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Rest In Peace

Following is an obituary for an independently owned fitness center. The names have been changed to protect the innocent.

Doomed From the Start Health Club (DFTS) shut its doors this year after approximately 18 months of operation. It was opened by a hopeful husband and wife in 2005 who were active in their community. The husband was an accomplished athlete and coach, and their independent facility was going to be a family friendly business. They were going to address the fitness needs of a community that had no local, full-service facility. To minimize their risk, the husband kept his day job while the wife became the club manager. They envisioned a fitness center that would appeal to everyone in town. There would be a bustling daycare each morning while stay-at-home moms took group fitness classes, followed by steady traffic throughout the day as members used state-of-the-art equipment. After school, there would be martial arts and wrestling classes for kids, and more group fitness classes for adults leaving work. Weekends and summers would be bolstered by vacationers, and several local businesses would enhance their membership revenue with corporate accounts.

An autopsy revealed that DFTS succumbed to many all-too-common ailments, found below.

No market research

DFTS's owners lived and worked in their community, and thought they understood the demographics and behaviors of their market. They didn't. In reality, there weren't enough people in their area who fit their desired demographic. This lack of research led to many problems that contributed to the club's demise.

A far-too-large facility. DFTS would have been viable at half its size. The unnecessary square footage wasted precious start-up dollars, and was a ticking time bomb in terms of monthly mortgage and utilities.

Small membership numbers. The owners believed everyone who told them, "You'll do great," or, "We need a gym." They also believed local business owners who promised corporate fitness contracts.

Location (location, location). DFTS was in a deceivingly bad location. It was on a major road, which was fine, but the layout of the property presented too many challenges. The building sat up on a hill, and, since the facility was far above the road, there needed to be excellent signage.

Insufficient signage. There was signage that identified the business, but it was still too easy to drive by without noticing the facility.

Capitalization

There was not enough capital to cover initial expenses (which are always higher than planned), much less operating expenses once things got tough.

More passion than experience or knowledge

The husband and wife team behind DFTS were the classic owners of a start-up, independent facility. See my June 2007 column (Please Do Not Open a Health Club, p.51) if you'd like to read more about them.

The autopsy of DFTS could go on and on. The owners' vision of the services they would provide (fitness evaluations, one-on-one introductory training, etc.) could not be realized without a pool of available employees, and the money to attract them. The hoped-for revenue from martial arts and wrestling never materialized when launching kids programming proved more difficult and expensive than expected.

If you think, Well, at least that isn't me!, please think again. We are all just one or two bad decisions away from doom, and are often blind to our mistakes. In the last few months alone, I have spoken with many facility owners who are on the track to failure - like the owner of a small yoga studio in a major metropolitan area who was sub-letting space out of a doctor's office in a strip mall. The mall owner and the doctor both refused to allow her to place signage on the building. Then there were the managers of a fitness center who opened in a small town in the midwest. Their passion was to service special populations (arthritis sufferers, cancer survivors, etc.), and they seemed to take for granted their ability to attract members of the general population.

What would the results of your autopsy show? What would your fitness center's obituary say? Avoid meeting the same fate as DFTS. Diagnose your problems now, and commit to fixing them.

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