Business Spotlight: Snapping a Business Into Shape
The new owners of Snap Fitness in Nixa hope to shape their futures in fitness
Monday, December 21, 2009 7:22 AM
Getting into shape is always one of the top New Year's resolutions. Each year, though, polls show that most people don't have the endurance to meet that goal.
Lynda Atwood is three months into the job as co-owner of Snap Fitness in Nixa.
Owners: Lynda Atwood and Anne Cain
Address: 830 W. Mount Vernon St., Ste. 7, Nixa, MO 65714
Phone: (417) 725-6656
Services: Fitness oriented cardio and strength weight training and tanning with 24/7access
Employees: 2, with 2 contracted personal trainers
Lynda Atwood and Anne Cain, the new owners of Snap Fitness in Nixa's West Side Plaza, are hoping their new venture will bring them a long-lasting and profitable career.
The two Springfield-area natives and longtime friends bought the existing Snap Fitness 24/7 center in September. The center is one of 2,000 locations in the Chanhassen, Minn.-based franchise system, which attempts to differentiate its centers by offering a no-frills exercise experience. There are no aerobic rooms, day care services or showers in these facilities, just exercise equipment and a tanning booth. The centers are open to members 24 hours a day, 7 days a week via an access card.
Cain says a Minnesota-based owner who remotely ran the center in Nixa opened the location in 2007.
"The previous owner had purchased several locations and didn't have a hands-on approach with this one," Cain says. "This gym was just cruising along at break even."
When the two friends decided to open a business, they found the center for sale and decided to take the plunge into the fitness industry.
Taking a swing
Cain is no stranger to fitness. The former professional golfer owns the Anne Cain Golf Academy at the Golf Club of Amelia Island in Florida, where she resides full-time.
Lynda Atwood lives in Springfield and is a freelance travel consultant. Both of their established careers are rooted in the travel industry, which took a hard hit in the economic downturn.
"We started brainstorming ideas, looking at ways to diversify our interests," Cain says.
After deciding on the fitness industry, they began looking at franchises and learned that Snap Fitness had been ranked in the top franchises in several categories by Entrepreneur Magazine and was No. 16 in the 2009 Inc. 500, with $32 million in 2008 revenues, up 5,900 percent compared to 2005.
The partners also were sold on the benefits a national franchise can offer members, including access at facilities across the country and discounts for members through other national retailers.
Their next education was financial. In pursuit of the roughly $77,000 to $250,000 needed to start a franchise, according to Snap Fitness' Franchise Disclosure Document, the two learned just how tight the credit markets had become.
"In this environment, the only way to get financing is to go through the Small Business Administration," Cain says.
The pair worked with Score, a nonprofit partner with the SBA that pairs veteran executives with budding business owners, to obtain an SBA-backed loan through Liberty Bank. They paid $215,000 for the business, including rights to the Ozark territory, and financed $165,000.
Their Score counselor, Philip Greene, a retired executive and accountant living in New York, says he felt the partners have what it takes to propel the business.
"I worked mostly with Anne, and she is very sharp, highly focused," Greene says. "The challenge will be to build the membership, but I'm sure they will do great."
Cain travels to Springfield about once a month and completes administrative work, while Atwood handles the day-to-day management.
The partners felt, to help boost the 2008 revenue upward from $155,000, they needed to expand the staffed hours to help market the facility. They hired a part-time employee to support the general manager and contracted with two new personal trainers.
Memberships start at $34.95 a month for a single membership and go up to $59.95 a month for a family, with discounts for prepayment. There is an additional $49 set-up fee.
Snap Fitness-Nixa had 245 members in September, a number that had increased by 28 percent by the end of November. "Our goal is to have that up by 50 percent in the coming year," says Cain.
Once they meet their membership goals, another hurdle will be retention. Cain says the industry standard for attrition is around 35 percent. "We hope our continued efforts will keep that down to 25 percent or less," she says.
Revenue from personal training has increased to 18 percent in November from 2 percent under the previous owner.
Roy Koyama, a performance enhancement specialist and 22-year personal training veteran, is one of the contracted trainers.
"Anne and Lynda are awesome; I don't think you will find more passionate people," he says. "If there's a piece of equipment or anything we need, they listen and it shows up."