How to Brace for the Many Responsibilities of Health Club Ownership

Rob Bishop Headshot
Rob Barry Feature

Recently, we were at a financial education seminar for small-business owners. The speaker was discussing how marriages are often impacted when a business owner is able to sell and finds himself or herself with free time. Their spouse is suddenly faced with a partner who is around more than ever before. Maybe too much. "Their spouse discovers that they really weren't a workaholic," the speaker said. "They were just doing what they had to do for all of those years."

Amen, brother.

So, what is it that you "have to do" when the business is yours? We figure that nobody ever tells you, which is why we started telling you last month and will conclude this month. The short answer is "everything."

As we mentioned last month, opening a fitness business is only 20 percent fitness stuff and 80 percent business stuff. The latter is stuff you rarely see coming, it often can't be delegated and it's never fun. These are the things that will make your spouse think you are married to your business. In reality, all you are trying to do is to stay in business.

1. Broken Equipment
We assume that something has to go wrong every day, and it usually starts with something breaking. We even have a full-time manager who looks after our facilities, but that doesn't mean we don't need to be involved. We control the dollars that go into repairs, so we're always involved. And it's always something. Did we get a (properly worded) sign onto the broken piece? Can we fix it ourselves? Do we need to bring in the vendor? If we are bringing in the repair guys, what else should we get done?


2. Being a News Hound
If you are not following current events, you will be burned. Off the top of our heads, here are the laws, regulations and permitting issues that we have had to stay ahead of during the past several years: the Affordable Care Act's impact on us as a small business; the ACA's requirement that we collect tax on our tanning sales; deregulation of electricity in our state; new sewer and water lines that we must tap into; planned construction on our main road that we needed to comment on before they cut off our entrance; local sign ordinances; the minimum wage; proposed sales tax on health club memberships; and increased sewer fees.

Trust us, you'll never watch the news or read your local newspaper the same way again.

3. Becoming a Lobbyist
Much of what you learn about in the news will require that you become involved with your local politicians and related bodies. You'll be at evening meetings about sewers and roads. You'll be calling your local zoning officer about signage. You'll be calling your state senator to say that you oppose sales taxes on club memberships or an increase in the minimum wage. And all the while you'll be wondering why these people don't understand that you're just trying to run a nice local business.

4. Managing People to Whom You Can't Say "No"
Think auditors and inspectors. We are finally used to the annual call from the workers compensation insurance auditors. They call on a Monday and want to meet on Friday — with all of your paperwork at their fingertips. Government audits are even more fun. We were audited in 2014 for sales and use taxes. Don't know what use tax is? Yeah, you'd better learn that, too. Use tax is the equivalent of your state's sales tax that you remit on items that you purchase from out of state for which state sales tax was not paid. We were given two weeks' notice, and the auditor spent days at our facility. The sales tax part was easy. But the use tax? He wanted three and a half years of receipts and credit card statements, and he looked at every...single...receipt. That was fun and a great use of our time.

5. Managing Former Employees and Former Members
No, we're not talking about doing proper training for new employees and doing 90-day "on-boarding" activities for new members. We're talking about the work created by Ghosts of People Past. Former employees who leave you voluntarily may one day file for unemployment. In our state, that creates paperwork that we must respond to — within a few short business days — to get "relief from charges" so that we do not have to pay toward that person's unemployment. If the former employee gets unemployment benefits, there's more paperwork. If you have fired an employee, and they challenge the legitimacy of the firing, there's even more paperwork than that — and maybe even hearings.

And former members? When they challenge credit card charges, you have just days to respond, and you better have signed receipts and good records. When they challenge something like going to collections, you'll be writing letters, copying agreements, and sending scans, faxes and U.S. mail. Doesn't that sound like a great use of your time?

6. Credit Card Rules and Regs
Do you know what it means to be PCI-compliant? You'd better. Several years ago, we leased some space in our main facility to a vendor who was selling drinks and supplements. He used our Internet connection for his credit card transactions. No problem, right? Well, his PCI audit process went back-and-forth for two weeks. All he wanted to do was sell smoothies.

7. Annual Annoyances
We provide AFLAC insurance to our employees, and it seems like it's always the open-enrollment period, requiring us to announce the plans, arrange meetings and perform other tasks we simply would rather not do. And, each year by the end of February, we have to generate just enough 1099 forms to drive us crazy — not enough to outsource like many businesses will for W-2s, but just enough to be time-consuming and annoying. And, actually, we stopped outsourcing our W-2s several years ago. (Three dollars a form? Are they nuts?) So that, too, is loads of fun.

If you take nothing away from this long, boring, tedious list of tasks and responsibilities, please understand that this will be your long, boring, tedious list of tasks and responsibilities. Nobody will believe that you're not a workaholic, because nobody but another business owner understands that these things are the job. They come with the dream.

Rob Bishop and Barry Klein are owners of Elevations Health Club in Scotrun, Pa. This article originally appeared in the May 2015 issue of Athletic Business with the title "They Come with the Dream"

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