Week 4
Financing a Business Student: Christina Riggs
Professor: Chad Behnke, MBA
KHS394: Sports Business

Career goals are in abundance when I ponder what the possibilities of finishing my degree might bring. The main one, which is the accumulation of my 5 year plan, is to own my very own fitness facility, not just own it, and operate it as well. There are many smaller goals that need to be reached in order to get to my BHAG (Big Hairy Audacious Goal). I would like to complete my state certification for personal training along with completing the Group exercise Certification. I would like to train and compete in a Figure Competition, really to prove to myself that I can do it. Another goal of mine is to start up a home boot camp class focusing on families. The more I’ve been exercising with my step son the more I feel I would love working with kids and helping them to understand the importance of healthy eating along with exercising.
The business that I will be putting into action in 5 years is a Fitness Facility that is geared towards adults and children. Our goal at is to get local families back in shape through fun, education, hard work, and exercise. Unlike many gimmicks promising a "quick fix" that does not work, we have a different philosophy. Our mission is to promote a well-rounded approach to healthy lifestyle modifications as a family or individually through education and innovation. This means that we will help you develop a fun, comprehensive plan that works for you specifically. My target population for my business is families of any age and size. I would hire those that have experience with children as well as those that have the experience with the teen and adult crowd. I will have a daycare area for ages 6 weeks to 13. Though really hoping that if you are bringing in a child over the age of 9 that they join you in the exercise routine that you are completing for the day. I do believe that children follow in their parent’s food steps. They are most definitely in a follow what you do kind of world. For children just starting they will need to undergo a 1 hour a day/ 3 days in a row training to make sure they understand the importance of safety in the exercise facility. After they have completed that and been given their certificate of completion they will be allowed to use the equipment in the facility.
There will be an area where children will complete group exercise classes that range from 15-35 minutes. These will be instructor taught classes and will be taught by some of their own peers, as these peers will be trained in the area prior to the teaching. An adult trainer will be a part of the class to cover ground control and make sure the members are following the class and using proper form on exercises to prevent injury.
We will have family group exercises classes as well. There will be modification moves taught to allow the child or the adult to modify where needed. Our members will understand that they are not competing with anyone around them, the only person they are competing with in the person looking back at them in the mirror. It’s important to be better than you were the day before, always strive to be the best you personally can.
The amount of staff I will have on hand at first will be minimal. As I will have internship positions available to those whom are pursuing a degree in Exercise Science. Hiring new staff members in trade for membership will be one of my top priorities at the beginning of the business opening. I will also ask for family members to help out at the facility for little to no pay to help get the business up and running. After the initial start of the company, around the 6 month mark, I will be hiring 3 front desk associates who will be responsible for checking members into the facility along with keeping up with the cleaning of the restrooms and wiping down the equipment periodically throughout the day. I will be inclined to hire new graduates as personal trainers as long as they have 6 months experience in private personal training or private taught boot camp type classes if they have not worked in a gym previously. New hires will go through a week of probation training to make sure they understand what our core values are and to make sure we are on the same page when it comes to working for my business.
Self-Funding is the first avenue I will be looking at. I will be using the monies saved from the previous 5 years, up to the opening of the facility, of personal training and boot camps that were completed at an offsite location. I will also reach out to my father for financial help. If those option aren’t possible I will look into a private loan or grant for first time women business owners. The private loan might be a stretch because it depends on my credit history along with what collateral I have to bring to the table.
My father is a successful business man in his own flight and I am confident that he will be willing to co-sign on a loan for my business. First time loans are hard to get for a startup business, they look at credit history, length of time in the current business area, your business plan along with the collateral you have to help back up your loan in case of default.
When thinking of ways to raise money prior to the opening for funding of the facility, I would sell Facility memberships at a discount. I could hold a membership drive and sign up prospective members who will be entitled to pay $500.00 for a two-year membership and $200.00 a year in subsequent years. I could sell 200 memberships, in turn I will have $100,000.00 to pay for construction costs for the facility. If I’m unable to use the funds before the facility opens, I would be able to use the 200 membership contracts as collateral for a loan. This kind of collateral is called contractually obligated revenue or contractually obligated income (Fried, DeSchriver, & Mondello, 2013, p. 151). In the case of borrowing money from my parent I would take some specific steps to maximize the benefits for myself and my father. Most monies borrowed from family members are rarely ever documented, thinking that their own family would make payments on time and not fail to pay their debt. “Though there are some courtrooms fills with people who have broken verbal promises” (Fried, DeSchriver, & Mondello, 2013 p. 151). To avoid such issues I would make sure to “document the loan with a formal agreement, develop a formal repayment schedule, pledge security, or collateralize the loan, keep accurate records of all repayments, make sure that there is proof that the business was solvent when the loan was made, and provide the lender with a detailed business plan specifying how the loan will be repaid” (Fried, DeSchriver, & Mondello, 2013, p. 151). There are always factors that could prevent anyone from having a successful business. When you start your business for the right reason you are more inclined to stick with it, well because you love what you do and you didn’t start the business just too strictly make money. If you strongly believe in what you are selling or promoting and believe it will fulfill a real need in your current community then you are more inclined to continue reaching for your goals. “New business owners frequently lack relevant business and management expertise in areas such as finance, purchasing, selling, production, and hiring and managing employees” (Patricia Schaefer). It is pretty important for all businesses to have a business plan. Numerous small businesses flop because of necessary shortcomings in their business development. “It must be realistic and based on accurate, current information and educated projections for the future” (Patricia Schaefer).

Reference:
Fried, G., DeSchriver, T., & Mondello, M. (2013). Sport finance. Champaign, IL: Human
Kinetics.
http://www.businessknowhow.com/startup/business-failure.htm The Seven Pitfalls of Business Failure and How to Avoid Them, Patricia Schaefer