The Failure Rate of a CrossFit Business: Beating the Odds
Ready to own a successful CrossFit box gym? The average success rate for CrossFit affiliates is 98 percent. With such a narrow margin of failure, it may seem as if there is no right or wrong way to start and manage a CrossFit box gym. However, businesses start and fail every day. In order to beat the odds, avoid the common pitfalls that lead to CrossFit business failure with the following pointers.
Learn the Market
There is no shortage of demand in the CrossFit industry. It generates billions of dollars every year. There is plenty of competition. People across the country love CrossFit and will travel and pay to work out and train in facilities that offer the amenities and qualified staff they respect, admire, and connect with. As an affiliate, you are focusing your efforts in a highly specific and popular niche that has a two percent failure rate. To achieve success, develop and implement strategies that set your venture apart from all others. Dig deep into the business side of CrossFit and the general fitness industries to learn what competitors are doing. Figure out how you can use their momentum to spur your own and sustain it.
Establish the Right Goals
Whether you are more into creating a name for yourself or simply interested in generating profits, you need to take into consideration what CrossFit enthusiasts want. Do not become so involved in the technical side of ownership that you overlook the clues that are right in front of you. No one wants to work out in a gym that lacks the right location, environment, equipment, staff, policies, or features.
If you are not sure where to start, consider the following questions.
- Why do potential members go to other facilities?
- What perks does your CrossFit gym offer?
- How familiar are you with the local competition?
- How effective are your marketing strategies?
- Is your CrossFit gym properly insured?
Put yourself in the shoes of potential members. Take a trip down memory lane and reflect on the expectations and conditions you had as a CrossFit member at your box gym of choice.
Use Fair Membership Pricing
Do not assume the best way to get the attention of the local and surrounding CrossFit community is to offer extremely competitive membership rates and options. It is not good business or a sustainable practice to underbid the competition to siphon off members. Furthermore, it is counterproductive. Pricing your gym’s access and services too low is a major red flag for most people. When developing a price/membership structure for your CrossFit box gym, take into consideration the expenditures: rent, insurance, utilities, equipment, etc. Use them to help determine optimal membership pricing that benefits your organization and customers.
Establish Fair and Practical Cancellation Terms
It is also not fair to customers to make membership cancellation a frustrating and convoluted process. Making it practically impossible for CrossFit enthusiasts to leave your gym is bad business and can lead to a poor reputation and profit loss. Everyone loves a good deal now and then. But with razor-thin profit margins and complex membership terms, how can you possibly encourage potential members to become lifelong regulars?
If you plan to offer term commitments, make sure they are easy to understand and adhere to, and the cancellation terms are easily executable for everyone. Also, to encourage those who are on the fence, just starting out with CrossFit, or simply visiting the area, consider offering pay by the visit, monthly, or unlimited options.
Step Up the Marketing
CrossFit gyms are like boutiques. They offer very targeted services and usually rely on word of mouth for referrals. While this is a highly effective way to reach the CrossFit community organically, it is more effective when combined with other marketing tactics. Again, this requires you to know your audience and to provide a solid membership package that speaks for itself.
Develop marketing tactics that show the CrossFit community why joining your gym is the most beneficial option. Incorporate features into your gym’s environment and operations. Prove to customers that you are a CrossFit affiliate who cares about their fitness and health needs. Make continuous investments to serve their interests and earn their loyalty. For example, start off with a secure location, invest in quality CrossFit equipment, maintain fair and consistent gym policies and practices, hire qualified CrossFit instructors, maintain comprehensive insurance coverage, etc.
Provide Stability and Peace of Mind
Every fitness club or gym needs insurance. Insurance is not just for your CrossFit gym’s benefit; it is beneficial for its members as well. Safety is extremely important! Accidents, injuries, and other calamities can occur and quickly torpedo your gym’s upward trajectory. Insurance makes it easier to meet members’ needs without compromising business operations, sustainability, or your personal assets. It adds several layers of protection against:
General liability: Customers of all skill levels use CrossFit. Accidents are common, and if they occur in the gym, the owner is liable for all associated expenses, that includes medical bills for injuries. General liability coverage covers customer medical expenses and protects against lawsuits.
Workers’ compensation: Insurance helps attract the right CrossFit talent to keep employee turnover low. It also minimizes out-of-pocket expenses and issues should any staff member experience accidents or injuries while instructing customers or performing their job duties. Workers’ compensation reduces CrossFit affiliate liabilities. It covers the cost of medical care, lost wages, and other associated expenses because of worker injury or illness.
Property damage: The risk of lost and stolen equipment or property damage is an unfortunate risk of owning any fitness business, especially a CrossFit box gym. Equipment replacement is expensive; facility repairs too. CrossFit insurance makes it possible for owners to make timely property repairs and replace equipment without sacrificing business operations or profit margins.
Business liability: Every business needs proper liability coverage. Member and staff issues, complaints, negligence, and other issues can arise that lead to litigation and claims against your business. CrossFit insurance provides peace of mind against those risks and helps to keep the business reputation intact.
CrossFit insurance offers many coverage options for CrossFit affiliates or trainers. It is more comprehensive than traditional gym/fitness options. It covers many of the unique risks CrossFit affiliates may encounter. Contact CrossFit RRG to learn custom insurance options that provide peace of mind and minimize the risk of CrossFit business failure.