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Monday
Jun292009

How to Price a Personal Training Business

Q: “I have been running my own personal training business for over a decade with many long-time, loyal clients. I am planning on moving out of the country soon and am considering selling my business. How can I price a business like this?" – Derek



A: The net worth of your business is equal to the net revenue generated from personal training sessions during the previous year.

It goes without saying that your marketing, wage, payroll and operating expenses have been subtracted from the gross procured to get to your net. Many will negotiate a price using numbers that reflect the expected net for 1+ 1/2 years rather than the year’s actual net, when business is as well established as yours, when the business has a branded program option attached, or when the business has a history of high renewal or resign.

Most believe that these figures can be seen as fictitious, though, and can often lead to concerns with breach of contract. Experts will recommend that a buyer sign an open ended contract so it is best not to address estimated numbers during the sales process.

Studies have shown that new owners may be in need of using your services as a consultant when buying. Establishing this relationship at the point of sales is often recommended.

Ann Gilbert, Reg. Dir. of P.T. & Operations
Shapes Total Fitness for Women
annfitt@verizon.net
www.shapestotalfitness.com

 

A: You may want to rethink simply selling your business. If you have a great accountant or business lawyer, talk to them about the advantages of keeping your business and/or perhaps partnering with someone. If it’s a thriving business, you could still bring in income as a “silent” partner.

Next, consider the following:

Are you the business? In other words, if you’ve built your business by branding yourself and your image as the business, someone may view that as a negative once you’re gone, (thus the advantage of keeping some ownership or all of it and having someone run it). It makes a business tougher to sell.

Take a look at the market demand and perhaps research what similar businesses are selling for in your area. This is something that again, your business expert can help you with.

There are dozens of areas to cover when it comes to selling a business. So my first suggestion is to connect with a solid business resource as I mentioned above, i.e., Accountant or business attorney. They will be able to walk you through the steps and give you an idea on what your business is worth, thus allowing you to make a more educated, profitable decision.

Nicki Anderson, President
Reality Fitness, Inc.
nicki@realityfitness.com
www.realityfitness.com

Reader Comments (1)

Our facility is located in California. We are contemplating having our personal trainers pay rent instead of taking a % of revenue generated. Is that feasible here? What procedures should we follow to prevent having regulatory problems?
January 18, 2011 | Registered CommenterMiron Ilincev

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