• Happy young gymnist in this guide to starting a childrens gym

The Entrepreneur’s Ultimate Guide to Starting a Children’s Gym

Opening any small business is an exciting, yet kinda sorta scary experience. The cold truth is that nearly half of small businesses in the U.S. will close within five years of opening. That statistic isn’t meant to scare you. It’s meant to emphasize how critical planning and teamwork is to building a foundation for success that will keep your business growing for as long you want.

The team at Jackrabbit, and our co-author Frank Shalein, CEO of 3rd Level Consulting, have been privileged to work with thousands of gymnastics studio owners. We’ve seen how committed the most successful ones have been in gathering the information they needed in order to make thoughtful decisions before they leaped in.

The strongest foundation for success begins well before you open your doors. As a budding gym owner, you have numerous decisions to make. You don’t have to figure this out on your own. We’re putting together this series of articles that dive into the most eleven critical aspects of starting a children’s gym to help you out. Our article series (when complete) will cover:

  1. Clarifying your vision
  2. Handling the big legal stuff
  3. Understanding the financial opportunity of your market
  4. Financing your business
  5. Facilities and equipment – what do you need? What can you afford?
  6. Oh, yes – there will be people involved as well!
  7. You love your gym studio – but you still need a healthy work/life balance
  8. Marketing, marketing, marketing
  9. How to delight your customers and why the success of your gym depends on it!
  10. Wow – all this and we’re just now getting to actual gym operations
  11. Last but not least: Holding on to your vision

Be sure to subscribe to the Jackrabbit Class blog so that you can receive regular updates as we publish each article in this series.


1. Clarifying your vision

You probably didn’t decide to open a children’s gymnastics studio out thin air. Something is driving you. Something that perhaps drove you into gymnastics. You also probably have ideas of what kind of life you’re looking for as a business owner. What’s motivating you to move from your current situation into starting a new business? What is your why?

That’s the reason for the first step for any new business owner: clarifying their vision of what their business will do and who it will serve, as well as what they want their role in the business to be. In this article, we help you explore:

  • How to differentiate your gym. How to identify what unique niche or need your gym will fulfill. The answer to this will come at the nexus of your own passions and skills, plus what your local market needs or wants (even if it doesn’t know it yet).
  • What type of business model will put you on track to reach and stay in the “profit zone.” If you come up with a hyper-niche market that, for example, inspires you to open a gymnastics studio for special needs kids and adults, you need to assess what sort of business model will work for a smaller target market.

We’ll help you with what questions to ask yourself, what information to research about your area and demographics, and guide you through some variables in different business models to consider. The goal is for you to have a clear vision about what kind of gym you’re opening, for whom, and what its basic model for making money is.

2. Handling the big legal stuff

There’s no getting around it. Setting up and running a business means you now have a variety of legal issues that must be addressed. In this post, we’ll cover these three legal areas:

  • What’s the legal structure of your business? This is different from your business model, which defines how you’ll be earning money. The legal structure of your business is the formal entity that exists as a matter of law. It pays taxes. It can sue and be sued. How you decide to set up your business has a great impact on all these legal issues. We’ll get into common legal forms and why you never want to be a sole proprietor. (Don’t worry; that doesn’t mean you can’t still be the shot-caller.)
  • Licensing and zoning issues, which can affect where you locate your gym, what licenses you’ll need to operate it, and whether any of your staff require certain professional licenses.
  • Insurance requirements and needs. You need more types of coverage than you think to protect yourself, your business, and your team — and to meet legal requirements.
  • Any potential intellectual property issues, such as protecting your gym name and logo.

Last, this article will walk you through how to put together your own “board of advisors.” No one runs a successful kid’s gym alone. You’ll want to have the right team of professional advisors to guide you through these legal issues and more.

3. Understanding the financial opportunity of your market

During the vision stage, you researched your local market to understand a bit about the opportunity and challenges it offers. In this post, we get into different pricing models and how to select the one to guide how to set your fees. You’ll understand how to assess external variables, such as competitor pricing or industry benchmarks. You’ll also understand what variables in your own business impact how high or low you can set your prices, including how your marketing builds the “value perception” in the minds of your potential families. Get professional assistance in developing your “market share.” You will then be completely prepared for any landlords, investors, or bankers who will ask how you got your numbers. Be ready with your market share analysis, breakeven, and your first three years’ pro formas, and your industry-specific business plan.

This article will also touch on how to justify pricing, raise pricing, and how to use discounts effectively and strategically without undermining your gym’s “value perception.”

4. Financing your business

Financial mismanagement is the key driver of that ugly statistic about the high failure rate of small businesses. Mastering financial management of your gym studio is critical. If you didn’t skip the post of addressing the legal issues of opening a new business, you’ll probably notice that your board of professional advisors is filled with people with financial management expertise. (If not, go back, read that article, and adjust your board membership if necessary.)

However, as a small business owner, it’s your responsibility to understand your own finances, financial needs, and financial expectations. You can’t outsource that. In this post, we go over:

  • How to create start-up and operating budgets
  • Standard and unique options for raising capital, both at starting up (you do not want to finance this through credit card debt) and when you might need some extra capital down the line
  • The monthly financial statements you must have and how to read them
  • Challenges and tips of managing your cash flow
  • What business metrics to watch that indicate how the financial health of your gym is trending

No business can sustain itself if it’s not financially sound. You’ll learn in this article how to set some expectations for the first couple years of operation and how to plan out when you should break even, and then start to realize some profit. Then, how to identify and plan opportunities to expand. Also refer back to section 3.

5. Facilities and equipment – what do you need? What can you afford?

You need to have a solid vision for your gym to start working out location and equipment issues. The size of the facility you open sets a minimum boundary on your recurring costs and an upper boundary on your gym’s main source of revenue – providing classes and training. The location of your facility is likely critical to its ability to attract and keep students. We’ll explore all the issues related to estimating what size range of facility you need to realize your vision, how to assess the pros and cons of different locations, and how facility size impacts your financial projections.

The cost of your equipment is driven in part by the size of your facility — that’s obvious. However, there are other equipment cost issues to consider, such as quality and longevity, and whether could having some unique equipment be part of your differentiation from other gym studios. Where can you find some economies when buying equipment and where should you never pinch pennies.

6. Oh, yes – there will be people involved as well!

Staff. You’ll need staff. Family who plan to work at the gym are still staff. Labor is typically a business’s largest monthly cost, even above facility costs. Of course, people aren’t just a cost. In a personal services business like a gym studio, the quality of your gym’s services and reputation depends enormously on the quality of your staff — and your ability to hire, train, manage, and lead them. In this post, we’ll go over:

  • What sort of staff you need, what roles can you outsource or may want to contract, and why you need to distinguish between roles that are cost centers and roles that revenue-generators.
  • What legal issues to address with your attorney with regard to hiring, firing, benefits and management of employees — including what kind of contracts and policy documents your gym should have.
  • How to recruit and retain the best staff. What sort of internal training programs do you need? What role will have responsibility for HR issues and staff happiness (and who can fill it)?
  • How to build a formal and informal company culture that supports your vision of operational excellence and customer happiness.
  • The difference between solid management and effective leadership, and why you need to provide both.

One area that’s not touched on in detail in this post is how to inspire and empower your staff to be gym ambassadors and producers of delighted customers. Creating and sustaining customer delight is so pivotal, it gets its own article! Designing and tracking each staff members’ Employee Life Cycle is critical to success – we track the progress of our students, and we must do the same for our valuable staff members who deliver our services.

7. You love your gym studio – but you still need a healthy work/life balance

It’s no accident that we’re putting the health work/life balance article in the middle of this series. Maintaining this balance is not a “nice-to-do” or back-burner issue. If you place attending to your personal life and happiness on the back-burner, you won’t notice it burning away your energy and enthusiasm for your business. When running the gym studio takes all your time and focus, it negatively impacts both your work and your life. Maintaining a strong work/life balance won’t happen organically. You need to plan for it, which includes:

  • Distinguishing between the high-value tasks that benefit most from your attention and those tasks that need to get delegated or automated.
  • Learning how to trust (and verify) your people.
  • Tell the difference between bad stress and good stress and
    • How to leverage your positive stress into positive results
    • Tips for relieving bad stress – even better, how to avoid bad stress in the first place!

You have four energy categories (mental, physical, emotional, spiritual) that need recovery time from hard work, just like the body, to achieve peak performance. If you don’t manage your work/life balance in a way that keeps you motivated and engaged in your gym studio, you’ll undermine every other aspect of operating a successful business. In addition, become a student of personal organization — it will lend immense benefits to every phase of your life.

8. Marketing, marketing, marketing

Your gym may be beautiful. You may have the most talented, empathetic instructors, coaches, and trainers to be found. None of it matters if the right prospective families don’t know about your gym. Marketing is the fuel that drives your business. The winners learn how to do it. The others simply “drift” in the marketplace.

The great news for you as a small, local business owner is that the opportunities to mass-market your business to your targeted market has never been greater (thank you, internet) even as the costs of marketing have come down. The challenge is that there are so many marketing strategies and tactics, both on and offline, it can be overwhelming to know which ones to use when, which are must-dos, and which don’t make sense for your gym.

In this article, we’ll break down some of the most effective, high ROI marketing methods available to you, including traditional and digital marketing techniques, word-of-mouth marketing, social media, and reputation/review sites. You’ll also learn some tips for optimizing your local search results (nearly half of all Google searches are someone looking for local resources – that includes a local gym to send their kids).

You’ll also learn some key sales and marketing financial metrics, such as prospective student pipeline, cost of new student acquisition and student lifetime value. Which brings us to the issue of…

9. How to delight your customers and why the success of your gym depends on it!

Student lifetime value. The longer a student stays at your gym, the more revenue that student generates for your gym. It’s an idea so obvious it often goes overlooked. A long-term student and family also function a bit like compound interest. The longer the student is with you, the greater the ROI they provide. That is, you’ll likely generate more revenue from a student in their fourth year with you than how much they generated for you in their first. We’ll explain why in this article.

We’ll also delve into the key components of creating an amazing day-to-day experience that instills gym loyalty in students and families and builds a sense of community among all your families. These components include:

  • Laying out a formal vision and plan for inspiring customer delight
  • Where and how will your gym provide an exceptional experience for students and families
  • How easy can you make it for students and families to attend your gym and handle the related admin tasks, like enrolling in classes and paying their fees
  • Designing policies and process to address concerns, complaints, and even seriously plan for those unhappy parents when they show up (and they do, in every business)
  • How to transform happy students and families into gym ambassadors and referral sources that keep your prospective student pipeline full
  • Training and holding staff accountable for doing their part to execute on your customer delight vision and plan

Providing high-quality gym facilities and instruction are table stakes for operating a financially sound gym. If you want a gym that’s thriving with both financial and personal rewards, using top-notch customer service to turn customers into a tight-knit community is your secret weapon. Finally, let’s remember that you have three sets of customers – the children, the parents, and your staff. Designing successful “experience pathways” for each of them is vital.

10. Wow – all this and we’re just now getting to actual gym operations

Operations will become your day-to-day concern. Yet setting up operations starts at a much higher level. You can’t manage daily operations without first having put in a lot of grunt work to:

  • Set up phone and internet systems, installing and integrating software
  • Write operational policies and manuals on everything from gym safety and equipment maintenance to canceled class and absent student policies

There are all sorts of detailed decisions you have make and then put down on paper so you can act consistently as a team. This article will give you some operations set-up checklists so important minutiae don’t get overlooked.

Managing operations also requires identifying key functions and tasks, assigning responsibility for these functions and tasks to different roles and tools. Functions such as:

  • Scheduling classes and staff
  • Managing classes, families, and students
  • Getting paid and paying your bills
  • Facility and equipment management
  • Product inventory and sales
  • Recordkeeping and admin

You’ll have policies and manuals outlining processes and requirements for these functions. Running a small business requires a lot of manuals. There are small businesses that lurch from day to day, fire to fire. Then there are the successful small businesses that have clear systems in place that let everyone know exactly what needs to be done.

11. Last but not least: Holding on to your vision

As important as day-to-day operations are, you never want to lose your vision of what you want your gym to be and how you want it to grow. As the gym owner, the onus is on you to guide your gym and its people towards that vision. In this final article in the series, we’ll get into

  • Detailing some of the tools and tips for staying on top of your gym’s finances and operations to ensure financial stability and opportunities for growth.
  • The kind of on-going analysis of your gym, your market, and the industry you need to do to identify and be open to new opportunities to grow your gym.
  • The different business growth phases you want to see your gym pass through and how to assess when your gym may be ready to take the next leap and how to ensure your gym is positioned at each phase to move successfully to the next phase.

Each gym owner has different dreams for their business. Perhaps you have visions of growing into a string of gyms across the state or even the country. Perhaps your vision is to develop an instructional system you can market and license to other gyms and coaches. Perhaps you want one, thriving gym studio where you can eventually transition into a more hands-off owner to enjoy its financial rewards. Whatever your vision, you need to proactively pursue both by staying on top of what’s happening at your gym today and understanding how to take next steps.

Starting a children’s gym isn’t child’s play

It takes considerable work to set up a small business. Tremendous effort is required even before your gym studio even opens its doors. Yet, we see how committed and motivated gym owners are to providing their students with a healthy, fun environment, which makes the business-side of owning a gym completely worth it if that’s your passion.

That’s why we’re putting this series together to help people thinking about opening up a children’s gym, as well as those who have a gym that may be struggling and need some guidance.

At Jackrabbit, we can’t give you the right answers for your gym. What we we can do is help you ask the right questions and address the critical issues you need to set a foundation for success. A really good first step is contacting industry experts such as 3rd Level Consulting with specific questions. You can even attend their trainings aimed at entrepreneurs and gymnastics school owners. Whatever else you may do – make the most of the educational resources that are out there. Because the better informed you are, the wiser your decisions will be, and the greater your chances for success.

ABOUT CO-AUTHOR FRANK SAHLEIN

Frank Sahlein is the CEO of 3rd Level Consulting, former co-owner of the Wings Center (Idaho USA), and developer of the SmartEDGE Resources online business management platform. A former gymnast and coach, Frank now travels globally to work with both child activity center associations and individual clients. The 3rd Level Consulting team provides an array of professional business services, including Membership subscriptions, business start-up or expansion planning, valuations, buy/sell services, training events, and more.

 

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About the Author:

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After studying graphic design at the University of Georgia, Jill held several positions in media and marketing including Art Director, Editor and Marketing Director. As a student of dance, she has spent plenty of time in children’s activity centers and puts that experience to work for her in the work she does with Jackrabbit. In addition to her interest in dance, Jill also enjoys sports, gourmet cooking, entertaining, singing and spoiling her five grandchildren.

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