess into your corporate culture. This type of manual is typically divided into three sections:

• Quality Procedures: states guidelines
  for professional dress (will your
  company provide staff uniforms?),
  grooming standards and customer
  relations.
• Job Descriptions: gives directions for
  all the tasks likely to be performed
  from day to day.
• Forms: contains copies of the forms
  typically used in your business (e.g.,
  client activity histories, PAR-Q forms).

New-Staff Training. Every new staff member should go through a formal training period during which you (or another experienced member of your staff) give individual, hands-on guidance.

Ongoing Training. In addition to the formal training period, you need some procedures for ensuring ongoing training, such as regular staff meetings, performance evaluations and periodic case study reviews of strong customer service examples and client success stories.

Accounting Tips

The size and scope of your business will govern the complexity of your accounting system. Most small-business requirements can be fulfilled by using a software program like QuickBooks, which costs about $250. For a sole proprietorship or partnership, an even simpler application, like Basic Bookkeeping (BBK) from Owl software 8 (available for approximately $40) may be sufficient. To help with the ongoing hassle of paying bills, you may want to consider an online bill-paying service. Contact your bank for information, or check out www.ebillpay.com, which will give you a 6-month free trial. Remember, though, the best bookkeeping advice is going to come from your accountant.

Your Dream Business

Opening your own training facility involves a lot of hard work. Your experience may be slightly different from mine, but the information in this two-part article should provide you with a basic blueprint. By filling in your own details, you will be able to turn your dream into a reality.