Navigating the Sale of My Fitness Studio: Insights and Questions
Greetings and welcome to my journey as I embark on the process of selling my small fitness studio, a franchise endeavor that has been my passion for the past three years. With nearly 15 years in the fitness industry, I’ve come to a point where I’m eager to explore new opportunities that reignite my enthusiasm. While I maintain a personal love for fitness, my drive to support others in this realm has gradually waned over the past year, shifting my aspirations towards new endeavors.
As I venture into selling my first business, I am eager to gather advice and insights from those who have navigated this path before me. Below, I will share some pertinent details about my studio, which has flourished, showcasing profitability and growth consistently over the past three years, and continuing into the current year.
Business Overview:
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Team and Operations: The studio employs two full-time staff members—our General Manager, who will remain post-sale, and a devoted instructor who has been part of our team for over a year. The prospective owner will need to assume 30 hours of weekly instruction that I currently manage or appoint an additional coach.
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Facility and Lease: Approximately 3.5 years ago, I built the studio from the ground up, transforming a shell space into the vibrant environment it is today. With a robust HVAC system and well-maintained equipment, the studio is visually appealing, likely only requiring a fresh coat of paint in the coming year. Situated in a retail shopping strip, the lease extends for nearly two years, with an automatic five-year renewal option.
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Financial Overview: Consistent expenses include rent and payroll, while I draw a quarterly owner’s income rather than a fixed payroll. Operational costs cover insurance, utilities, supplies, merchant fees, and franchisor royalties, amounting to around $22-$23k monthly.
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Revenue and Growth Potential: Demonstrating consistent revenue growth, our financials are as follows:
- 2022: $210k
- 2023: $324k
- 2024: $405k
- 2025 Q1: Up 9% from Q1 2024
While there’s potential to reach a $450k annual revenue cap, further growth could be achieved through strategic rate increases.
- Liabilities: A business loan with five years remaining exists, with plans to settle it utilizing proceeds from the
One Comment
Thank you for sharing such a comprehensive overview of your journey—congratulations on the impressive growth and operational stability of your fitness studio. Your detailed insights into the business structure, financials, and growth trajectory will undoubtedly help potential buyers understand the full value of what they’ve been offered.
One aspect worth emphasizing in your sales process is the importance of a smooth transition plan, especially considering the role your General Manager will play after the sale. Highlighting how their ongoing involvement and familiarity with operations can ensure continued success might reassure buyers about stability.
Additionally, since you mentioned the potential to reach a revenue cap and opportunities for strategic rate increases, including a clear growth roadmap or recommendations for scaling could further attract buyers seeking to maximize future revenue.
Finally, given the increasing emphasis on health and wellness trends, consider showcasing your studio’s unique positioning within the community and any membership loyalty programs or community engagement efforts that contribute to client retention.
Best of luck with your sale and your next venture—your experience and thoughtful approach here will surely serve you well in this transition!