Opportunities
Omaha Area Gym with Over 700 Active Members
Sold
Specifications
Huge growth through more boot camps is ripe for the plucking for this fitness club with over 700 active members. Its location in the Omaha Metro provides great recurring customers and they still have room for growth! The bay next door will soon be up for lease, which would allow a buyer to move current boot camp classes into this space to free up other parts of the gym for different activities. Clubs across the U.S. have seen a doubling in income by offering more of these classes, and with such an easy expansion opportunity at hand, a buyer can get in on the ground floor.
In addition to offering 24/7 workout access, the club has group classes, personal training, tanning and more. Of the 755 members, about 13-14% (105 members) also take part in personal training services, which provides the gym about $4,000 in income per month and is another great area to grow the business.
On staff are 2 PT Membership Sales personnel and 2 PT Trainers. While the gym is open 24/7, employees generally work between 10am and 6pm. The sellers have full-time jobs, but do devote about 15 hours/week working in and on the gym.
Running smoothly and efficiently, this is a turnkey gym ready for a new owner to step in and hit the ground running. If you hear the pitter patter of rubber soles in your future, this is the perfect chance to satisfy your fitness appetite!
Business Highlights
- Years in Business: 10
- Location and Service Area: Omaha metro
- Membership: 755 – majority have 1 or 2-year memberships
- Roughly 13-14% of members also receive personal training, which produces $4,000/month in revenue
- Services: 24/7 gym access, group classes, personal training, tanning and more
- Reason for Selling: Partnership separation
- Employees: 2 PT Membership Sales, 2 PT Trainers
- Growth Opportunities: Expand into bay next door for more boot camp classes – clubs across the U.S. have seen a doubling in income through these classes. Offer more personal training.
- Current Owner’s Responsibilities: Sellers have FT jobs outside of the club, but devote 15 hours/week to working in and on the gym.
Financial Highlights
- List Price: $198,000
- 2017 Gross Sales: $276,870
- Owner Profit/Cash Flow
- 2017: $74,738
- 2016: $67,483
- 2015: $69,750
- Profit Margin: 27%
- Assets Included in Purchase:
- Equipment: $161,182 – treadmills, ellipticals, exercise cycles, free weights, racks and more
- Intangible Assets: Great location, awards for service and excellence, strong social media
- Inventory: $605 – protein and pre-workout drinks
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | Tax Return | Notes |
| 2017 | ||
| GROSS SALES | $276,870 | |
| Net Income Shown on Financial Statement | $4,708 | |
| ADDBACKS | ||
| Compensation to Owner | $36,387 | |
| 11% Tax on total W2 Salaries | $4,003 | |
| Depreciation | $8,470 | Non-cash item |
| Interest | $8,291 | Non-onward going expense |
| Amortization | $6,830 | Non-onward going expense |
| Non-Business Telephone | $4,200 | $350/mo for personal cell phones |
| Travel | $1,625 | Personal expense |
| Meals & Entertainment | $224 | Non-onward going expense |
| TOTAL ADDBACKS | $70,030 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $74,738 | |
| Profit Margin | 26.99 % |
- 27% profit margin and $276,870 in Gross Sales
Equipment
Cardio
| Treadmills | Elliptical cross-trainers | Exercise cycles |
| Rowing machines | AMTs | Stair climbers |
Strength/Free Weights
| Free weights | Squat racks | Plate loaded |
| Dumbbells | Barbells | Power racks |
Functional Training
| Battle ropes | Kettlebells | TRX |
| Bosu | Jump ropes | Medicine balls |
| Resistance bands | Multi-functional rack | Plyometric boxes |
Gym Services & Amenitites
- Personal training
- Provides $4,000/month in revenue
- Specialized classes
- Except for boot camp, these classes are free
- Small group training
- Fitness assessment
| 24-hour access | 24-hour security | Tanning |
| Health plan discounts | Wellness programs | Vitamins/supplements |
Membership
- Membership options:
- 12-months
- 24-months
- Month to month
- 755 members
- Most members use 12-month and 24-month options
- About 13-14% (105 members) also partake in personal training
Employees
- 2 PT Membership Sales
- 2 PT Trainers
Employees generally work shifts between 10am – 6pm Monday through Thursday, and from 10am – 2 pm Friday through Sunday.
The sellers work full-time jobs outside of the gym, but do devote about 15 hours each week working in and on the club. Duties include some personal training, payroll, bookkeeping, and employee management.
Growth Opportunities
- Expand into bay next door
- The lease will be up soon on the bay next door, leaving it open for expansion
- This is the best chance to easily expand the gym, ideally moving the boot camp classes out of the gym and into this space
- Offer more boot camp classes
- Clubs across the U.S. have seen a doubling of income by offering more boot camp classes
- More personal training
- The sellers have not had time to focus on offering more personal training, which currently brings in $4,000 in revenue per month
- Hiring more part-time Personal Trainers is the best option for offering more personal training services
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:
Cash Flow x Multiplier = Price
Cash Flow is the sum of net income plus any owner perks and non-onward going expenses.
Multiplier is a prescribed number between 1 and 5 determined by a 100-point, 20-question rating system used to determine the business valuation (average is 3).
The Cash Flow for 2017 is $74,738 and the prescribed multiplier is 2.7.
With this information, the computation result follows:
$74,734 x 2.7 = $201,793
The List Price for the business is set at $198,000.
Funding Example
Purchase Price: $198,000
15%Buyer Down Payment: $29,700
10%Seller Financing: $19,800
75%Bank Loan: $148,500
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $369.
Bank Loan 7-year term at a rate of 5.50% equals a monthly loan payment of $2,134.
After business expenses and loan payments, a buyer with a 15% down payment of $29,700 would retain a profit of $44,701, which results in an 151% 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 $198,000 with the terms listed above, the coverage ratio is 2.49.
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