When I began I quickly realised I didn’t have the £250,000 required, so I traded used gym equipment to gain capital. I negotiated extra storage during the setup phase, then bought ‘job lots’ of equipment from bankrupt gyms and online selling sites like eBay.
I would bulk-buy 10 machines, sell 7 individually to get my money back, then keep the remaining 3 machines for free. I did this several times and ended up with £150,000 worth of equipment on opening day which only cost me £30,000.
Due to this method, our cost of entry was lower than other gyms and we broke even 18 months ahead of schedule. From experience, gyms struggle because they take new equipment on long leases and debt, therefore, becomes an overhead.
“Subscribe to my YouTube channel to learn about the different revenue streams and also to watch our ‘£zero-100k’ journey, in which we flipped all types of items, taking us from zero cash to the purchase of a house and much more in less than 12 months.”
Always give yourself two or more exit strategies from any deal. If you have one main exit and that doesn’t work, you will need the other exits to fall back on, otherwise you have no easy way out without incurring financial risk and hitting the bottom line.
When setting up a business, don’t let the high set up costs force you into a finance deal that will hurt your cash flow going forward. Try to think creatively – one of my businesses has given me passive income from year 2 which was way ahead of the market average. This was achieved by buying and selling used equipment, thus enabling me to reduce my setup costs by over 70%. This gave the business a much better chance of surviving from the outset.