One of the first things to consider as you begin thinking of starting your own sports facility is how you’ll get the financing to get started.
Once you’ve put together a business plan and have a general idea of how much money you need, you can begin to evaluate your options.
Some owners start small and build their client base up over time until they have enough capital to afford their own facilities. For others, owning a sports facility may be a second career. They might already have the capital on hand to invest in their own facility. Most of us, however, opt not to start totally alone, either because we can’t afford it, or we’d like to incorporate others in the community who will be invested in the facility’s future.
Choosing a financial partner is one of the biggest decisions you can make as you start a new sports facility. The repercussions of your decisions are almost always long-term, whether good or bad.
Some things for owners of sports facility start-ups to consider as they begin to select their financial partners:
How will this partner influence the culture of my sports facility?
Before finances are even considered, think about any potential partner’s personality, behavior and values. You should be able to trust anyone you’re partnering with. Also, you should be confident that their involvement and behavior will only be a positive reflection of your sports facility. Furthermore, consider what skills and knowledge you may lack yourself. As you plan your employees’ and partners’ roles, the tendency is to involve people who are similar to yourself, when your operation may truly benefit from someone with an opposite skill set.
What will partners get in return for their investment?
Will the perks for your partners’ investments be strictly financial? Or will they include involvement in the decision making process? If so, what types of decisions will they be able to make? How much weight will their decisions be given? Leadership dynamics are extremely important to your facility’s operation, so this needs to be clarified. Furthermore, what benefits will partners be given in the actual facility (such as discounts on services for themselves and their families)? It’s imperative that you clarify such ancillary benefits upfront to avoid assumptions and misunderstandings.
What’s their exit strategy?
What if your partner, for one of a multitude of possible reasons, decides they want to sever their ties with you or your facility? Now is the time to think through worst-case scenarios, not when those scenarios are actually are upon you as you’re trying to keep a facility up and running. Along those lines, it’s imperative that you clearly establish what the partners need to do in order to retain their benefits. Maybe you’d prefer that some benefits only kick in after a certain time period, for example. All those conditions need to be clarified.
Once you establish what your partners will receive and how they will receive it, consult with a trusted attorney to draw up your partners’ contracts. The time you spend on this now will be extremely valuable down the road.
For more advice on how to improve or start your sports facility, book a consultation.