The gym is fitted out before the first membership.
Gyms, studios, sports facilities and event venues sell memberships, classes and tickets, and spend on space and equipment first. January is a good month; the build-out was paid for in October.
The problem
Recreation businesses run on memberships and bookings that arrive over time, and on equipment and space that has to be in place before any of it is sold. A new studio is a lease, a fit-out and racks of equipment before the first class.
Seasonality is real. Fitness peaks in January and again after summer; venues live on wedding season and the holidays. Between the peaks, the lease and the payroll are the same size.
Funders look at membership counts, retention and how revenue is collected. Recurring card billing is a strong signal; event revenue less so. Which funders fit depends on the mix, and that is what the file has to make clear.
- How you get paid
- Memberships and bookings on recurring card billing; events on deposit
- Where the gap is
- Fit-outs and equipment before the first member; payroll between seasons
- What tends to fit
- Equipment financing, revenue-based financing, a line of credit
How we help
Equipment financed against itself
Racks, machines, studio systems and AV financed over the years they are used, not out of the first quarter's memberships.
Repayment that follows the billing
A revenue-based advance is repaid as a share of card revenue, so a quiet month costs less.
A line for the season ahead
Draw for the fit-out or the event deposits, and repay as the bookings settle.
What usually fits
Which one, or which two, depends on the file. These are the ones we reach for first with fitness and recreation.