Starting a Gym 101

Starting a Gym 101: Keeping Tabs

Starting a Gym 101: Keeping Tabs

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

Number 10 on our list is to set up a recordkeeping/accounting/in-house office system for your services. Many new business owners tend to put this on the back burner or contract it out to “someone who likes math,” and it can soon become cancerous. Improper record keeping or accounting can become a business owner’s worst nightmare, so attention to detail is extremely important.

Financial Management is the process of managing the financial resources, including accounting and financial reporting, budgeting, collecting accounts receivable, risk management and insurance for a business. The financial management system for a small business includes both how you are financing it as well as how you manage the money in the business.

In setting up a financial management system your first decision is whether you will manage your financial records yourself or whether you will have someone else do it for you.

Bookkeeping refers to the daily operation of an accounting system (recording routine transactions within the appropriate accounts). An accounting system defines the process of identifying, measuring, recording and communicating financial information about the business. A bookkeeper compiles the information that goes into the system, and the accountant takes the data and analyzes it in ways that give you useful information about your business. They will be able to advise you on the systems needed for your particular business and prepare accurate reports certified by their credentials.While software packages are readily available to meet almost any accounting need, having an accountant at least review your records can lend credibility to your business, especially when dealing with lending institutions and government agencies.

The most crucial part of your small business will be setting up an accounting system, collecting bills and paying employees, suppliers and taxes correctly. Unless you are well versed in accounting and bookkeeping, this is likely to be your nemesis if not handled appropriately.

The basis for every accounting system is a good bookkeeping system. What is the difference between that and an accounting system? Think of accounting as the big picture and bookkeeping system as the nuts and bolts of your business. The bookkeeping system provides the numbers for the accounting system. Both accounting and bookkeeping can be contracted out to external firms if you are not comfortable with managing them yourself.

Even if you outsource the accounting functions, however, you will need some type of recordkeeping systems to manage the day-to-day operations of your business – in addition to a financial plan and a budget to make certain you have thought through where you are headed in your business finances. And, your accounting system should be producing Financial Statements. Learning to read them is an important skill to acquire.

There are also several financial software options to choose from such as Peach Tree, Quicken and QuickBooks. We recommend trying the different types of software out and see what works best for you. Some software can work directly with your online registration software and your bank, so it’s best to investigate those options to save time in the future.

Clearly, financial management encompasses a number of crucial areas of your business. Take time to set them up right. It will make a significant difference in your stress levels and in the bottom line for your business.

Read more: http://www.smallbusinessnotes.com/business-finances/financial-management/#ixzz2o3hcFGT5

-Stephanie Beveridge and Carrie Harris

Past posts:

Starting a Gym 101: Setting Up Your Space

Starting a Gym 101: Pricing Your Services

Starting a Gym 101: Licenses, Permits & Insurance

Starting a Gym 101: All Things Legal

Starting a Gym 101: Making the Big Decisions

Starting a Gym 101: Writing a Business Plan

Starting a Gym 101: Legal Forms of Business Ownership

Starting a Gym 101 

Starting a Gym 101: Pricing Your Services

Starting a Gym 101: Pricing Your Services

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

Number seven on our list is pricing your services! Pricing your service (tuition) is extremely important. “How much is it?” is usually the first question a customer will ask and—while you don’t want them to gasp for air at your answer—you want to be profitable and competitive with your market.

Your tuition cannot out-price your target market, yet a profit for your company must be made in order to keep your lights on. There are several approaches to pricing; ours is just one version for making pricing decisions that take into account your costs, the effects of competition and the customer’s perception of value.

Definitions:

  • Cost is the total of the fixed and variable expenses (costs to you) to provide your service. (Rent, payroll, utilities, etc…)
  • Price is the selling price per unit (monthly, 6-week session, a year etc…) customers pay for your service.

Price has to be set higher than the cost in order to turn a profit. How the customer perceives the value of your service determines the maximum price customers will pay.

Perceived value is created by an established reputation, marketing messages and your facility’s environment/personality. What do parents want for their children? What do parents value? Students learn life lessons, goal setting, courage, the humbleness of defeat and the glory of winning, etc. Parents know that these traits are valuable to their children and will more likely pay for those skills in addition to their child learning a back handspring. How are you different and what does your gym do better than your competitor? This will play into perceived value as well because your customer will compare you to other gyms.

Use cost-based pricing along with value-based pricing to come up with a price that is fair to your customer and profitable for you!

-Carrie Harris & Stephanie Beveridge

 

Past posts:

Starting a Gym 101: Licenses, Permits & Insurance

Starting a Gym 101: All Things Legal

Starting a Gym 101: Making the Big Decisions

Starting a Gym 101: Writing a Business Plan

Starting a Gym 101: Legal Forms of Business Ownership

Starting a Gym 101 

 

Starting a Gym 101: Licenses, Permits & Insurance

Starting a Gym 101: Licenses, Permits & Insurance

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

Number six on our checklist of key steps that every business should take to start their business on the right track is to get all necessary licenses, permits and insurance. There is so much to do when opening a business that sometimes people overlook the important legal requirements. In addition to the information we are providing below, please seek help from your city’s chamber of commerce, a lawyer or other trade associations serving the cheerleading industry.

Federal Requirements

With the exception of Sole Proprietors, most business types must apply for an Employer Identification Number (EIN).

Most businesses do not require a federal license or permit.

State Requirements

Business licensing requirements vary from state to state; however, we have listed the most common types below:

Business Licenses: A state business license is the most important document required for tax purposes and conducting other basic business functions.

Occupations and Professions: State licenses are frequently required for occupations – the cheerleading profession does not have this requirement; however, if you have a daycare type facility (keeping children for over 3 hours usually) you may want to check your state requirement.

Licenses Based on Products Sold: Some state licensing requirements are based on the product sold.

Tax Registration: If the state in which you operate has a state income tax, you’ll have to register and obtain an employer identification number from your state’s Department of Revenue or Treasury Department. If you’re engaging in retail sales, you will need to obtain a sales tax license.

Trade Name Registration: If your business will only be operated in your local community, registering your company name with the state may be sufficient.

Employer Registrations: If you have any employees, you’ll probably be required to make unemployment insurance contributions.

-Carrie Harris & Stephanie Beveridge

 

Past posts:

Starting a Gym 101: All Things Legal

Starting a Gym 101: Making the Big Decisions

Starting a Gym 101: Writing a Business Plan

Starting a Gym 101: Legal Forms of Business Ownership

Starting a Gym 101 

 

 

Starting a Gym 101: All Things Legal

Starting a Gym 101: All Things Legal

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

Number five on our checklist of key steps that every business should take to start their business out on the right track is the Legal Requirements for Starting a Business.

To operate a business legally an organization needs to meet all the laws of the federal government, state government and the city and/or county where the business operates. 

Most businesses are going to need an Employer Identification Number even if they don’t have employees. The Internal Revenue Service (IRS) provides clearly written documentation of what is required in terms of reporting. Other agencies may also have legal requirements. If you have employees, you will also have labor laws that you will need to follow. The Small Business Administration operates local offices in every state. These offices can be a great source of information about other local regulations you may need to be following.

There are laws and regulations governing the actual registration of the business and the business name, and there may also be licenses and permits needed to operate certain types of businesses. For instance, if you offer childcare at your gym, you may need to have special permits from social service or educational agencies. You can find out more about such regulations from your state business resource offices.

Helpful websites:

www.sba.gov

http://www.irs.gov/Businesses

-Carrie Harris & Stephanie Beveridge

 

Past posts:

Starting a Gym 101: Making the Big Decisions

Starting a Gym 101: Writing a Business Plan

Starting a Gym 101: Legal Forms of Business Ownership

Starting a Gym 101

 

 

 

Starting a Gym 101: Making the Big Decisions

Starting a Gym 101: Making the Big Decisions

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

One of the most overlooked aspects of business is the relationships you create. During our 13 years of business, we cannot count the number of times that we have been grateful for the friends and professional relationships we have made and their contribution to the success of our business.

Any time you are looking at making a major decision, you should get a second opinion. This will invariably save you time and money in the long run! At a minimum, you will want to have someone you trust in finance, law and insurance.

Here are some overall tips for choosing a professional to assist you:

• Ask your accountant, lawyer, friends and fellow business owners to introduce you to the professionals whom they are familiar with. Professional conventions are a great opportunity to network with other like-minded business owners and get recommendations.

• Check with your local chamber of commerce to find out which professionals and banks are active in the community.

• Look for a complementary personality. This is very important! You need a person that you can relate to and that makes you feel comfortable. A professional should never be too busy to address your needs and concerns.

• Find out how long they have been in their current position or owned their own business.

• Tell them about your business and the form of organization so they can tell you how they can assist you.

• Ask about billing rates and payment process upfront, as well as what fines and/or penalties that professional is willing to take responsibility for if they occur (this will be based on the services they render). You should not make a decision on pricing alone, but always look carefully at the charges for services.

• If you don’t understand something, ask for clarification.

Choosing a bank:

Approach this as a long-term commitment and choose wisely. You should compare financial institutions and choose the one that will best serve your business’ needs. You will want them to be able to assist you during the different stages of your business. We would recommend looking at your local banks, as we believe supporting your community is important. However, if your local bank is not able to meet your needs, then by all means keep shopping around!

Ideally your bank should be able to help you with the cash management needs, investment products, loans and advice.

Choosing an accountant:

You will want an accountant that can assist you with: bookkeeping structure, tax planning and payroll. We recommend finding someone that has worked with businesses similar to ours. The uniqueness of our business can make it very difficult to find competent help in this area.

Taxes and payroll are two areas that you do not want to mess up! If you do not have this type of experience, we HIGHLY recommend having a professional handle it for you. We also recommend educating yourself on the basics so that you can question and double-check what is being done for you. Don’t assume that they are working to your benefit until they have proven it to you!

Choosing an insurance agent:

In these times, it is almost inevitable that something will happen that will make you thankful you have proper insurance. Whether it is a natural disaster or lawsuit, your insurance company should be able to help you keep your business afloat during the difficult times. This is one area that we definitely recommend someone that is industry-specific. There are so many aspects of our business that require a professional familiar with our needs. Your insurance will be based on the services you offer and your enrollment, so be sure to update your agent if you add a program or increase/decrease your students. We cannot stress enough that you MUST read the fine print and ensure that everything is covered. Sometimes you will need to ASK for specific coverage for natural disasters—we have seen a few businesses get shafted after the hurricanes hit because they didn’t realize they weren’t covered!

Choosing a lawyer:

Your lawyer will become one of your most important advisors. You may also need to change attorneys as your business changes, but it can be an expensive process so it is best to take your time and choose the right person the first time. We recommend interviewing at least 2 or 3 attorneys. Most will waive their fee for a short interview. Stay focused when interviewing them, and ask for references of other small businesses they have assisted. Do not ask for legal advice during this process. You may also ask if they have knowledge in our field, how they charge, how you can help reduce fees and what they feel their strengths are.

Your attorney should be able to, at a minimum, assist you with contracts, leases, securities, patents, trademarks, legal advice and litigation.

-Carrie Harris & Stephanie Beveridge

 

Past posts:

Starting a Gym 101: Writing a Business Plan

Starting a Gym 101: Legal Forms of Business Ownership

Starting a Gym 101

 

Starting a Gym 101: Writing a Business Plan

Starting a Gym 101: Writing a Business Plan

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

Step three on the Starting a Business Checklist = writing a business plan. This is another crucial element that many current business owners still do not have. This is like going on a vacation without an itinerary or any idea of what you are going to do. You need a clear picture of what is in store for your business and the resources needed to get you where you want to go.

A well-written business plan is the story of how you will run your business, and almost every lender will require some form of business plan before lending money to a business.

The essential components of a business plan are:

Executive Summary: An overview of the entire plan along with a history of your company

Marketing Analysis: Illustrates your knowledge about the particular industry your business is in and presents general highlights and conclusions of any marketing research data you have collected

Company Description: How all of the different elements of your business fit together

Organization and ManagementYour company’s organizational structure; details about the ownership of your company; profiles of your management team; and the qualifications of your key staff

Marketing and Sales Strategies: Your outline to attract and service customers

Service or Product Line: What are you selling/providing?

Funding Request: The amount of funding you will need to start or expand your business

Financials: The critical financial statements to include in your business plan packet

Appendix: Additional supporting information such as: credit history (personal & business), resumes of key managers, product pictures, letters of reference, details of market studies,  licenses, permits, or patents, legal documents, copies of leases, building permits, contracts, etc.

Once you have gathered the information for the essential components, you can reformat it to fit a variety of needs (such as expansion, new business, plan for a lender or plan for personal records). Once you know exactly what information you need for your business plan, search for a basic Business Plan template online to assist you in the process. The majority of the information should come from the business owner because what gives a business plan “life” is you telling the story of your dream and how you are going to make it a reality.

-Stephanie Beveridge and Carrie Harris of GymKix

 Past posts:

Starting a Gym 101: Legal Forms of Business Ownership

Starting a Gym 101

 

Starting a Gym 101: Legal Forms of Business Ownership

Starting a Gym 101: Legal Forms of Business Ownership

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

Last month we provided a list for new business owners to follow in order to start up a new business successfully. We elaborated on the first step: picking a business name and registering it with your county (DBA – Doing Business As); this month, we will delve into checklist item number two: deciding on the legal forms of business ownership.

A major decision you will need to make as a new business owner is how you want your company structured. This decision should not be made lightly, as it will have long-term implications. When trying to decide, please take into account the following:

·     The size and scope of business you hope to attain

·     The level of control you wish to have

·     The level of structure you are willing to deal with

·     The business’s vulnerability to lawsuits

·     Tax implications of the different ownership structures

·     Expected profit (or loss) of the business

·     Whether or not you need to re-invest earnings into the business

·     Your need for access to cash out of the business for yourself

There are four basic legal forms of ownership for small businesses:

·      Sole Proprietorship

·      Partnership

·      Corporation

·      Limited Liability Company

The legal form of your business should be handled by a professional. If you are the sole owner, then an attorney can assist you with deciding what works best for your interests and future goals. If you are partnering with others, we highly recommend that each of the partners consult with an attorney separately first to discuss his/her options. Keep in mind that business partners, especially if they are not related to you, can become a serious liability. There have been numerous gyms that have been decimated by partner disagreements, divorces, and poor planning. It is reasonable to assume each partner will want to ensure that his/her interests are protected in the event that the partnership dissolves.

In our case, our gym started as a partnership between just us (Stephanie and Carrie). As the business grew, we added our mother as another partner. Because we are family, and new to the business world, we never consulted an attorney about our partnership agreement. When our gym grew even more and we took classes and attended business conventions, we realized that a change would be needed. We consulted with our attorney and he recommended that we switch to an LLC (Limited Liability Company)to limit the liability incurred by us as individuals. Talking to a lawyer will also help you find the best option for your business.

-Stephanie Beveridge and Carrie Harris

 

Guest Post: Starting a Gym 101

Business experts and Gym Kix owners Carrie Harris and Stephanie Beveridge

After seeing the popularity of Gym Kix‘ Stephanie Beveridge and Carrie Harris’ Expert Q&A on starting your own gym, we’ve decided to tap their expertise even further! This post marks the first of a series on starting your own gym—from two veteran cheer professionals who’ve been there, done that.

Starting a gym is no easy task. To help new gym owners in getting their businesses set up professionally, legally and thoroughly, we have comprised a checklist of key steps that every business should take in order to start their business out on the right track. These steps are guidelines to follow after you have already completed the necessary research as far as competitors, demographics and feasibility for starting your new business.

1. Pick a business name & register with your county (DBA–Doing Business As)
2. Decide on the legal forms of business ownership
3. Write a business plan
4. Set up professional relationships (bank, business consultant, accountant, attorney, etc)
5. Ensure all legal requirements are met for starting a business
6. Get all licenses, permits and insurance
7. Decide on prices for your services
8. Decide on any financing you will need and how you will get it
9. Obtain a location, building, equipment, etc…
10. Set up recordkeeping/accounting/in-house office system for your services
11. Hire employees
12. Develop a daily operating/managing system for your staff and your business

Each of the above tasks needs to be taken into consideration if your business is to become a successful reality. In this post, we’ll start with the first task on the checklist and then explore each one individually in future posts.

Picking a business name and registering it

A business name is an important part of your business efforts and should not be taken lightly. Know your target market and be sure your business name fits what your services are. Some people say be creative and others say be descriptive when picking a name for your business. In the end it will be solely up to you, but whichever way you decide, be sure and visit the U.S. Patent and Trademark office’s (USPTO) online system to search all state and federal trademark registers to see if their proposed name is being already in use.

In addition, domain names should be searched to ensure your website will be easily accessible. You don’t want your domain to be www.powertumblecentralnewyork.com because there are three other gyms with Power Tumble as a domain name. Keep it simple and be unique! It is also important to be aware of how your web domain might be misinterpreted, take a look at these unfortunate examples:

• A company selling CAD software and Learning CDs was called ViaGrafix – quite innocent until a blue pill hit the market. The company is now called Learn2. Their website was: www.ViagraFix.com

• If you’re known as Big Al, why not call your online fish supplies store for Big Al’s Online?
 His website is: www.BiGalsOnline.com

Once you have decided on a business name you will need to register your county clerk’s office or with your state government, depending on where your business is located. There are a few states that do not require the registering of business names.

A logo for your gym is also an essential part of your brand. If creativity is not your strength, hire an outside business to help create a good logo that represents your business and the impression you want your customers to have of you and your gym. Do not rush this process. This is your main form of marketing and your first impression. Keep in mind that if you have a logo that only looks good printed in four different colors, which can be expensive for printed and clothing items! A busy logo may also be hard to decipher and not immediately grab the attention of your target market.

You will never regret taking more time, but you will regret rushing through such a vital part of your business’s future.

-Stephanie Beveridge & Carrie Harris