To Jason Khalipa, opening a Box is not a hobby. Instead, the founder of NorCal said it is a small business that must be handled with care.
He warned owning a Box, while fun and a dream job for many CrossFitters, comes with all of the issues — hiring staff, paying rent, etc. — of owning a small business. And according to Khalipa, any business must first begin with core values, which is the foundation of any new NorCal location.
After establishing those fundamental beliefs, Khalipa will then consider two factors: can he find real estate that is “too good to be true,” meaning the location or the lease is amazing for the set budget, and does another NorCal CrossFit location have a valuable staff member proven ready to operate a Box?
Juliet Starrett, the CEO of San Francisco CrossFit, stated when offering business advice to Affiliates, she is often surprised at how potential Box owners are unrealistic with their finances. That includes choosing a space within your budget and ensuring it is zoned correctly.
But before even looking for locations, both Khalipa and Starrett suggest gaining coaching experience and, of course, receiving at least your Level 1. While it can cost upwards of $1,000 for that certificate and others like it, such education is necessary. But, Kelly Starrett, the co-Affiliate of San Francisco CrossFit and Founder of MobilityWOD, stated members can tell a difference between good coaching and good administering. So, when a Box’s doors open, Kelly explained it should not be that Affiliate’s first time coaching a class.
Ben Bergeron, the Affiliate of CrossFit New England, said Coaches and Affiliates should focus on pursuing excellence, both in coaching and in business. “Pursuing excellence is every time they think about their business, their thought should be, ‘How can I make this better for the customer, not for me?’” explained Bergeron. And for him, that includes the little details — like the website, your brand’s logo, sales, having toilet paper in the bathroom, etc.
Bergeron’s details also include the importance of clear zoning and a detailed lease, as well as making sure contracts with your employees are clear. He explained contracts don’t need to be loaded with legal jargon, but they must instead clearly state expectations and roles.
When opening San Francisco CrossFit, the Starrett’s did not quit their full-time jobs. They admitted that part will be tough for budding Affiliates who are excited about quitting their current jobs to pursue their passions. But, keeping that full-time job will financially help your Box in the long run, they said.
In terms of trends, Juliet noticed two when it comes to opening a Box today:
Model One: Partners in business who receive investments to open a “shiny” CrossFit gym. They open their Box filled with brand-new equipment and all of the latest technology.
Model Two: A sole entrepreneur who needs time to acquire top-notch fitness equipment for the Box.
Juliet recommended following Model Two. “Overhead is a killer and it’s going to take a long time with a relatively small CrossFit gym to make up a $100,000 investment,” she said. “So I think starting small and growing slowly is still a good model in the CrossFit gym world.”
Overall, Kelly said the best product you can offer is your coaching staff, which is one thing he is proud of at San Francisco CrossFit. “Any athlete can walk into nearly any sport and we have someone who can coach them at that appropriate level … I mean, it’s crazy, the sophistication that happens at our gym,” he said.
But, the Starrett’s admitted having a good, loyal staff is expensive. And Khalipa agreed. “We have really good retention rates with our employees because we give them opportunities in the company. Otherwise we would force their hand [and they] would have to leave,” he said. As a rule of thumb, there are two full-time and two assistant Coaches at each NorCal location.
At the time San Francisco CrossFit opened, there was no one in the market that the Starretts could talk about the business with, said Juliet. But today, there are dozens of CrossFit Boxes and business resources Juliet would recommend looking at before opening a Box. She suggested taking advantage of the saturated market, but never losing sight of your own mission.
“There’s so many resources available. You can even, on your own, make a really pretty, cool-looking website without even hiring anyone. But I think making everything look shiny and nice and forgetting that your product is your coaching …. that’s a big mistake,” said Juliet.
Ultimately, Khalipa said it boils down to what Glassman always teaches: care. Khalipa recommended caring for each member that walks into your Box, as well as caring for the space they’re working out in and paying attention to the coaching you are providing.
Finally, Juliet said it’s key to maintain an at-home gym. “We have a joke with all of our gym owner friends, which there are a lot of them,” said Juliet. “And we’re always patting each other on the back saying, ‘Great, you want to stop working out yourself? Open your own gym.’ Because at our gym, when we’re at our gym, we’re at work.”
Step 1: Secure the capital. Do you have enough money to open a gym? Set a budget and a timeline of goals.
Step 2: Do you feel comfortable coaching? Or do you have someone who could coach?
Step 3: Do you feel that there’s a market for a CrossFit gym where you want to open? Is the market saturated? Are there 20 CrossFits in your town of 50,000 people? Maybe it’s not a good idea to open up there.
Step 4: Secure a location. Negotiate a lease.
Step 5: Have a vision for the build out. It’s a competitive market. The garage gym days are still OK, but what’s going to make you different from your competitor? Why should somebody choose you? Are you opening a gym for you and your buddies to hang out at, or is it a place that will be put to use serving the community?
Step 6: Order your equipment and build out your gym. Do you have someone you trust to build it out? What is it going to cost?
Step 7: Market your Box, but refer to your budget to determine your advertising limit.