Overcome Your Fear of Buying a Health club, Fitness Center
or Gym in 3 Easy Steps with Jim Thomas’ Fitness Management & Consulting
If you want to own your own health club, it is easier to buy an fitness
business than it is to start you own gym business from scratch. An established health
club allows you to skip past the startup phase entirely, which is where the
majority of all new gyms fail. If you buy a health club then you can concentrate
your efforts on making your health club larger and more profitable.
Buying a health club does not have to be a challenge. You want to avoid
overpaying for the business or buying a lemon. The easiest way to avoid this is
to follow these three steps in buying your own business.
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STEP 1: Due Diligence
The first step is due diligence where you determine whether or not this gym or
fitness center is one you want to buy and at what price you are willing to pay
for it. Find out why the seller is selling the health club. This may involve talking to the employees,
suppliers, and customers. Once you are satisfied that the reason is not to flee
from something negative that you will be inheriting, you can do further due
diligence.
Your examination of the health club will start with analyzing the last three
years of financial data. You should uncover any pending lawsuits, relationship
with supplier and customers, intellectual property rights such as copyrights or
patents, and any potential liabilities.
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STEP 2: Make Offer
There are formulas that are commonly used to value a health club or gym and
this should be the starting point to determine how much to offer. The value
needs to be adjusted to account for any information uncovered during the due
diligence period. Having an accurate picture of the value of the gym will help
you to decide whether or not to proceed and the maximum price you are willing
to pay. Once you have arrived at a price you present the seller with a letter
of intent. This letter of intent will detail the price and terms in which you
will purchase the fitness business. Once both parties agree, a purchase and sale
agreement is drawn up for both parties to sign. The purchase and sale agreement
can be quite lengthy because it itemizes every aspect of the sale. This step
usually involves hiring an accountant and a lawyer to assist you in the
process.
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STEP 3: Arrange Financing
The last step in buying a health club is financing. There are many sources
available that you can tap to put together the financing. These sources include
family, friends or banks. Whatever the source of funds, lenders will have
requirements that you will need to meet in order to be approved for the funds.
They will require you to have enough money available for the down payment as
well as have enough adequate working capital to maintain the health club. You
can either pay for the closing costs out of pocket or arrange to have them
included in the amount that you are financing.
Owning your own health club is something that many people dream of
accomplishing. Buying a health club is one way to make this dream come true. If
you follow these three steps you will be on your way to owning your own gym.
Fitness Management & Consulting
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