Network Magazine Spring 2016 | Page 22

FUNDING YOUR FITNESS START-UP :

WHAT TO DO ( AND WHAT NOT TO DO )

When starting a new PT business , it pays to keep it simple , work hard and save before you invest in the bells and whistles .
WORDS : FITNESS AUSTRALIA

I n the early stages of setting up a small fitness business , you may have big plans for what you want to do . From the latest exercise equipment , to eye-catching advertising or a customdesigned website , it ’ s natural to want to do everything , all at once .

However , the challenge many new personal trainers face when starting out is that their savings may not be as big as their vision . Unless you ’ re financially established or you have the option of refinancing your home to raise extra funds for your business , the two main options you ’ re looking at are a credit card or a personal loan : both of which are forms of credit requiring monthly repayments . The key difference between them is that personal loans have a maximum loan term , whereas credit cards are a revolving line of credit , which means your debt can potentially keep rolling on . According to Giulio Avian , director of Fundsnational Lending Specialists ( fundsnational . com ), new personal trainers should think twice before going down the path of a personal loan or credit card .
‘ What can happen is that later in life people still have a residual debt , with the same credit cards they ’ ve had for years ’ says Avian ; ‘ Say you buy some gym equipment for $ 10,000 and you ’ re paying 22 per cent interest , that ’ s $ 2,200 a year , and like any equipment , it depreciates in value , so in four years ’ time it may only be worth $ 6,000 .’
Hypothetically speaking , if you hadn ’ t managed to pay any of your $ 10,000 debt off in those four years , you could have contributed $ 18,800 to a piece of equipment that is now worth $ 6,000 . It may sound extreme , but it ’ s easy to see how this could happen if you aren ’ t disciplined with repayments . So , what ’ s the best plan for funding your business in the early days ? ‘ What I would advise young personal trainers starting out is to work hard , be careful with your money and save ’ says Avian ; ‘ Keep it simple , provide your clients with a really good service and if you do that , the income will come . Then you ’ ve got to manage it and put aside 20 per cent to reinvest into your business .’
Handy savings tips
1 Start off simple
If your business is new , resist the urge to splurge on the latest equipment , branded merchandise or a fancy website . Focusing on delivering a good service to clients , combined with a strong social media presence , is a solid way to grow your business in the early days . Once you ’ re more established and you ’ ve refined your business direction , you can decide what equipment or other purchases are worth investing in .
2 Set a savings goal
If there ’ s some fitness equipment or another purchase you ’ re working towards , have a plan of how you ’ re going to get there . Set weekly or monthly savings targets , and put your money away regularly in a savings account ( ideally a dedicated high interest one , so you ’ re not tempted to dip into it ).
3 Keep your business lean
Regularly tracking your business earnings and expenses ( ideally with the support of an accountant ) is vital , so you know if you are profitable , or if there are areas you can save on . If you ’ re spending a lot on petrol , for instance , see if you can group clients at a similar location in the same day or time block , to avoid multiple trips .
4 Be a savvy buyer
When purchasing your initial equipment , some items such as exercise mats will need to be new . However , others , such as weights and gym equipment , could be second-hand , provided they are good quality and in good condition .
5 Tackle debts
If you have debts , tackle the ones with the highest interest rates first , and look at rolling them all into the one loan if possible . Also , aim to always pay more than the minimum repayments , so your debt is paid off at a faster rate .
Fitness Australia , the peak national industry association , provides support services and guidance to over 30,000 exercise professionals , fitness businesses and industry suppliers nationally . Get more tips and resources to help you start or grow your fitness business from Fitness Australia ’ s Business Toolbox , grow . fitness . org . au
22 | NETWORK SPRING 2016