10 Steps of Opening a CrossFit Box Business
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Ready to be your own boss? Ready to get paid for getting people in shape? Ready to set your own schedule and take vacations whenever you want? Looks like it’s time to start a CrossFit box.
Unless you’ve been living under a rock for the last 20 years, CrossFit has become one of the most successful athletic brands in the world. Their brand’s value, at time of writing, is nearly $4,000,000,000 (that’s four billion my friends). If you’ve been thinking of opening a CrossFit box, there are quite a few steps you need to take in order to get your ducks in a row (now the picture makes sense, eh?).
The first part of this blog post will discuss starting your CrossFit box, legal requirements, etc. The second part (and this entire blog post) will go over the logistics of running & managing your box.
Part 1: Steps to Open Your CrossFit Box
1. Become a CrossFit Box Affiliate & Get Certified
We’re sure this is a dumb statement, but make sure you’re completed your CrossFit training certification. You can’t teach at an affiliate without being a certified, and as the owner of your box, you’re most likely the head trainer as well. Once you’ve completed your training sessions, it’s time to become a CrossFit affiliate.
Just a suggestion, but it’s best to work as a CrossFit trainer for awhile before you branch out and start your own box. As with any business, you’ll gain valuable experience from working in the business before starting your own.
Once you start growing and hiring more trainers, don’t stop working as a trainer. Sometimes when you’re a business owner, you forget what the day-to-day grind is like. By working in all aspects of your business, you’ll stay tuned to what needs to be changed, fixed, etc. The best and most respected bosses are the ones that have “done it all” before.
2. Register Your Box with Your Secretary of State
We’re not going to go into much detail here. Before you can start a CrossFit, you need to establish yourself as a business entity. That means registering your box with your Secretary of State. You’ll need to get a EIN tax number from the federal government, as well as a state tax ID number from your state, and PERHAPS a local tax ID number from your city. Do your research here, we can’t help you out much. Just make sure you’re registered and legal. There are consequences for running illegal (unregistered) businesses.
3. Purchase or Negotiate Lease a Building for Your CrossFit Affiliate
This is going to be one of your biggest financial expenses during your journey to become a box owner. Take time to find a good location (use the CrossFit affiliate map to make sure you’re in a nice market). Don’t try to save money by choosing the cheapest location. If your box is located 15 miles out of town, you’re going to lose business. Pay the extra money, and be in a better location. Look at some of the most successful boxes in the USA and many of them are located in some very prime real estate. Investing in a good property could make the difference between being a big success and just getting by. Many CrossFit boxes choose to be located in industrial parks and factories, but there’s something to be said about the business benefit of sidewalk traffic. Whichever way you go, just make sure you put lots of thought into your location. It’s going to be hard to move once you’ve got everything in place. Make sure you negotiate to get the best terms possible. Most foxy landlords are going to give you a high price and expect you to negotiate it down. If you don’t negotiate and you take the first price they offer, they’re going to make a killing off you.
Also, make sure you have bathrooms and SHOWERS at your facility. No one wants to drive home soaked in sweat. Take the effort to put showers in your facility and your members will LOVE YOU for it.
Most new gym owners lease/buy a facility that is too big (too expensive) for their current budget, and end up having to shutter their doors after a few months. It’s always a better to have a smaller facility, with classes that are more crowded, than to have a huge facility that seems empty even if you have a 20-person workout in session.
4. Buy Membership Waivers and Fitness Insurance for Your Box
One requirement for becoming a CrossFit affiliate (and having a commercial lead) is that you need to be properly ensured. CrossFit provides their own in-house insurance option, Risk Retention Group. For a box earning less than $125,000 per year, your annual insurance premium won’t even hit $2,000. That’s pretty damn good! There are some other options for insurance as well, as such Affiliate Guard or local commercial insurance providers. Once again, just do your research. Starting a business is a long process. And it should be. Trying to start a business before you’re ready isn’t a smart choice. Being insured will help you sleep a little easier. You’ll have the comfort knowing that if anything were to happen at your business, you’re not going to be selling your personal house to pay for it. Business insurance can get expensive, but not having insurance can worse.
5. Design & Build or Buy a GOOD CrossFit Website
Please, for the love of God, pay someone to make you a nice website. Do not use some free website design service. Nothing looks worse than a poorly designed website. If your website looks cheap, what does that say about the quality of services that you offer?
There are numerous box website design companies out there; BoxAlly, PoweredByAwesome, 321GoProject to name a few. Most offer their services for a reasonable rate. You might think $3000 for nice website sounds pricey, but when it brings in 100s of new members because it’s easy to use and accurately depicts your business, it’ll pay for itself in no time.
That free website builder your nerdy cousin told you about is going to produce a crappy, disgraceful website, and you’ll pay for it in the end. Also, if you have a horrible website, your current clients will be embarrassed to show their friends the website.
We’re big fans of using the WordPress CMS. The website you’re reading right now is build on the WP platform. Using WordPress makes blogging super simple, and everyone knows that weekly blogging increases search engine ranking.
Part 2: Running & Managing Your CrossFit Box
1. Use a Business Plan Template to Plan Your CrossFit
The IDEA of owning a CrossFit box is much different than the REALITY of owning a box. Are you prepared for the ups & downs of being a small business owner. What happens if you lose half your members to a competitor? Do you know how you’re going to handle these situations?
Take a day and fill out the business plan template for CrossFits. If you take the time to fully-answer every question, you’ll be in a much better spot as a future box business owner.
Even though you might think your fitness box business will be over capacity the second you open for business, that’s usually not the truth. It’s going to take time for your business to grow and increase membership, and you need to have a plan for building your business. Take time to work out a thorough marketing plan, taking into account long-term profitability. How many members do you need to break even? How many members until you need to open a second location? These should all be thought out well before opening the doors.
Marketing is an integral part of any business, and is the lifeblood of continual membership growth. Word-of-mouth advertising is great but it’s also wise to increase your reach by employing other forms of marketing.
2. Figure Out Your CrossFit Box Business Expenses & Profit
How much does running a CrossFit cost? Good question. Once you have your business plan all worked out, it’s time to think about your financial requirements and how much it’s going to cost to open your CrossFit. Remember, CrossFit isn’t a franchise. Each CrossFit is free to run itself under it’s own set of rules. That also means there’s no financial assistance from HQ. How much is rent? Utilities? Trainer wages? Insurance? (What, you DON’T have insurance?!? Get it now!) Click this link for the financial projection spreadsheet for CrossFits.
First and foremost, sit down with your computer, open an excel file, and fill in all your monthly expenses. Every possible dollar that you’ll be spending per month to keep your business afloat. We’re talking internet service, land-line phone number, building security fees, rent, insurance, utilities, etc. Absolutely everything! If you’ve got trainers to pay, make sure to figure out how much you’ll be paying them and how many hours they will work per week. Don’t forget about those tiny hidden businesses expenses, they start to add up.
Once you’ve got these numbers worked out, compare this monthly fee to your monthly revenue. Calculate your estimated monthly membership levels and see how many months you’ll be operating in the negative until you finally make a profit.
Lastly, don’t quit your day job just yet. If you’ve got benefits from your current employer, stay with them until you’re making at least 2X from your fitness box business as you make from your day job. Why 2X you ask? Well, full-coverage health insurance can cost over $2,000 per month. Having it come out of your corporate paycheck makes you never realize the true cost. Once you need to start paying it out of pocket every month, you’ll see just how expensive health insurance can be.
3. Set Up Your Studio with Gym Management Software
You’re just about ready to start making some money as a CrossFit box owner. However, unless you plan on using an Excel spreadsheet for the rest of your business days, you’ll need to invest in some gym management software. There are quite a few out there, namely: Wodify, ZenPlanner, MindBody, just to name a few. Invest in a quality program that is going to grow with your business. Good gym management software should let you keep track of member information, set up EFT billing, send out email blasts, curate automated Facebook posts, and more. Once again, don’t skimp on the cheapest option. You’ll end up paying for it in the future.
4. Create Your Weekly and Monthly Workout Schedules
Now you get to the fun part of owning a CrossFit; creating the workouts and schedules. Sit down with your trainers and figure out when the best class times will be. Do you want to do some morning classes for those corporate workers who can’t come at night, what about a midday class to focus on the retired baby boomers that want to get in shape. You don’t want to have empty classes, but you also don’t want to have WODs so busy that you have to turn away members. Most gym management software will include some type of scheduling tool. This will give your members a way to request a class so that you know who is coming to each class. This way you’re not going to overbook or under book.
5. Start Increasing Your CrossFit’s Membership Volume
Last but not least, it’s time to start getting more CrossFit members. This is where FitnessTexter comes into play. FitnessTexter is a text message marketing service that helps boxes increase their membership. We’ve been helping boxer get new members for over 3 years. Some our first clients were CrossFit boxes in South Florida and Miami Beach. FitnessTexter takes your business name and turns it into a text messaging keyword. You can use that keyword on your marketing materials to generate new members leads. Our more successful clients put their texting keyword on flyers, banners, car wraps, you name it. The more places you put your texting keyword, the more people will sign up for it. Give it shot!