It is a proven fact that 80 percent of small businesses fail within the first three years of birth. But these statistics are like any other workout. As CrossFitters, we are not fazed by this challenge.
A common mistake in starting a new business is when an eager owner gets too excited of the overall gross revenue pouring into their baby.
The problem? You begin taking too much money home way too fast. When this happens, the debt lasts the life of the loan. So, below are some of the best solutions to becoming debt free in a year.
First, it starts with people. Who has your back and do they share your mission? When we started, my two business partners and I had a desire to avoid getting a bank loan, or at least pay back that debt as fast as possible. We also had other means of employment to do that, and we shared the same vision.
Finding a facility: We focused on the amount of square footage we could get at a fair price. Our three main focal points of finding the perfect facility are as follows: Finding a location that was having trouble being rented so we could negotiate lease terms, a space that was permitted use (could be used as a gym) and finally a space that did not require any zoning permits.
Then we started the numbers game: How many people could we train? We had a vision of at least 50 members within the first three months with the hopes of over 100 after six months, and we needed the space to facilitate that many people. The property we found was 8,500 square feet. It was absolutely ugly, but absolutely perfect.
So, we began negotiations. My partners and I made a list of all the things that needed to be complete in order for us to move forward. At the end, the bill was $25,000. We asked the property manager to make the necessary investments. Thankfully, our property manager liked and respected us, so after many conversations it was evident we shared the same values, which is key.
We made a deal. We would invest the $25,000 into this building but in return we would get an entire year of rent for free. Why was this a great deal? I knew we could get a bank loan, and we were approved for one.
Because we weren’t paying rent, our bills were minimal. The majority of our gross revenue went to paying the credit union back. Although we didn’t take a paycheck home for the year, we knew that what we were doing was essential.
Today, we are a debt free gym. There are two main points from this is.
With all that being said, here is a finalized list to becoming debt free in a year:
This scenario may not work for every Box owner out there, but rest assured these steps will eliminate any doubt in your mind about becoming debt free.