We'd really like to buy new equipment for our facilities in 2011, but we can't imagine how we're going to do it. That, in a nutshell, is the problem facing fitness equipment manufacturers.
As recently as four years ago, we had no problems purchasing equipment. The economic outlook was bright, there were plenty of leasing companies, and since we had been in business for so long, we had an easy time with the approval process.
As they say, that was then. According to Club Industry's state of the industry report, club operators will spend an average of $10,000 less on equipment purchases in 2011 than they spent in 2010. And it wasn't like they were spending much in 2010.
So, what will it take for us, and doubtless other club operators, to purchase equipment in 2011? In short, we need help, and it can only come from the manufacturers themselves. So, with full acknowledgement that we know nothing about the economics of the manufacturing and financing businesses, allow us to make some suggestions:
1. No payments until 2012. We can do this at our local furniture store, but not with equipment. The equipment guys need to convince the lease guys to play ball and offer deals like this. Put time on our side, rather than requiring first- and last-month payments and the immediate monthly installments.
2. Stand with us. We know you're not our uncle and may not want to co-sign on financing, but the leasing companies are much harder to work with these days. Personal credit scores of owners are under greater scrutiny, and dollars available are lower. We need manufacturers to take an active role in financing and lend their weight to the process.
3. Offer creative payment options. Partner with our industry's billing companies (ABC Financial, Twin Oaks and so on) to make monthly payments directly from them to you (or to the leasing companies) in return for better terms. For example, we use a third-party billing company that collects our dues from each member throughout the month, and at regular intervals they send our money to us. So, what if they sent our monthly lease payment directly to our lender, without us ever touching the money? We'd like to think that the automatic payment would be valuable and comforting to anyone loaning us money.
4. Certify used equipment. We have dabbled in used fitness equipment, but it makes us nervous. If one of the major manufacturers offered us "Certified Used" equipment, with their seal of approval and a reasonable warranty, we'd take a very serious look.
Please, guys, let's get creative. We need new equipment, and you need to make some sales. Let's look at this problem with fresh eyes and an appreciation for the reality of 2011.