After years of personal training with Brian, he reveals to you that he wants to retire, and sell his personal training business.  A bell goes off in your head.  How hard would it be to purchase a business?  What do you need to know?

You ask yourself the following questions:

• How do I find out what the business is worth?
• How can I get a line of credit towards the business?
• If someone gets hurt, what is my liability to the client?
• If I take a client to lunch, can I simply eat? Do I have to be discussing training the whole time?

We are going to explore all of the above questions, and hopefully get you into your business with a great deal of confidence and a very large profit.

Purchase a Business

So, what is Brian’s business worth?  That question is only answerable by you.  A business should be worth a year’s worth of profit.  Can you operate that business and make that income?  What are your abilities to either sell the yearly estimated profit or perhaps more?  You would actually have to do some investigating to find out how Brian has been selling his training sessions and operating his business. Does the business come with his client list?  Is he selling his own equipment?  What is it worth today?

Purchase A Business

Acquiring Business Credit

Buying his business came with equipment and a short list of clients.  Advertisement these days are expensive; or is it?  With technology today, we have access to free advertisement in its rawest form.  Social media is one of our biggest allies when it comes to advertisement.  For the most part it is free.  The client list is a great idea, because you can reach out to each client and let them know what specials you are running.  The equipment is a good asset, but it has to be usable.

What if you wanted to purchase new equipment?

It may be in your best interest to lease the new equipment and purchase your supplies on a credit card so that your business will build its credit.  Once your credit is good, you could take a loan from an asset-based lender and invest more into your business.

Promoting Your Business

Since the business is mobile, you may choose to visit people at their house and continue their fitness goals from there.  There is a way to also attract customers by offering a stationary place once or twice a week.  Perhaps a workout at the park on Monday and Wednesday mornings.  By giving a specific location as to where you will be, you will see more customers arrive to your stationary site.  This also allows for referrals and customer inquiries.

You could also accommodate your customers at a private gym in your own home.  The only question left to ask is what happens if someone gets hurt in my home while training?  Would my homeowner insurance cover it?  Ultimately if you are conducting a business in your home it might be a better idea to just rent out a private room in the house to the business. You should then already have liability insurance on the business, and you can leave your own personal liability out of the loop.  It is also advisable to have your clients sign a liability waiver as well prior to their workouts.

Legitimate Business Expenses

Finally, you and your client are going to a restaurant so that you can teach your client what they can choose when eating out.  Must your entire meal be all about business to qualify for a business expense?  In this case, the meal is about business.  If your client can not figure out what he can eat when taking his wife to the restaurant, it is likely that he will fail on the fitness plan that you have prescribed for him.  You don’t have to talk about diet during the entire meal or lecture him about the greasy fats in the burger, but you have to have a business purpose.  When counting this meal as an expense it is wise to write on the receipt what the meal was for and give it to the person who is doing the accounting for your business.

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Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company