A gym or fitness center is not unlike other businesses with a product to sell - a membership in exchange for the ability to use the facilities makes it a popular and lucrative industry. If you are the owner of one or multiple franchised fitness centers and are looking to sell, here are a number of factors to consider in preparation.
Business Valuation & Determining a Selling Price
First and foremost, in order to set a selling price for your gym/fitness center, you need to determine what your business is worth. A business valuation is crucial, yet simple, with the help of a business advisor. The factors to consider include cash flow – both current and future projections, current market position potential future standing, and finally, equipment depreciation. The answer to each of these elements help establish the value of a business, and ultimately a selling price for your gym/fitness center.
Preparing to Share Information with Potential Buyers
Once a selling price has been established, you can get all other financial statements in order and be prepared to answer questions a buyer might ask about your gym. For instance, monthly and annual profitability, equipment warranties, employee salaries, etc. These are all important elements to understand, but also to share with a potential buyer, once negotiations have begun for the sale of the fitness center. Keep in mind, a buyer should be required to sign a non-disclosure agreement (NDA) in order to see any important proprietary information.
Listing the Gym/Fitness Center “For Sale”
Finally, likely the simplest, but also highly crucial step is listing the gym for sale. With a broker on your side, your business is listed on a credible and reliable network. When selling on your own, you can buy a spot in a newspaper or post it online. Unfortunately, this means any and every one can show interest in your fitness center for sale. You have no way of knowing if a competitor might be looking for access to confidential financial documents or if a buyer is looking for a business like yours but does not have the correct budget. By working with a business advisor, buyers are vetted before they can submit a bid and have access to documents regarding your gym/fitness center.
The global fitness and health club industry generates more than 80 billion US dollars in revenue per year. In fact, the North American market estimated more than 32 billion US dollars in 2017. Without a doubt, there is likely always a well-respected, interested buyer only a click away. Overwhelmed at the thought of selling your business on your own? If you are interested in taking the necessary steps to list your gym for sale, contact Transworld Business Advisors Grapevine today and schedule your free consultation. Our experienced team of professional brokers is ready to help!