With the country slowly but surely opening up, millions of Canadians are seeking to get back into shape. What better time, then, to start your own gym or fitness studio?
This is easier said than done, however. Launching your own business requires significant upfront costs, which you may not be able to afford out of your own pocket. Fitness centres are highly competitive businesses too, with competitors regularly trying to undercut one another. To ensure your survival to this cutthroat industry, you will need a sound financial model at the ready.
The first step of your financial planning is to become acquainted with your financing options, of which there are plenty. First Capital Leasing can help you with that. As a premier leasing and financing company in Calgary, we have the resources to get you any piece of equipment you need for your gym or fitness studio at a rate that does not exceed your budget. Our 95% approval rate speaks volumes about our leasing and financing options. Call 403-255-5508 or fill out the online contact form to kickstart your fitness business with First Capital Leasing.
Setting The Groundwork
Before thinking about the many ways in which you can finance your new gym or fitness studio, you may want to jot down your necessary expenses. Knowing what you will need to pay or finance can help you make the financial decisions to get your business off the ground.
Here are the basic necessities that clients have to come to expect at every respectable gym or fitness studio:
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- Modern equipment: Popular fitness equipment includes cardio and weightlifting machines, free weights, and aerobic supplies. If you want to exceed expectations, you can also consider installing a martial arts practice room or a pool.
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- Marketing: A large portion of your budget will be dedicated to making your business visible and appealing. This means paying marketing professionals to build a searchable and converting website and run your social media accounts. Classic marketing tactics, such as distributing promotional items and advertising on billboards, remain effective to this day.
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- Staff: You will need employees to run and operate your business. At the very least, your facility should have maintenance workers and a receptionist. More upscale gyms will hire personal trainers, nutritionists, and possibly massage therapists.
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- Maintenance: Speaking of maintenance workers, they are now more important than ever. Unless you want your gym to be the latest epicentre of a COVID-19 breakout, expect to spend generously on daily cleaning and upkeep and extra sanitization measures.
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- Amenities: Every gym these days has water fountains, air conditioning and ventilation, heating, and shower systems.
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- Insurance: Last but not least, you will need to insure your business in the event a customer is injured or damages your equipment (both will happen often).
All these costs are non-negotiable if you want your fitness centre to be competitive. Thankfully, you have a range of financing options available to make ends meet.
Ways To Finance Your Gym Or Fitness Studio
Whether you are starting a classic gym centred on gaining mass or a modern studio offering the trendiest fitness programs, you have numerous choices to finance your business venture.
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- Business loans: These are great for covering large purchases and helping you stay afloat during slow periods. They might be considered almost necessary when you are just starting out. Depending on your financial situation and your needs, you can request loans up to a few million dollars.
- Merchant cash advance: By ceding a percentage of your future credit sales, you receive in exchange a lump sum of cash for immediate usage. If you need to acquire a new piece of equipment right now, a merchant cash advance could be what you are looking for.
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- Equipment loans: Buying your equipment outright is not always a business-savvy decision. Certain pieces of equipment can become obsolete and unappealing over time, so getting stuck with them can be a drain on your resources. Leasing them solves this problem entirely.
- Business line of credit: This involves setting up a pre-set amount of loans that you can spend at your discretion as long as you can pay it back. The advantages of a line of credit over a business loan are that you only spend what you need and not having to apply for a loan every time you need money. Having a line of credit ready and only touching it for emergency expenses can be effective business acumen.
- Invoice Factoring: Maintaining a cash reserve as a gym or fitness studio owner can be difficult. After all, your clients are only paying you every month or so. An invoice factoring allows you to exchange your total invoice amount for a cash advance. This is yet another way to gain access to immediate cash when you need it the most.
Conclusion
As you can see, just like your necessary expenditures, your financing options for your new fitness venture are myriad. The trick is to figure out which financing option works best with which expenditure.
For instance, equipment loans can be excellent for covering your equipment. Meanwhile, a cash advance can give you what you need to build this steam sauna that would set you apart from your competitors. A line of credit can be invoked in case your equipment breaks and you need to pay a maintenance worker to come in as soon as possible.
Of course, financing gets more complicated than that. That is why you can partner with First Capital Leasing to help you survive the first years of your business. Our unbeatable financing and leasing terms for the most coveted fitness equipment, combined with our financial counselling, provide you with a clear edge over your competitors. See what we can do for you by calling 403-255-5508 or filling out the online contact form.
FAQ
How do I get a good rate for my business loan?
Ways to secure a good business loan rate include making your payments on time, maintaining a low debt-to-income ratio, and providing collateral to your lender. You should also use a loan comparison website to see what each lender can offer you.
What if I have bad credit?
If you have trouble getting loans approved, you may get in touch with us by calling 403-255-5508 or filling out the online contact form. Our 95% approval rate means you are almost certain to receive financing from us.
What interest rate can I expect when applying for a business loan?
While this heavily depends on your financial situation and your business’ outlook, a 2018 study found that the average interest rate for businesses was 5.7%.
