Entry paths for starting a boutique fitness studio
By Bill Pryor- Founder of Spynergy Consulting
So you want to own your own business? I've owned my own studios and I've also worked with literally hundreds of studio starters. I've seen some folks crush grand slams and I've seen others struggle mightily. There are no guarantees in business, but one thing you CAN do is minimize your risk by careful planning. If you want to own and operate a fitness studio business, one of the very first things you need to think about is your entry path. You have three choices.
There are many examples of successful startups, successful franchisees, and happy studio buyers. On the other hand you don't have to look far to find struggling launches, distraught franchisees and regretful studio buyers. The simple reality is no matter how you start, operating a successful small business is a challenge.
Which is the right path for you? I believe that your background, skill sets and temperament will tend to make you more suitable to a) buying into a proven system, b) building something from scratch, or c) purchasing an existing business.
If You Decide to Start from Scratch
- You have total freedom to implement your own personal vision
- There are no marketing or royalty fees
- You will be deeply involved in every aspect of the business
- You are free to change directions based on trial and error
On the other hand...
- The learning curve is steeper without proven examples
- There are no colleagues to compare notes
- Some key cost areas may be more expensive
- You start out with zero brand recognition
When You Buy a Fitness Studio Franchise
- The considerable work of building a “brand” has already been done.
- There is so RFQ or search process for suppliers and technology, the franchise company does that.
- There is usually strong support in choosing locations, based on hard data
- Design and construction plans are in place…this is the largest startup cost
- You are able to view financials of like businesses
- A grand opening plan is in place and has been tested
- Marketing and pricing best practices are in place
- Brand recognition is already in place due to other franchises
- You have a built in community of potential buyers if you are successful and ultimately decide to exit.
- When you decide to exit, other franchisees are good potential buyers
On the other hand...
- You need to choose carefully on your franchisor partner, some are better than others
- Potential profit is impacted by royalty and other fees
- You may have operating restrictions (for brand consistency) that you don't like
- You may not have freedom to switch gears on the business should conditions in your area be difficult
When You Buy an Existing Studio Business
- Brand recognition is in place
- You get to see detailed historical financials
- Location and staff are known and secured
- Seller may be incentivized to stay involved to help
On the other hand...
- If the financials are strong, the cost will be high
- There are often unknowns you find out about later
- Hard to know when a business is mature
So, which is the right entry path for you? In general, people with a strong personal vision for their business, and also with a tolerance for risk, lean towards startups. Often (but not always), a startup entrepreneur has some similar business experience so the prospect of learning every aspect of the business from scratch is not as overwhelming.
People who are comforted by a proven track record, and who like the idea of being on a team that is providing guidance lean towards franchising or toward purchasing an existing business. These approaches also short-cut a lot of the learning processes.
Any one of these approaches can be successful. It is important to consider each of them carefully and take a hard look at your own experience and skill sets. As in any small business, owners of course need to be resilient, not easily discouraged, and relentlessly immersed for the business to be successful. Having watched literally hundreds of studio owners operate, there is no question that their skills and ability to execute are critical — regardless of what the studio concept is, or where it is located. In general, it's not that surprising but bad ownership creates bad businesses….great ownership creates great businesses. Choose your entry path carefully.
About the Author
Bill Pryor is the founder of Spynergy Consulting. He launched the first east coast Cycling Studio in 2005, and co-founded CycleBar, the largest cycling studio franchise company in 2014. He advises boutique studio owners on startup, operations, and valuation and publishes the industry blog Boutique Studio Adviser.