Health and wellbeing has been a massive area for growth in recent years, sparking a big rise in the number of gym facilities opening all over the country.
There’s lots to think about when you’re running a gym, but how it will be financed is undoubtedly the most important factor to consider.
Read on for ourtop four tips for successfully financing your gym business.
Loans and grants
The traditional way of obtaining financial support is a business loan from the bank – but these can be difficult to get hold of.
Around 100,000 loan applications by small businesses are rejected every year, leaving a funding shortfall of £4 billion. Banks will lend money, although they are less likely to take risks in the current financial climate.
Many banks will also be unwilling to lend if the loan applicant has not injected their own personal funds into the venture.
Loans are usually tailored to each individual set of circumstanceswith negotiable terms and conditions. A solid balance sheet and attractive future revenue forecasts will most likely generate a low rate of interest.
There are also a handful of business grants – although they arehard to come by. Your local Chamber of Commerce can provide you with information about the latest grants available.
Some people choose to finance their gym business without external funding, leaving them free to manage the company as they see fit.
Starting a business with minimal capital teaches bosses some invaluable commercial skills, including how to make your money stretch further.
People who use their own cash to get started are taking a financial gamble – especially if the business fails.
Trying to build a healthy budget before taking the plunge makes sense, so save hard and take advantage of special offers like the online casino here to boost your chances of progressing up the business ladder.
Friends, family and contacts
Many businesses use the people closest to them to help fund their business, although this can be fraught with danger.
On the one hand it’s likely that it will be cheap to pay back funding of this type, but if the business fails you are potentially risking losing a friend or falling out with a family member.
It’s important to establish from the start whether the money provided is simply a loan or entitles the investor to shares in the company.
Away from friends and family, your contacts can be an invaluable source to access funding and business knowledge.
If you are starting or expanding a business in a field in which you’ve worked before, people may well be keen to back your expertise if they think your idea will work.
Independent or ‘angel investors’ provide financial backing for businesses in exchange for an ownership stake in the company.
If the business performs well both parties would reap the financial rewards, but if the venture fails your new partner generally would not expect their initial investment back.
Failures amongst start-up companies are high, so bringing someone on board with sound business expertise can help you avoid many of the pitfalls.
Approach an investor with a sound business plan and focus on their mentorship, contacts and business experience rather than their cash during your initial discussions.
Raising capital is part of the process, but investors will be more interested in ensuring you are equipped to survive the bad times rather than knowing what you’ll do when things are going well.
If you choose to go down this route, make sure that the services being offered by the angel justify the proportion of the business they demand.