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Post by John on Mar 14, 2018 18:27:07 GMT
Hello,
I have a question from experienced ZEE's someone is selling the location which is about 4500 sqft with all the amenities:
24 Hour Access Cardio Equipment Fitness On Demand Free Weights HDTV Personal Trainers Private Showers Strength Training Private Bathrooms Nutrition Consultants Group Classes
The club is loosing about 40 - 50K a year. How much would be the approx value of the equipment and build out, I am thinking of debranding it.
any advise will be appreciated.
thanks
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Post by snaplongtimer on Mar 15, 2018 2:46:17 GMT
How can anyone give a value on something like this? Buildout is irrelevant since it is done already and you can't sell that. Better off looking at revenue over last couple /few years. Standard snap package purchased 10 year ago plus a couple extra added pieces over time might be $25k now, but if the club is still making decent money that kind of trumps the present worth of your equipment. Better find out why it's losing money.
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Post by determined1 on Mar 16, 2018 13:08:13 GMT
Take a step back and look at the current situation. The club is losing about $4,000/month. If they just hand the keys over to you and you pay $0 you're still losing $4K/month. You either have to generate an additional $4K/month or reduce your expenses by $4K/month. If you go private you'll save about $1K/month in overcharges by snap. Keep in mind you'll still need insurance, website services, CRM software, door access, etc. By my estimates you can get better products in these areas and still save about $1K/month. So now you're left with $3K/month. Have you spoken with the landlord about lowering the leasing costs? Are there areas where money is being wasted? What are the electricity costs? How much would LED bulbs costs and what would you save per month? It all boils down to saving dollars here and there.
Next, what would you change to increase revenues? This will require you to better understand what the club is currently doing. Have you been a member in the past? If not maybe you should sign up in order to get a better idea on what to improve. What sort of staff hours do they have? Have they stuck with snap's original recommendation of having just a few hours a day?
If you don't know what you can and/or will change to reduce costs and increase revenues then I wouldn't go any further. What to pay for equipment is further down the line.
Now, did you mean that you were planning on buying the equipment and moving to a completely different location and running as a private fitness center? That would be a whole different list of suggestions.
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mikef
New Member
Posts: 7
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Post by mikef on Mar 17, 2018 23:07:07 GMT
'The club is loosing about 40 - 50K a year. How much would be the approx value of the equipment and build out, I am thinking of debranding it.
any advise will be appreciated.'
With those numbers, the owner should be begging you to just take the keys. The business is worthless and the equipment when liquidated is worth 15 cents on the dollar.
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Post by cheryl on Mar 20, 2018 12:38:30 GMT
I'm confused. Why would you buy a club that's losing that much money? Do they have new equipment you can buy on the cheap? Why not start your own private club, buy a bunch of good used equipment and spend your money on marketing to recruit new members?
Are you in need of a place to launder cash? I believe many clubs (and restaurants) are just fronts. I don't see how some of them stay in business. One restaurant I know of is only open 5 days a week. Has 4 or 5 people working all the time. Closes at 5 most days and only had 3 or 4 people eating there at the height of lunch time.
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