Location is crucial. As you often hear; location, location, location. The vast majority of your customers will come from within a five-mile radius. It makes sense to make the effort to find the ideal location. Ideally, you’ll be able to find a five-mile radius with no other similar businesses as well as other high traffic businesses nearby.
I searched many locations until I found a spot that I thought would be most advantageous to our business model. Orlando Barbell is near a highway exit which is also relatively close to the University of Central Florida (about 5 minutes away). We’re also within a half hour from Full Sail University (a private production focused university), Seminole State College and Valencia College. The benefit of this is that we have a constant flow of members. The negative is that most of them don’t stay for long since they graduate and/or go back home.
Just like with paying rent as opposed to buying where you live, leasing to buy a location would be ideal. You’re essentially throwing your money away by renting. At the time Orlando Barbell opened I didn’t search for potential locations to buy, but wish I had. This way, when you’re ready to retire, you could potentially sell the entire location. If you’re renting you can only sell the name, assets and memberships.
Over the course of almost 19 years I’ve spent close to $650,000 on rent. This would have been more than enough to own a building by now. Now we have another dilemma. New owners recently bought the business center where Orlando Barbell is located. Like many businesses are dealing with, they’re going to increase the rent by 20%, which is $600.
I explained to him that gyms aren’t profitable businesses and that in order to afford the rent increase I’ll have to increase the membership dues and hope for the best. It’s looking like I may need a back up plan as well.
The only constant is change.
-Heraclitus
https://www.elitefts.com/22-tips-to-open-your-own-small-business-ebook.html