WAG Using an investor

[BarCoach]

Someday I will open a gym. I don't yet know when that day will be. I've been reading business books, have written a business plan, have written sample schedules and of course I continue to research drills and grow as a coach. I've been at my current gym for 4 years and I love most aspects of it there. However, the atmosphere has become worse recently and I'm not sure how much longer I can stay. I will stick it out for now because I know it will get better soon (like an abusive relationship, it comes and goes in waves). But I am considering other options. Rather than finding another temporary coaching position I am trying to find a way that I can open my own gym sooner than expected. So, my question:
Should I consider asking one of my parents to be an investor? She is the founder and CEO of a big company with 6 branches in our area. Her daughter came to train with me from another program and I know they both love me now. I do realize it could turn out badly. But is it worth asking ? Thanks.

 

[COz]

Depends what you would want out of the relationship besides money.
Never underestimate how much a keen parent with their own business can help you, but you have to be willing to accept help with more than just money. There is nothing more frustrating than trying to help someone who doesn't want help.
If she is a founder and CEO she will be very likely to want some control over how things are run. If she says that communication needs to be better and wants to set up a mailing list etc, then let her do it.

You could always use her as a sounding board about the viability of opening your own gym before even thinking about asking her if she is interested in investing. Ask her to think of things you might have missed. Ask her how she would run things in your situation. This would give you a good idea of how the two of you might work together and whether your ideas are compatible.

 

[BarCoach]

Hmm, interesting. I think I like the idea of working with her. I'm sure I'll need lots of help on the business side of things and she clearly knows her way around that sort of thing. I don't know her well but based on the conversations we have had, I like her very much. She is very busy though. She only brings her daughter one or two times a week and has a few other kids to take care of.
Email or over coffee?

 

[COz]

Email or over coffee?

Firstly, just ask her quietly on pickup or something if she would be available for a coffee sometime so you can get some advice about some potential business things.
This gives you an idea straight away as to whether she will make some time for you. If she has significant trouble finding time for coffee for you, then you might be able to get some business advice from her, but she probably doesn't have enough time to work with you. Making time for you doesn't mean she could work with you either, but she might still be able to give you lots of advice and doesn't rule out investing, but I wouldn't count on it.
Giving her warning that you want advice means she won't panic that you need to tell her something disturbing about her child or the gym etc.

 

[gymbeam]

also keep in mind that once you ask her, the cat's out of the bag and your gym could find out.
very exciting though! best of luck to you!

 

[BarCoach]

I'm very nervous about that. She has been with me for about a year and is not often at the gym. She picks her daughter up about once a week but doesn't stay long and hasn't become close with the other parents. So I'd probably be ok, but it only takes one comment for the rumor to start. I don't really want to leave. I like a lot of things about the gym but I am uncomfortable there and made to feel bad often and feel like I'm walking on eggshells. If I hadn't already been planning to open a gym I might just stick it out.

 

[COz]

You have to be prepared to not have a job anyway. The usual recommendation is to be prepared to live on savings for a minimum of 6 months when starting a new business. It will take you a while to sort out venue etc and whilst you're sorting things out someone will probably get wind of it anyway. You should assume they will find out before you are redy to leave.

I'm very nervous about that. She has been with me for about a year and is not often at the gym. She picks her daughter up about once a week but doesn't stay long and hasn't become close with the other parents. So I'd probably be ok, but it only takes one comment for the rumor to start. I don't really want to leave. I like a lot of things about the gym but I am uncomfortable there and made to feel bad often and feel like I'm walking on eggshells. If I hadn't already been planning to open a gym I might just stick it out.

So that means that you are not already close to the mother, right?
She might like the way things are working at the gym. There are a lot of uncertainties in switching a child to new gym where the owner is crazy busy. You also have to consider that she may not want to switch gyms to follow you.

Basically you won't know unless you talk to her. You could say it's something that you're considering doing in a few years time and ask for advice. If she is enthusiastic or asks for details about what you don't like at the current gym then you could decide whether you tell her you'd like to do it sooner rather than later.
Play it by ear.

What other options do you have for raising start up funding?

 

[gymdog]

I wouldn't. I think that's a huge ask to someone who's never broached the issue with you. I would also assume there's very little chance she wants to own a gymnastics gym. Every instance I've seen of this has gone badly. Most never get off the ground in the first place. Opening a gym is not easy and usually the investor pulls out when they realize. But mostly, I think it's huge assumption that she has enough extra money to want to do this just because she has a fairly successful business. It doesn't sound like you know her well enough to know that status of her finances.

 

[BarCoach]

I know her purely through the gym and her daughter so I wouldn't say we're close. I know that she likes me and I think it's enough to follow but I'm not positive.
As of earlier this morning I have a couple meetings scheduled with the managers of local sports complexes about the possibility of opening a gym at their facilities. Who knows if something will come of those. It would be great if they did. Other than that I will have to wait to get finding until I am ready to take out a loan (the original plan was to aim for about 5 years). We'll see!

 

[sce]

You could always use her as a sounding board about the viability of opening your own gym before even thinking about asking her if she is interested in investing. Ask her to think of things you might have missed. Ask her how she would run things in your situation. This would give you a good idea of how the two of you might work together and whether your ideas are compatible.

I like this. Start by meeting with her to discuss your plan.

 

[BarCoach]

I like that too. Good idea. Thanks.

 

[Aussie_coach]

It's an exciting dies but a lot of risk is involved. Starting a new gymnastics club is a big, big inventsment. It is an expensive business to start due to the amount of equipment needed, and gymnastics equipment is not cheap!

It'd hard to open a new gym because an already established faulty will have more equipment, and well established coaches and reputations. Don't assume your whole team will come over with you.

When you do start a new gym you need to expect to start from scratch and build up your client base. It can take a long time before any profit is seen from a new business, bank of a minimum of 6 months with no income, but it can be many years. Basically you will need another job to support yourself while you are growing.

I personally would not ask a parent to invest, especially as this child only trains a few days a week and has only been with you do a year. Like you and how you coach is rarely enough for a patent to invest that sort of money in you.