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What to look for when buying a gym

What you don't know can hurt you.

Are you looking to purchase sell an existing facility?

Whether you are trying to get started in the health and wellness industry or are looking to sell your gym or fitness center, there is a lot you need to know. Purchasing an existing fitness facility or opening a wellness center is not as easy as you think. There are a lot of details you need consider before opening up your checkbook or starting your search for funding.

Remember, Ignorance in the industry will lead you down every path besides bliss and success. By taking the time to do your due diligence, you can avoid taking on someone else’s nightmare and saving yourself a lot of time, money, and frustration. Purchasing an existing facility can be a smooth process IF you know what to look out for.

Whether it is wellness, fitness, medical, or another industry there are important details to consider. Gro With Us has the knowledge and skills to prepare you for such a large purchase like this. We want to make sure that you benefit from our years of experience and are satisfied with the overall process.

We’ll make sure that you ask all the right questions and get the information you need!

Facility Valuation

The valuation of the facility is the first component you must identify. The value will help you determine what types of financing options will be available to you.

EBITDA

Earning Before Interest, Taxes, Depreciation and Amortization multiplier can also play a role in the overall facility value. Taking variables like desirability of the location, projections for the upcoming months, equipment quality, facilities and staff and most important the actual revenue of the facility. Depending on the scoring in each of these areas will depend on your EBITDA multiple which will give you the actual cost for the facility.

Comparable Facility Sales

A facility will be compared to the price of a similar property that was recently sold. By using this method you are able to establish the value of the health club in addition to the EBITDA multiple. Finding a comparable facility sale gives the current owner an idea of what they should be asking for while also giving you the ability of how much of your finances you need to prepare for a purchase.

Monthly EFT

Gro With Us recommends doing an automatic bank account transfer revenue analysis over the last 24 months.

Fitness Equipment Asset Appraisal

This plays an important factor in the value of the fitness facility. With the appraisal, the current market value is also added to the sale price.

Our team of professionals can help you find the answers to all of these questions and more. We will show you what to look out for, how to proceed with negotiations, and help you secure funding for your purchase when the time comes. Besides making sure you make the right purchasing decisions, we can help you revitalize, renovate, and offer our consulting services to ensure your facility opens to success!

 

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