Although I am typically doling out the advice in this forum, I am actually looking for advice on this one.
I just bought out a local gym's memberships. It was a 16,000 square foot facility about 6.5 miles away from mine, and it had about 1,500 members.
My goal is to retain as many of them as possible. Many don't really have a choice as they are in term memberships, and about 400 are in open ended memberships, which they can cancel.
I obviously need to expand my business, but I don't want to leap too quickly and spend the extra money like a drunken sailor (my apologies if that comment offends any drunk sailors... I'll use the past republican congress analogy next time). For a short term I have REALLY increased my monthly draft.
I suspect that I will lose more than half if not more than the open contracts. Those who are paid in full are pretty much stuck with me (and vice versa). The only contracts that have any value are the term contracts.
Here is the problem... I actually tried to buy the gym itself, but the owner never really got back with me, and they closed the doors on the customers (and me) without notice, leaving me no choice but to buy the contracts, which are legally transferrable. There is a great deal of animosity and mistrust surrounding the owner of that business, and many of the people who are locked into terms are steaming mad and want out. I have provided an out for them (a reduced buy-out option). Many are going to stay and stick it out.
Did I mention that my facility is only 8200 square feet, and that I already had a pretty decent membership/clientele? The good news is that we were already profitable, so this is basically gravy.
I need to improve my facilities a bit right now, so I need to buy some equipment (treadmills, ellipticals, bikes, strength equip., etc). I will have the capital to do it, but I want to do it right. I also need to beef up my staff.
I am terribly anxious that I am going to spend all this money to improve the facility only to lose most of them anyway when their terms expire, but if I don't make pretty immediate improvements, the added wear and tear will break down my existing already overburdened equipment.
Should I treat this as a temporary cash cow and simply sock money away for a rainy day, or for my family who has suffered through years of my businesses ups and downs, or should I spend a good portion of it improving facilities?
I also don't want to run off my existing loyal members, so I feel like I need to do something to make them feel special, like new equipment and such.
If I were able to hold on to even 10% of this over the long term it would be well worth it, which I think I can do.
My plan is to kill them with kindness. They are used to staff who doesn't give a crap about them, and I want to build up our staff so that they have someone to help them when they are here.
Many of them are the gymrat type who knows equipment, shops facilities by what kind of equipment gyms have (seem silly to me), and I'm not too sure I want to even try to cater to those guys.
All anxiety aside, I am very excited about this opportunity, and look at it as a gift. I've got some fences to mend, but I'm very good at that. I have never made this kind of money, which is timely since I still haven't financially recovered from the fitness summit yet.
To give you an idea of just how stressed this thing has me though, I took an ambien over and hour ago on an empty stomach, and I cannot get it to calm my mind down.
I think I'm going to go try to lay down finally and see if I can get some rest. That 5am client deserves to have me fresh and alert!
All productive comments are welcome. Managing the growth of a business is huge, and it is the lare part of wy most busnesses go under for mismanaging. Thanks for reading this impossibly long thread.