Your opening roadmap is something you only get to do once. It’s how you open your gym for the very first time, and what that does to set up your business’s success right from the start. A quality roadmap can help accelerate business growth and new athlete sign-ups, but a bad launch can leave a sour taste in everyone’s mouths.
This is the entire roadmap that you need to launch your gym. When you “cut the ribbon” on your new CrossFit affiliate gym, it should be fantastic in all regards. We’re going to be sure you get to experience that.
What is a Roadmap?
You want to go on a road trip (or in this case, open a business), but you don’t know where you want to drive to. You don’t know which stops you want to make along the way. So, where are you going? How much fuel will it cost to get there? How much time will it take?
Okay, so a road trip is a simplified version of what a roadmap is, but the same principles apply. You know you want to reach a certain goal with your business, and a roadmap is the outlined steps that you take to get there.
There are specific steps you have to take for an opening roadmap, which is how you get from concept/business to a physical location that people can actually visit and use. That’s the tricky bit. Let’s talk about that and prepare you for it.
Opening Roadmap
Your opening roadmap differs from a business roadmap. The business roadmap is how you’re going to operate; the opening roadmap is how you go from a business concept to how you open the doors. The opening roadmap is a very involved process, but it does have an end date to it; a goal. Let’s get you situated.
Location Scouting
You know the saying: location, location, location. In real estate, it refers to where the home or building is located for ease of access and proximity to major destinations. For a gym, there’s a lot more that you need to inspect about a building before you ever think about signing a lease.
Building Code
Your building code might not be up to snuff. You can get information about a specific location from local government websites, or by visiting a local Chamber of Commerce. There are some buildings that are zoned/coded to specifically not allow classes to be held. How ridiculous is that?
It’s pretty insane, but it’s also a reality. You have to make sure physical fitness and group classes are permitted in the building before you consider buying it.
Noise Levels and Vibrations
Gyms are noisy. You can also operate them 24/7, which might be in your best interest if you’re in a widely traveled city. So how do you approach this? You need to make sure you’re zoned/coded in a spot of the city that isn’t a “quiet’ zone, as they put it in the Affiliate Playbook.
Be sure that your business is allowed to make noise, and even if it is, that it’s soundproofed. Just because you can make noise doesn’t mean people won’t complain. Make sure you’re not too close to a residential area and understand the noise ordinance before you lease the place.
Echoing
While you’re doing a noise test, yell a bit, jump around, and test for echoing. You’re going to fill the space with machines and possibly wall art, basically things that will absorb noise, but you still want to know how loud it’s going to be the first time someone drops a weight plate.
Drop Tests
Speaking of drops, you should do a drop test. The test isn’t to make sure the floor isn’t going to cave in (although that would be good to know as well); it’s to test the level of noise, echoes, and basically everything that’s going to happen in your gym anyway. It’s going to be a noisy place, so you might as well know how it’s going to sound now.
Zoning and Local Government
Local government, believe it or not, is there to help businesses. Your business means more tax money coming into their city, so they need you. You want to contact your local Chamber of Commerce and inform them that you plan to open your business. There are plenty of folks there that can help you with every minute detail you might not think of, such as how large your grand opening gathering can be, any zoning issues you might not know about, and more.
Physical Location Rating
Now it’s time to find out more about the actual structure that you’re going to be using for your gym. When was it built, what’s it made of? Those kinds of details. You can scout multiple locations and put them on a list, then rate them. These are questions you can ask yourself and answer to rate the location.
Who Are Your Neighbors?
Do you have good businesses nearby? Are the owners friendly? Is it all housing near your gym? There’s a lot that goes into choosing a location, and one of those aspects is not dealing with aggressive, complaining neighboring businesses while you’re there. This is about building something grand, not volunteering for headaches from other local vendors.
How Visible is the Location?
Is your location tucked away, or is it visible from the road? Can you expect people to find your location and just walk in, or is it going to require a lot of marketing to get in front of people? This is also important for people who sign-up online and then need to find the location. The harder it is to find the place, the less likely they’ll be to return.
Is Vehicle Traffic Easy or Difficult?
Do you ever see a business tucked into a weird spot on the side of the road, and you wonder how cars even get in there? Think about roads, traffic patterns, and how they all work to either make your business more or less accessible by car. If you’re in a city with a lot of public transportation, think about your proximity to the bus stop or train station.
How Many Parking Spots are There?
Ideally, your business will come with a parking lot. How many spots are there? Is the building solely for you, or is it in a strip mall? Will it be enough parking for the level of growth you want to reach? The parking also needs to be accessible, by the way.
Are Local Businesses Doing Well Here?
If there are other businesses in a strip mall, the property owner should have metrics about foot traffic, local vehicle traffic, and other scraps of data you can use. You can also just walk in and ask shopkeepers. “Hey, I’m thinking about renting the vacant spot next door. Do a lot of people come through here or is it kind of dead?”
As long as you’re not a competitor, shop owners will happily list their grievances. After all, you’re also a small business owner—there aren’t a lot of people they can talk to that will understand their complaints. You’ll find that fellow small business owners are quick to open up about this sort of stuff.
Is This in Proximity to Other Affiliate Gyms?
While you don’t have to keep a certain distance from other affiliate gyms, it’s important to know that you could impact their business as well as your own if you’re too close. It’s like seeing two chain restaurants on the same block. Why? It doesn’t make any sense. You want there to be a respectable amount of space between you and the other gym. Also, it’s important to go and talk to that other affiliate gym owner once you’ve signed a lease so you can introduce yourself. They could prove to be a viable asset in the future, plus it’s always good to have a friend in the same exact business as you.
Market Research
Researching your market is critical to choosing a solid location. Without knowing the surrounding market, you could be introducing a product (your affiliate gym) into an area that has no need for one. It’s easier to sell to people who know what they want, rather than sell something that they know they don’t want. This is what you have to know about marketing.
Traffic Density
Traffic density is a metric for both foot traffic and vehicle traffic (on main roads) to let you know how many potential passerby customers you have. You might notice that if you’ve ever looked into billboard advertising, you can find metrics about how many cars pass by every single day, or how many people would see your advertisement in a two-week span. That’s traffic density, and it’s difficult to gauge. Traffic density does not specifically equal attention, so you have to find high traffic density just for a low turnout. It’s a gym; people aren’t doing double-takes except for the first time they realize your business is there.
Demographics
What are you charging for monthly classes? What is it going to cost for the average median household income? If your demographic makes $20,000 per year less than the city next to you, you can’t expect to find the same success with the rates that are found in that other city. You have to give value while also making a profit, and that can be difficult in low-income areas. CrossFit is notoriously one of the most expensive types of gyms to attend; we want to include, not alienate. Consider your prices when matched with the demographic of the area.
Average Market Rates
Every area has average market rates, and yours will tell you if the company or owner that has the space for rent is trying to rob you blind (in terms of pricing). Find out what other buildings in the area are being rented for, and consider location, traffic density, and ease of access for both pedestrians and vehicles. This includes public transit as well. This is one more reason that it’s really nice to have a broker on your side to help you determine the worth of the building and save you time.
Market Demand for a New Gym
Is the local population already having their needs met with current gyms or fitness studios? How many gyms have closed their doors in recent years? These are questions you have to ask yourself before deciding on an area. Additionally, look at market growth in the area. If a gym closed two years ago, but the city has seen a 8% population increase YoY since, it could be an up-and-coming area. At that point, there’s a diamond in the rough, and it deserves your research to be able to find out if it’s worth your time and money or not.
Negotiating a Lease
Negotiating the lease is a good point to be at—it means you’ve decided on a location, but now you have to figure out how much you’ll be paying. Commercial real estate is an entirely different beast to the personal property market. If you’re a homeowner, this process is going to be nothing like when you bought a home. This is what you need to know.
Brokers vs. Owner
If you use a broker, they have to uphold your best interests. It’s actually a legally binding part of being a real estate agent. If they don’t represent your best interests, their career is in jeopardy. However, broker fees can rack up quickly. You could also rent directly from an owner, but the owner is less likely to know the true cost of the building, and a realtor may be able to score you a better deal with their experience and knowledge.
Disclosing Intended Use
Bear in mind that when you rent a space, and you have the right to transform it as you see fit, you have to notify the landlord prior to signing the lease. Even if you’re in a state or municipality where you don’t have to, it’s a good idea to do it and avoid legal issues or problems with the landlord. This can affect rent prices, and will also let them check with the architect to make sure any changes you’re making won’t cause structural damage or integrity issues.
The Lease Signing
Now that you’re signing the lease, it’s time to know what to look for and why your term length is so ridiculously important. There are also different kinds of leases you should be aware of: commercial real estate can get wild.
Total Term Length
Assuming your business lasts for more than a few years, you will scale and you will grow. The last thing you want is an undefined amount of time in a gym that you’ve meticulously built. Most contracts are for 2-3 years, but it takes about 12-16 months to build up your gym’s reputation and revenue. Be sure that your term length represents your vision. If you’re done the research and you know you stand to make money, go for a longer loan like 4-5 years instead of a short-term loan.
NNN Lease Type
A triple net lease is where you also pay for taxes, repairs to the building, utilities, and everything in between. The rent is determined and often lower than a gross lease rent. This is good if you can plan out your expenses in advance and know what your lease plus expenses will compound into. Plan carefully and accordingly before going into one of these lease types.
Gross Lease
You won’t run into these often. A gross lease means you pay a flat rate, and the landlord pays for utilities, such as water and even electricity. These are unlikely especially with energy costs in today’s day and age.
SMI Lease
A standard market increase loan is regular on the market increase per year. Essentially, your lease changes and increases with the way the market flows, and your landlord can increase your rent accordingly every single year without getting a sign-off. Though they must notify you of the change. The changes are usually given in a range, but just assume they will exercise the highest possible range that they can.
Wrapping Up and Setting Up
You know what you need to do, now it’s time to put it all into action. Start your business roadmap to make that CrossFit affiliate gym dream a reality. Launch day is important, and while you can rebrand, you can’t redo the very first time you open up a gym.
Be sure to have a solid business plan in place to accommodate the hectic schedule that comes with a successful first-day launch, and be sure to read our other articles on how to successfully launch and run your CrossFit affiliate gym.
