By Jeff Larsh, TwoBrain Mentor
“It was such a great opportunity.”
“I would never have gotten another chance.”
“It made sense at the time.”
“I thought it would be so cool to own two locations!”
“I wanted to help more people.”
No matter what your reason(s), you have found yourself here: with a second location and it’s not everything you thought it was going to be. The notoriety isn’t as grand as you expected. You aren’t helping more people. And you certainly are not making double the money (and sometimes less than you did before).
I am not going to beat around the bush. You are in entrepreneurial limbo and if drastic change does not happen soon, you can lose one or both of your businesses or perhaps even worse, you will be exactly where you are now in 5 years. So pull up your bootstraps, it’s time to get you back to where you belong.
Step 1: Lock up your Legal
If you are the sole owner, skip this step! If you are in a partnership, you need a solid Shareholders Agreement. This needs to be done as soon as possible. You are about to make drastic changes and you and your partners may not see eye to eye. In the case that things do go south, a Shareholder Agreement will outline exactly how those business relationships are going to end, in order to be fair to all parties involved.
Step 2: Divide and Conquer
This one is going to be hard and I can already hear most of you saying: “there’s no way it can survive on its own!” but you need to cut the cord between the gyms. Separate the expenses. If there are any that are shared, divide them out. If your second location cannot stand on its own as it is, you either have to make drastic changes to how you are operating or you need to shut it down.
Step 3: Back to Basics
It’s been a fun couple years with you playing with lots of great ideas and there will come a time when you can return to these. But now it’s your responsibility, and your duty, to step up and do what is truly hard: and that is aggressively streamlining where you spend your time and money.
You only have a finite amount of time and ALL of it needs to go towards the core aspects of your business. You need to drop any and all extra projects that aren’t core to your operations. Any side hustles? Shut them down. Retail initiatives? Gone. Extra programming online? Not anymore. If it’s something that only exists because it is “nice” for your members to have, it should probably go. Get focused.
Financially, we are talking a significant limiting of expenses. You need to make every dollar count. Got a class that has low attendance? Drop it. Buying extra SkiErgs? Not for the next little while you aren’t. You need to become obsessively aware of where you spend your money and then limit this spending at all costs.
Step 4: Ask for Help
If you have a second location and are struggling; you are not the only one and you do not have to find your way out by yourself. Others have travelled these roads before you and can help you navigate the potholes and tight turns, but only after you have put aside your fears and doubts and asked for help.
Owning a second location can at times feel like a burden and add a tremendous amount of stress but if done right, it can also be rewarding, profitable, and a true marker of entrepreneurial success.
Are you ready to do what is necessary?
Jeff Larsh owns Tidal CrossFit, with four locations in the Toronto area.