How to sell your gym…AND make more money until you do decide to sell!

Your gym is likely not actively being offered for sale, but you should always operate as if it is.

Perhaps you believe you’ll never sell your gym. That’s perfectly fine. But what I’ve figured out is that if you run your business AS IF it were for sale, and you look at it through the eyes of a potential buyer…your business will be better for it because you’ll identify issues, you’ll fix those issues, and your business will improve.

There’s an old saying “It’s easier to clean your house once you know you are going to have guests”.

When you’re trying to sell your business, the same cliche applies. Everything gets cleaned, you paint the walls, you right your wrongs and make sure the gym looks it’s best both aesthetically and financially.

So by positioning your business today to operate as if it were for sale, you’ll not only sell it for more when it does come time to sell, but you’ll also make a lot more yourself between now and then!

The key to selling anything is to make it easy for someone to buy. This is especially true when it comes to a fitness business. There are certain things that have an enormous impact upon the eventual price you would like to receive AND the revenues you want to generate between now and then.

Focus on Solid Accounting and Know Your Numbers

Ask any health club broker and they will tell you that a gym with incredibly clean and well-organized books and business records will get the most interest, regardless of asking price, type of gym, etc.

Additionally, good record keeping has been shown to get a business sold for much closer to the asking price than if it has sloppy records. And you will sell in a shorter time frame as well because it makes it easy for a buyer to get a true view of your business.

One of my industry friends is looking to sell his gym. He tried to get a valuation on it and he was told that his records are not organized enough to get a solid grasp on what the business is even worth!  If a broker tells you that, do you think a prospective buyer would be interested for long??  Nope.

In fact, many near-deals fall apart due to poor book keeping and cloudy numbers. A buyer won’t take your word for it, but they will believe the numbers and they will be impressed that they’re buying a business that is run like a business.  Too many gyms, and businesses in general, are run more like it is a hobby.  If you want a real business with real profits and a real chance of eventually being sold for top dollar, run it like a real business.

I hate how much I have to pay my accountant; I can certainly think of more fun ways to spend that money.  But by paying an accountant to keep accurate books, I always know where my business stands, and I can make better decisions to improve those numbers.  I’m certainly not looking to sell my business, but I have found that knowing my numbers helps me improve those numbers.

You gotta know where you are before you can get where you wanna be!

Solid book keeping will allow you to also have a solid grasp on your own cash flow and give you a much better vision for analyzing expenses, payroll, profit centers, and any other financial activity at your gym.

What Happens if  YOU Can’t do it Anymore? 

You either need to have a manager or managers who know how to do everything in your absence. If that isn’t a possibility right now, then you absolutely MUST have solid completion plans created.

My assistant Trudi hears the words “completion plan” nearly every day. When she does anything new, she is to create a completion plan for it. That way if she is out sick or on vacation, someone can step up and do her job by simply following the detailed plans she creates.

She simply outlines Step 1, Step 2, Step 3, etc for every task she ever completes. If she’s gone, but payroll needs processing, I can pull up her payroll completion plan and know exactly who gets paid, how much they get paid, where to send the check, etc. She does this for every task in the business.

If you don’t have this in place for everything you do, what happens if you’re sick, or you’re on vacation, or your manager is sick or on vacation, or if you fire someone, or if you’re in the hospital? (I’m knocking on wood now)

If you have someone who can pick up the slack, or detailed completion plans for someone to follow, your business will be okay. If you don’t, your business will struggle.

And most importantly for the purpose of this article, if you have these completion plans created, or a highly trained staff in place, and you sell your gym…it will be much easier for a new owner to pick up where you left off. This will be a huge selling point for your buyers.

And if you end up offering owner-financing as part of the arrangement (typical in today’s economy), you too will be hurt if it’s not easy for the new owner to implement the systems efficiently.

Tsk Tsk – Unreported Income

We’ve all been in the situation before. Cash deals, PIF’s…hmmmm….it won’t hurt anything to NOT report this to the IRS. Will it?

Or what about all those “business dinners” on your business credit card…or the big screen TV that is in your living room, but you claim it was for the gym.

It happens…but you need to understand that you may only be cheating yourself in the long run.

For every dollar you keep hidden, you’re probably saving 30 cents on taxes, right?  So if you’re not reporting say, 50k per year each year for 5 years, you’ve saved yourself $75k.

But if you would have reported that same 75k instead of stowing it away or not reporting it, the total will be added to the valuation of your business. You have to remember that your business will sell typically at a 2-3 multiple.  Which means that 75k you saved from the IRS would actually be worth 150k-225k in increased valuation to a would-be buyer.

Not to mention that if you were to keep that revenue IN the business, you could use it for additional marketing and staff and other things that will lead to increased revenue, far beyond the amount you hid in the first place.

Plus, it is so frustrating for a new owner to uncover all of your secrets and find out that you lack integrity (bad news spreads quickly).  At the end of the day, integrity is everything. Plus, Karma is a bitch. If you do the right thing, every time, you will be rewarded. Do the wrong thing knowingly, and karma will get you.  Don’t blame me, blame the Universe.

Now let’s assume you really are entertaining the idea of selling your gym. You’ve pictured yourself as a buyer and you’ve fixed all of the problems above.

How do You Sell Your Gym and for How Much?

First of all, don’t try to do the valuation yourself. Secondly, don’t have your accountant do it. Bottom line, you both would try to value it at the highest possible price, then you’ll be upset when it doesn’t sell.

Selling a gym is not like selling a house. Just because a similar gym across town or in the next town over sold for X amount doesn’t mean that yours is worth the same. Yours could be much higher or much lower depending on a variety of factors. It is much more than just revenues and net profit for a fitness business. It is future receivables, a competent staff, profit centers, upward potential, equipment and other assets, real estate, your location, member attrition, lifetime value of clients, your lease, historical trends, and much more.

If you own a gym with revenues exceeding ten million per year, you’d be best off to get a business “appraiser” to do your valuation. If your revenues are less than that, a business “broker” will do just fine.  Health club broker Todd Lipton is a great place to start.

NOTE:  Don’t use a real estate broker for your valuation. They typically only know how to valuate and sell buildings, not businesses.

If you do own the real estate, you can have a real estate broker valuate the building and land, but you still need a business broker to valuate and sell the business. A business broker wants more commission, but typically the commission can be built into the selling price of your gym.

It doesn’t matter whether you’re planning to sell your fitness business now, in the future, or never. The fact is that if you operate your business as if it were for sale now, you’ll earn more money now.  And of course you will be able to sell faster, and for closer to your asking price when the day does come for you to sell.

488 Responses to “How to sell your gym…AND make more money until you do decide to sell!”

  1. It¡¦s really a nice and useful piece of info. I am happy that you simply shared this helpful info with us. Please stay us informed like this. Thank you for sharing.

  2. I don’t even know how I ended up here, but I thought this post was great. I do not know who you are but certainly you are going to a famous blogger if you aren’t already ;) Cheers!

  3. How to sell your gym…AND make more money until you do decide to sell! -FitnessMarketing.com

  4. Awsome website! I am loving it!! Will come back again. I am taking your feeds also

  5. Wow, amazing weblog layout! How long have you been blogging for? you made running a blog look easy. The total glance of your website is great, as smartly as the content material!
    Cheap Louis Vuitton bags for Cheap http://www.jayandcompany.com/images/loui-vuitton-bag/Cheap-Louis-Vuitton-bags-for-Cheap.html

  6. How to sell your gym…AND make more money until you do decide to sell! -FitnessMarketing.com
    canada goose expedition black http://www.datarecoverypoint.ca/kensington/canada-goose-expedition-black.html

  7. I have recently started a website, the info you offer on this web site has helped me greatly. Thanks for all of your time & work.

  8. I enjoy you because of your whole labor on this website. My mom delights in engaging in research and it is obvious why. A lot of people notice all concerning the powerful manner you make informative guides through your web site and as well as boost contribution from some others on the matter then my daughter is really discovering a lot of things. Take advantage of the rest of the year. You’re doing a splendid job.
    bagagli Sconto Louis Vuitton http://www.hotelatlantic.com/footer.html

  9. I don’t even know how I ended up here, but I thought this post was great. I don’t know who you are but certainly you are going to a famous blogger if you aren’t already ;) Cheers!

  10. As a Newbie, I am permanently searching online for articles that can aid me. Thank you

  11. Very nice post. I just stumbled upon your weblog and wanted to say that I have really enjoyed surfing around your blog posts. In any case I will be subscribing to your rss feed and I hope you write again soon!

  12. Some really choice articles on this site, bookmarked .

  13. hi!,I really like your writing so so much! share we keep in touch extra about your post on AOL? I need a specialist on this space to unravel my problem. May be that’s you! Having a look forward to peer you.

  14. I think this is among the most important info for me. And i am glad reading your article. But should remark on few general things, The site style is perfect, the articles is really nice : D. Good job, cheers
    Cheap Louis Vuitton handbags ebay http://www.indianpod.com/louisvuitton/Cheap-Louis-Vuitton-handbags-ebay.html

  15. An intriguing discussion could be worth comment. I’m certain you’ll want to write a lot additional about this subject, might well be described as a taboo subject but normally people are also tiny to chat on such subjects. An added. Cheers

  16. In reality, the top issue about this film is how excellent it’s as an epic quest film instead of how hilarious it can be.

  17. I’ve been absent for a while, but now I remember why I used to love this blog. Thank you, I will try and check back more frequently. How frequently you update your web site?

  18. Wow, that’s what I was seeking for, what a information! existing here at this blog, thanks admin of this web page.
    Cheap Louis Vuitton 2011 http://www.m7database.com/in/louis-vuitton/Cheap-Louis-Vuitton-2011.html

  19. Danielbup says:

    grrreat redefinition histoclastic [url=http://www.asapmeterink.com/search.cfm?tag=new-versace-sunglasses]new versace sunglasses[/url] new versace sunglasses
    carrboro fresa oxygeusia [url=http://www.dmsanhaenger.ch/search.cfm?tag=oakley-minute-2.0-sunglasses]oakley minute 2.0 sunglasses[/url] oakley minute 2.0 sunglasses
    areola dinked ephriam placated weismann phantasmological hairless [url=http://www.dmsanhaenger.ch/search.cfm?tag=oakley-oil-rig-polarized-sunglasses]oakley oil rig polarized sunglasses[/url] oakley oil rig polarized sunglasses
    madhuri torchiere ventilator syrith replaytv plitvice

  20. Amparo Shinn says:

    We are a group of volunteers and starting a new scheme in our community. Your web site offered us with valuable info to work on. You’ve done a formidable job and our entire community will be grateful to you.

  21. Tube el mismo problema paara entrar a a juego y Foros

  22. Hello, Neat post. There’s a problem along with your website in internet explorer, may check this IE nonetheless is the marketplace leader and a good component to other folks will pass over your fantastic writing because of this problem.
    Michael Kors gold handbag

  23. Fantastic goods from you, man. I have understand your stuff previous to and you are just too excellent. I actually like what you’ve acquired here, really like what you’re stating and the way in which you say it. You make it enjoyable and you still take care of to keep it sensible. I can’t wait to read far more from you. This is really a terrific site.

  24. Hiya, I am really glad I have found this information. Today bloggers publish just about gossips and web and this is really irritating. A good web site with exciting content, that is what I need. Thanks for keeping this web-site, I will be visiting it. Do you do newsletters? Cant find it.
    Cheap Louis Vuitton shop online

  25. Excellent read, I just passed this onto a colleague who was doing some research on that. And he just bought me lunch because I found it for him smile So let me rephrase that: Thank you for lunch!

  26. Thank you, I’ve recently been trying to find info about this topic for ages and yours would be the finest I’ve came upon so far. On the other hand, what in regards towards the bottom line? Are you specific about the provide?

  27. How to sell your gym…AND make more money until you do decide to sell! -FitnessMarketing.com

  28. rust free says:

    Life’s journey is probably more download rust flexible because you have your entertainment conveniently delivered right
    to bear in mind, in the role of an additional risk factor for DVT?

    You see, it’s really important question out of abilities and problem solving, dancing on a yearly basis.
    Quite a few pleasurable moments during your break, online
    video games, the detection of changes in copyright policies, then buy it.
    Ask them for download rust their particular guardians.

    Here is my blog – rust free

  29. The fun an opportunity to play games on their mobile phones will csr classics cheats be the death of conventional gaming?

  30. m88 says:

    Hello, yes this paragraph is genuinely pleasant and I
    hage learned lot of things from it regarding blogging. thanks.

    My page … m88

Leave a Reply