Are you embarking on a business adventure in the exciting world of fitness?
It takes hard work and dedication to get your body in shape, and the same can be said of your fitness startup.
To increase your chances of long-term success, you’ll need to know how to attract investors.
Here are our top 5 ways to secure investments for your fitness startup.
Go Into A Partnership
One of the simplest ways to secure investment in your fitness start-up is to go into a partnership.
Many potential investors are looking for ways to invest in startups without having to get involved in the running of the business.
This is called a silent partnership, and it could be the solution you’re looking for.
Silent partners provide startup capital but don’t take on any management duties.
It’s up to you to take care of all the admin and ensure that they are informed of how things are going. Remember that they are in it to make money and need to see results.
While your fitness startup is the culmination of your passions and dreams, it’s also a business.
Be professional about it, and you’ll earn the trust of your business partner/s.
But if you’re not very admin savvy, you don’t have to stress. There’s a simple way to streamline your day-to-day admin tasks.
Get yourself some good gym management software. This not only frees you up to spend time on getting the physical business up and running, but it also minimizes admin errors.
Better record-keeping means more accurate reporting. And that will satisfy any potential business partner investing in your startup.
Take Out A Loan
There is always the conventional option of a loan. Of course, banks are not inclined to give business loans to startups that they see as risky investments.
If this is your first business venture, most banks will see you as a risk, but that doesn’t mean it’s an impossible task.
As with approaching any investor, you’ll need to have a well-written business plan and many other documents.
They will want to see your financial projections, showing the returns you expect to have on the investment.
There are different ways to approach taking a loan from the bank.
While they may not approve you for a business loan, they may be prepared to offer you a personal loan.
This will usually be a much smaller sum, but it may be the way to go.
Bear in mind, though, that loans have to be repaid, and you may struggle to make the repayments. You’ll be paying interest on loans you take.
Private lenders are another option. They aren’t as strict about creditworthiness as banks, but they charge higher interest rates.
Start A Crowdfunding Campaign
If you’d prefer to avoid being accountable to the bank, there’s always online crowdfunding.
This is relatively easy to set up on crowdfunding websites and even your social media platforms.
If you choose to go this route, post regular updates about how the campaign is going and what the funds will be used for.
But it is not without its drawbacks.
Unlike a single partner who contributes a large amount of capital, crowdfund investors contribute smaller amounts of capital.
If a large enough network of people are involved, you will raise what you need, because of the sheer volume of investors. If not, you won’t.
You’ll also have to spend a fair amount of time online, engaging with people, and drumming up support.
Focus on your goals, and what you see your fitness startup becoming down the line. Upload images of the premises undergoing renovation to become a gym studio or the equipment you bought.
Just like formal investment platforms, crowd funders want to know where the money is going.
If they see what you’re using it for, and like what they see, they’re more likely to invest more of their money into your dreams.
Offer the highest investor (or perhaps the top 3 or 5) free services at your business as a reward.
Pitch To Venture Capitalists
Venture capitalists are always on the lookout for innovative and promising startups to invest their money in.
They’re usually prepared to take larger risks, with the promise of higher rewards. They might be your next step if the bank turned you down for a loan.
Unfortunately, this means you have to offer something in return, like a percentage of the profits.
However, some of these investors may want more than you had in mind, like a larger share of the business.
Entrepreneurs are often desperate for capital to start their businesses and agree without thinking it through.
Pitch your ideas to reputable venture capitalists for investment in your fitness startup and your chances of success.
But don’t go unprepared – you’ll need a clear business plan to show them. And it may take several meetings and hashing out the details before all parties concerned are satisfied.
Take note that your business will evolve and grow.
A percentage of the profits or a share in the business now may seem like a reasonable request.
However, you may feel differently when your small gym has grown into a thriving chain of fitness centers offering everything from yoga to martial arts classes.
Get Your Startup Sponsored
If all the above seems too daunting, an official sponsor might be the answer.
Approach a sports association that aligns with your business ideals. Or a manufacturer whose brands target the health and wellness sector.
Examples of this would be health foods, sports drinks, energy bars, gym apparel, or exercise equipment.
Of course, there’s a trade-off.
By agreeing to sponsor your startup, you’ll be required to state that in your advertising and marketing materials, and on your website.
You’ll probably need to allow them to market their sports drinks on your premises, or you’ll have to use their gym equipment.
The upside of acquiring an official sponsorship is that you’ll have an investment in your business startup.
But there’s another fantastic benefit too. By associating your fitness business with a wellness brand, you’ll instill confidence in your product.
The downside is that any negative publicity either party suffers tarnishes the other’s reputation.
This can spell disaster for your startup before you build a strong enough reputation of your own.
Think carefully before choosing this option, and only agree if the brand is well-established with a good reputation.