Opportunities
900+ Members Gym in Omaha
Sold
Non-franchised gym with focus on personal training
Specifications
This massive gym in Omaha boasts over 10K square feet of usable space, which allows for its over 900 current members. This established gym is non-franchise, and has a great focus on body building and personal training. New equipment and recently reupholstered furniture round out the gym’s updated and fresh look.
Memberships make up 70% of revenue, with the remaining 30% coming from personal training. While members can work out during open hours, they may also participate in group classes, Pilates, yoga, cycling and more. On staff are 6 Trainers to handle up to 40 classes per week. Employees also include a PT Assistant Manager, 1 FT Sales, and 4 Front Desk workers split between 2 shifts.
Looking to sell due to managing other family businesses, the owners are active in managing and running the facility. Please note that neither seller leads training classes, and that their duties can be handled by one person.
Owing to a well-established name, minimal advertising currently takes place. A buyer should consider increasing marketing dollars and creating a more active social media presence. A growth area also exists in corporate outreach to nearby businesses for company fitness packages.
Business Highlights
- Years in Business: 10+
- Location and Service Area: Omaha
- Number of Clients: 900 members
- Services: Open gym, group fitness, team training, personal training, Pilates, yoga and more!
- Revenue Breakdown: 70% memberships / 30% training
- Classes: 35 – 40 classes per week
- Building: HUGE space for spin, group fitness and locker rooms; 3 offices
- Employees: 6 Trainers (2 FT, 4 PT), 1 PT Assistant Manager, 1 FT Sales, 4 Front Desk (2 shifts)
- Growth Opportunities: Increase advertising and social media presence. Corporate outreach.
- Current Owner’s Responsibilities: Both owners are active in running & managing the facility. Duties can be handled by one person.
Financial Highlights
- List Price: $340,000
- 2017 Gross Sales: $516,399
- 2017 Cash Flow: $108,457
- Profit Margin: 21%
- Assets included in the purchase:
- Equipment: $305,550 – furniture, fixtures and gym equipment
- Intangible Assets: Established name & reputation
- Inventory: $17,000 – nutritional supplements, workout gear
*depreciated value
Cash Flow Analysis
| Description of Financial Statement | Tax Return | Notes |
| 2017 | ||
| GROSS SALES | $516,399 | |
| Net Income Shown on Financial Statement | $-9,301 | |
| ADDBACKS | ||
| Compensation to Owner | $48,507 | |
| 11% Tax on total W2 Salaries | $5,336 | |
| Depreciation | $31,315 | Non-cash item |
| Non-Business Telephone | $1,020 | Personal cell phone expenses |
| Health Insurance Premiums | $9,000 | $750/month for owner's premiums |
| Retirement Plan | $3,600 | Simple IRA payments of $300/month |
| Auto-Personal Use | $805 | Personal expenses run through the business |
| Wages | $17,256 | Brother-in-law's wages (not working in gym) |
| Interest | $919 | |
| TOTAL ADDBACKS | $117,758 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $108,457 | |
| Profit Margin | 21.00 % |
- 20% profit margin
- Seller has been managing other family businesses, and has not been able to focus his attention on the gym as much as he would like
Clients
- 900 members
- Average age is 37
- 70% of income is from memberships
- About $400,000
- 30% of income is from training
Services & Classes
Group Fitness & Team Training
- Intro to step for beginners
- Boot camp
- Cycling
- 35 – 40 classes each week
- Group classes include:
- Cardio
- Yoga
- Pilates
- Kettlebells
- Strength & conditioning
- And more!
Personal Training
- One on one with a personal trainer
- More help with nutrition
Nutrition
- Drinks, bars, shakes
- Nutritional supplements and bars
- Accounts for 15-20% of revenue in a month
Employee Information
- 6 Personal Trainers
- 2 FT
- 4 PT
- Trainers are paid hourly and by commission
- Commissions are paid by personal training workout
- 1 Assistant Manager
- Working 25 hours/week
- 1 FT Sales
- 4 Front Desk
- 2 shifts
- Mon – Fri 5am to Noon (FT)
- Evenings (PT)
Growth Opportunities
- Marketing and social media
- Focus more dollars in this area to drive business
- Targeted Facebook ads, active social media presence on Facebook, Instagram, etc.
- Corporate outreach
- The gym is located in a part of Omaha that is dense with businesses
- Capitalize on the location by working with nearby companies to create corporate fitness packages or programs
Valuation Details
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business.
The formula used is as follows:
2017 Cash Flow x Prescribed Multiple = Fair Market Value
Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, the 2017 Cash Flow was used with a prescribed multiple of 3.15. With this information, the computation is as follows:
$108,457 x 3.15 = $341,639
The Fair Market Value found above positions the business List Price at $340.000.
Funding Example
Purchase Price: $340,000
15%Buyer Down Payment: $51,000
20%Seller Financing: $68,000
65%Bank Loan: $221,000
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,268.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $2,904
After business expenses and loan payments, a buyer with a 15% down payment of $51,000 would retain a profit of $58,393, which results in an 115% return on investment in the first year.
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $340,000 with the terms listed above, the coverage ratio is 2.17.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857