Business on a Budget

Is the new year rekindling your desire to open a training facility? What’s stopping you? Do you think you don’t have enough cash to get started?

You aren’t alone. Countless personal trainers share the dream, yet not everyone has the courage to get started. But if you’re reading this, you’ve already taken the first step toward launching your vision.

Discover how to open a facility with relatively low funds—and get a blueprint to help make your dream a reality in 2016.

First Steps

Before you rush into business, set yourself up for success by thinking through the following three steps:

Step 1: Get Personal

The most overlooked step in the startup phase is assessing your personal budget. You have to account for your monthly business expenses

and

your responsibilities at home:

1. total monthly cost of living (home,food, utilities, etc.)
2. outstanding debt (student loans, credit cards, car payments, etc.)
3. emergency fund to cover 6–12 months of living expenses (average time for a business to turn a profit)

Most entrepreneurs fail to build their personal emergency fund because they think they will be profitable from day one. Make sure you start with enough money to cover expenses at home and at work.

Also, make sure your family members are on board. They may have to sacrifice comforts to keep your dream alive. Maintain regular date nights with your partner and quality time with kids. If you have stressed relationships and financial strains at home, it wears on you as a leader, and clients will sense it.

Step 2: Know Yourself

The second most overlooked step is developing a keen sense of self-awareness. By analyzing yourself you claim the only sustainable competitive advantage you own. It’s the catalyst to reinventing yourself and learning to make wiser decisions. In the lean startup phase, this strategy can help you sleep peacefully at night because self-awareness means you can accept your weaknesses and focus on your strengths.

Wrestle with these three items to develop a better sense of self-awareness:

Mine your past for patterns.

What common lessons have you repeatedly learned throughout your life? Write them down, connect the dots, and discover your real leadership gifts.

Ask for honest feedback.

Ask your mom (or dad or guardian) to tell you—without holding back—what your strengths and weaknesses are. Choose the person who knows you better than almost anyone else does.

Pay attention to what frustrates you.

Noticing your frustrations at how people accept the status quo in life, health and nutrition can precipitate self-awareness breakthroughs.

Simon Sinek, author of

Start With Why

(Portfolio 2009), said, “People don’t buy

what

you do; they buy

why

you do it.” Most would-be business owners start with the “what”: fat loss, athletes or special populations. Others start with the “how”: metabolic classes, speed and agility, or kettlebell circuit training. Many don’t know the “why” behind their decisions and consequently opt for what’s easiest in the short term. Know your

why

.

For Steve Jobs, Apple’s

why

was this: “Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use, and user-friendly. We just happen to make great computers. Want to buy one?”

In today’s world, with its 5-second attention span,

why

you show up—and are driven to wake up at crazy early hours—is what will resonate with the community you serve. It’s what makes your training unique. It’s something no other facility can copy . . . ever.

Step 3: Simplify

One of the biggest challenges to starting a business is sorting through the overwhelming amount of business plan advice on the Internet. The key is to develop a basic map, tweak as you go, and not get hung up on drafting the perfect strategy.

Keep it simple and easy for people to say yes to joining your mission. You can do this by being so good at the basics (serving, greeting at the door, communicating clearly, developing trust, keeping the facility surgically clean and building community) that you’re cutting-edge. Don’t overcomplicate your business with 1-, 3-, 6- or 12-month contracts with punch cards and upgrades. Simply offer month to month. The more clients say yes, the more cash flows in. Focus on building your community rather than locking clients into long-term contracts.

Every facility operates according to its own rules, which leaves many ways to be successful. For your startup, there are no rules. You don’t learn to walk by following rules. You learn by doing.

Keys to Long-Term Success

As we walk through the next steps, I’m going to use this business model: a 1,500-square-foot facility with only one employee—you—that focuses on one-on-one and small-group (2–4 people) training.

In the startup phase, you want to grow slowly. Don’t let a small budget deter you from opening a facility. With some financial savvy, you can create your business for less than you think. Here are the specifics.

Accounting and Business Structure

To save money when forming your business, start off as a sole proprietorship. It’s free and meets all the legal requirements to launch your company. Name your facility by filing a DBA (doing business as . . .) with your county clerk or state; the fee usually ranges from $10 to $100.

Once your business is registered, take the documents to your bank to set up a separate checking account for your business with an initial deposit of $50–$100.

To manage your invoices, track expenses and pay yourself, use the online version of QuickBooks for as little as $11 a month. Most businesses fail because of cash flow problems, so tracking your accounting details is an important step to get right.

How to save:

• Skip the big expensive business checks; use the free checkbook the bank gives you.
• Opt in for online statements and decline paper statements.
• Consider accepting only cash or checks—it could save you hundreds or thousands of dollars a month in credit card fees during your startup phase. Most clients have access to online banking services that will send you a check through the mail for no charge.

Insurance

A typical policy should cover legal expenses in the event of bodily injury or property damage and also medical expenses resulting from injury to clients inside your facility. Policies vary from state to state and typically factor the facility’s size into the annual fee. In my experience a policy with $1 million in liability coverage and $100,000 of medical benefits usually costs around $450 a year.

How to save:

• Access discounted fitness insurance through your IDEA membership.

Lease and Initial Build-Out

Typically, a landlord will give you Tenant Improvement dollars based on the size of the space you lease. To maximize these dollars, keep your build-out simple. Remember that clients are investing in your

why,

not in how fancy a place you have.

How to save:

• Negotiate 1–2 months of free rent for build-out.
• Ask to roll your build-out expenses into your monthly lease payments if the landlord is building out your space.
• Maximize every square inch by skipping a big office, a front desk and locker rooms. Install two restrooms—one with a shower and one without—and allow room for a small storage closet.

Office Equipment and Branding

Instead of outfitting your office with new phone lines, computers and Internet access, simply use what you already have. Your cell phone can be used for incoming calls, accessing QuickBooks, updating your website and all your social media needs. For less than $100, you can set up an unlimited talk, text and data plan that will cover all your needs.

How to save:

• For only $5 a month, Google Calendar will give you an email address, an online calendar to track sessions and the ability to upload documents, such as an agreement and waiver for clients to sign.
• Start a free website on WordPress.com or tumblr.com.
• Get a variety of options for your logo for $299 from 99Designs.com.
• Since you’re using your own personal equipment, you should qualify for tax deductions. (This does not constitute tax advice; follow up with a tax professional.)

Creative, Inexpensive Marketing

Spend less time worrying about the steps just outlined, and focus more time—and the majority of your budget—on bringing clients in the door.

How to save:

• Make good use of social media. The beautiful thing is that, for the most part, it’s free. The key is to give away valuable information to your followers five times more often than you try a hard sell.
• Hand-write welcome, thank-you and birthday notes to every client who joins your community.
• Send your clients an email newsletter. The IDEA FitnessConnect platform includes a Client Newsletter tool designed to make the process of creating and managing e-newsletters simple for any fitness professional. IDEA’s award-winning editorial team provides the educational content, and you can customize your product in minutes. Visit your My Account page on www.ideafit.com and then click the Client Newsletter link in the Quick links section. MailChimp also offers a free newsletter service.
• Cross-promote your studio with local like-minded businesses that your clients frequent.
• Get to know your neighboring business owners by introducing yourself and inviting them out for a cup of coffee. Learn their stories, why they started their businesses, and the successes and challenges they encountered while building them.

Go for Your Dream

One final thought: Nothing happens unless you do something, even if you have an endless supply of money. The only perfect time to start a facility was yesterday, and the next best time is today. When you build your facility around a strong

why

, your clients will overlook your shoestring budget and embrace the experience you are creating. They will root for you to win by inviting their friends, trusting you with their fitness goals and continually reinvesting in you and the community you’re building.