In this series, Moja Gear is examining the process of opening a climbing gym business. Who among us hasn’t thought about what it would be like to be a gym owner? In Part 1, we will be discussing the business fundamentals and how to decide whether owning a climbing gym is right for you. In Part 2, we will be following Obe Carrion, a former pro climber and coach who decided to take the plunge and open Method Climbing+Fitness, a rock climbing gym in Newark, New Jersey.

Method Climbing Gym Opening by Obe Carrion

Examine yourself.
Is a climbing gym business right for me?

Just like playing a video game is nothing like coding a video game, visiting a climbing gym isn’t the same as owning a climbing gym business. Before deciding that you want to open a climbing gym, you need to ask yourself some tough questions–and be honest. Discovering after your grand opening that you really hate the smell of climbing shoes and dealing with whiny parents will only lead to regret! Here are the questions you should ask yourself:

  1. How many years of experience do you have working in a gym?
  2. Have you ever run a business before?
  3. Have you ever managed employees before?
  4. Do you have the capability to perform the following task or teach employees to follow them?
    1. Manage and delegate administrative tasks like accounting
    2. Have the capital to fund ongoing marketing
    3. Set routes
    4. Coach climbers
    5. Clean bathrooms
  5. Do you have an extra couple hundred thousand dollars, and could you live without income for the next 12 months?

If you answered “NO” to any of these questions and are still sure you want to open a climbing gym, then you have three options:

  1. Start working to change the answer to a “YES.”
  2. Find a business partner that can answer “YES.”
  3. Acknowledge the risks and continue on.

Note: if you answered “YES” to question 5, then we should talk.

If you don’t have the financial resources or experience to operate a gym but have a passion to make indoor climbing available to your community then a climbing Co-Op may be the right model for you. Check out this article on climbing Co-Ops from the Climbing Business Journal.

Examine the business. Is climbing gym ownership a viable business?

Market research on climbing gym ownership

The first step is to do market research. A lot of market research. The goal is to gather as much relevant data to try and prove (and to try and disprove) that climbing gym ownership is a good idea.

Determine what information you need to know. What questions do you need to answer in order to determine whether a climbing gym is a good investment? Essentially, you need to know how much revenue you can expect to receive, and how many expenses you will need to pay.

climbing-business-journal-map

The Climbing Business Journal’s interactive map of climbing gyms.

Start by researching current gyms. Climbing Business Journal has a map of all the climbing gyms in America. Create a spreadsheet comparing the fees that each climbing gym charges. Look for areas that have a lot of climbing gyms.  What do they have in common? Call the gym owners in those areas and ask about how their business is going. Maybe those areas already have too many gyms.

Pro tip: When you want to talk to an existing climbing gym owner or prospective partner, offer to take them to lunch or to pay generously for one hour of their time.  Do NOT ask them to get together so that you can “pick their brain.”  Find a way to provide value to the person you want to meet with, too.

Franchise opportunities

The benefit of a franchise is that they already know the process of how to open and operate a climbing gym. If you are good at following a process, then this can be a great option. If you are known for wanting to blaze your own path and hate having anyone tell you what to do, then franchising probably isn’t the right route for you.  Either way, you should definitely check with these franchise options. They will be a great source of information during your research phase.

Gravity Vault

Classic climbing gym franchise.

Climb Zone

Not your typical climbing gym.  More like a kid fun center.

Connect with the industry.

Talk to everyone you know. Gym owners, employees, professionals in the industry, investors.  Ask each person to introduce you to another person that may help you answer your unanswered questions.

Climbing Business Journal and Climbing Wall Association have loads of content about gym ownership and host events for networking and learning what’s new in the industry.  You don’t have to be a gym owner to attend or get connected. Prospective owners are welcome too.

bouldering-gym

As you conclude your research, you need to be able to answer the following questions:

  1. What type of climbing gym do I want to own? A small training location, a small bouldering gym, a full-height lead-climbing gym, or a full-service climbing gym with traditional gym services?
  2. What demographics (income level and population sizes) are required to support the type of climbing gym I want to own?
  3. What locations have the right demographics and don’t yet have a climbing gym?
  4. Do these areas have any differences that might be relevant?

Strategy

You are almost ready to start writing your business plan, the document you will share to investors and bankers to show you are a good investment. But in order to write your business plan, you need to think about the strategy of your business.

Strategy is difficult to define. This is why there are so many books about it!

Strategy is the combination understanding a situation and using this understanding in a unique way to make plans and take actions that lead to success.

It is impossible to have a good strategy without research and knowledge. Dedicating most of your floor space to offering “Yoga for Climbing” at your gym may be a cool idea, but it is a bad strategy if the bulk of your revenue comes from hosting birthday parties and Scout groups. Knowing what people want and how you will get it to them is key to your strategy.

There are tons of great strategy frameworks that will help you organize your thoughts before committing to a specific business plan.

Porter’s Five Forces is a business strategy model which prompts you to think about how your customers behave and the options they have for spending their money. Lack of competition does not equal business success.

Opening a climbing gym Porters Five Forces

SWOT – This basic framework forces you to take a look at what you are doing well and what needs to improve.  It’s tough to guess before you start, but you should still go through the exercise.

Climbing Gym Business SWOT Analysis

Good strategy clarifies your mission and helps you decide what you need versus what’s nice to have. There is always more work to be done for a business, and the strategy crystallizes the energy and purpose toward what you need to do to be successful.

Check out this humor article from Evening Sends on what not to do when opening a climbing gym.

Business plan for your climbing gym business

lead-climbingThe business plan is when you take pen to paper and actually write down the specifics of what you plan to do, how much it will cost, how long it will take, and why you will be successful. This is the document that you will share with investors and bankers to show that you have done proper research and that your business makes sense.  It is also the document that will guide your actions moving forward. The strategy work you just completed will guide the writing of your climbing gym business plan.

There are a lot of resources out there on how to write a solid business plan. Check out the resources from the Small Business Administration (SBA) on how to get started writing your business plan.

Be specific in your business plan. While you can change direction later, if needed, investors want to see that you have thought thoroughly about every detail of this business. The more detailed and researched your plan, the more likely they are to believe your funding requirements and return on investment.

Funding your climbing gym business

When buying a business or a franchise, you will typically need to provide 10-20% of the purchase price.  So, if the start-up costs are $200,000, you will need to have $20,000 to $40,000 already saved. With an existing business, the revenue already exists, so the down payment required is typically smaller.  When starting a new business it might be a year or more until you are profitable, therefore, the bank may require you to have a substantially larger down payment. If you don’t have this down payment, then you are unlikely to get financial support from a traditional bank.

So, like we asked at the top, if you don’t have an extra couple hundred thousand dollars lying around, what are you supposed to do?

Find investors. This is a very difficult step and may delay your projects for quite some time. You will likely have to do more research. Chances are that if you are looking at an area big enough to support a climbing gym then there is probably an entrepreneur group, incubator organization, or development council that can direct you toward investors and give you the opportunity to present your business.

Before you talk with these potential investors, have your facts straight and be ready to talk quickly and clearly about your project. You will need to have a 30-second pitch, a 5-minute pitch and a 20-minute presentation ready. You never know when you will get the opportunity to have that critical conversation with the right person.  Check out Part 2 of this series to learn about how Obe Carrion had this critical moment in his journey to opening a climbing gym.

 

The details

If you have gotten this far, congratulations!

Now the real work begins. You can begin working through the details of determining your business structure, name, registering with the state and US government, opening a business banking account, getting all the licenses and permits required, hiring staff, marketing, and ultimately serving customers.

Stay tuned as we follow Obe Carrion and Method Climbing+Fitness as they walk through the details of opening their new gym.


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