Tanzschule: Wachstum trotz Kapazitätsgrenze

0:00Unternehmer/Gast Uh, I have a dance school, two locations. Wonderful. Uh, we do 2.7 mil and thank you. Uh, been in 5 years in business, so aiming for 3 mil this year and at least 10 plus in the future. Constraint will be space capacity. Facility space. Heard. So, yeah. Okay. >> What would you like to know? >> [laughter] >> Well, is that is that just what's stopping you? Is just getting another location?

0:23I could do if I can get to 3 million this year, I'll be at probably 80% capacity running my core programs. Okay. Right, which is the key. Um, I could add daytime. There's things I could do on the side but not priority. Right. So, next step in scaling at that point is is it additional locations or acquiring dance studios? I don't want to franchise. I think it's either acquiring studios that are already >> [snorts]

0:49>> If people want to retire from and buy them out and run their their businesses and then sell the whole thing eventually or ground up organic build from location location. >> [sighs] >> So, do you want what you want to hear or the truth? Both. No, truth. I want the truth. Do you want to exit? Yes. Yeah, so and when you say Okay, what size exit?

1:14At least 20 mil. Yeah. So, the fun fact for everyone here, the hardest amount of money to sell for is between 10 and 30 million. Because it's just not big enough for people who have real money and it's too big for people who don't have real money. And so, uh, like it's easier to get like a hundred million dollar deal done than it is to get a twenty-five million dollar deal. Twenty-five million dollars is like the one of the hardest deals to get done because it's somebody who usually has a way bigger checkbook and is just like really scraping down the bottom and doesn't really care cuz it barely moves the needle for them.

1:43Um, just for context. Now, that being said, if you want to sell for more, the difficulty of selling your particular business is that it's so people driven. It's so talent driven. Um, and there haven't really been to my to my standard any super successful high service based gym businesses. The closest one for a period was OrangeTheory and then they went to [ __ ] during COVID and never recovered.

2:09But like they were the closest ones. And it's just because it's the talent. It's just it's such a service heavy business and it's so reliant on the quality of the trainers, coaches, instructors, whatever you use the word you use, right? So, selling it will be difficult. You would be able to sell it to somebody who doesn't know what they're doing um, for sure, but you're not going to get a huge amount of money for it. So, some doctor who has no idea about business but think he does cuz he has money. Um, would buy it.

2:37Alex Uh, but you're probably like you might get you know, it would be 10 with a bunch of hair on it and earn you know, clauses and a bunch of crap. So, if you wanted to just do this forever, then I would say like just keep growing. That's amazing. That's fine. Um, but most people make this work in a franchise model. Typically, I think I mean you can get gyms for free. Studios for free. Like that like that's that's not It won't be hard for you to find, you know, ballet, dance, etc. Um, locations cuz so many people are in pain and don't want to run them. Like you could get them for free. I mean it's how I expand like I got them for free.

3:13Um, so the good news is the business is good. It's just what is your expansion path. So, either M&A de novo meaning organic growth you open it yourself or you go from like a franchise path. The franchise and or licensing um, is for sure more sellable than those ones. And I don't normally give this um, advice. The issue is just that I know I understand the nature of the business obviously pretty well. Um, they're very hard to sell for a lot of money. You can offload them really easy.

3:45>> [laughter] >> Cuz somebody else has a dream and thinks that they're going to make it work. It's like restaurants. Like you can sell them for nothing cuz somebody else has is a cook and people tell them the cooking's good and they're like, "You should open a restaurant. Like you love fitness. You should start it." Like that it's very easy to get people to say yes. Not for a lot of money though. So, my my honest truth is I think if you look at your current business model and say, "How could I cut down the complexity by 80%?" And then franchise it.

4:11Alex So, I'll give you I'll tell you a story. So, um, the most successful fitness franchise um, right now is Alloy. They do semi-private training. Rick Mayo is a really good friend of mine. Um, he had a four million dollar a year single facility and they had smoothie bar, merch, PT, semi-private, large group. They had the whole They had everything, right? And when he went to franchise, he looked at revenue per square foot across all the business units and saw that semi-private was by far the highest revenue per square foot. So, he had his 6,000 whatever square foot facility, he fired all of his clients except for his semi-private. It was still profitable with a 6,000, you know, square foot lease, opened up a pilot location with only the most profitable service that had three employees, one manager that does mornings and evenings and does sales and then an assistant that does morning and assistant does the does evenings and works back up. And so with the three-person model does five or six hundred thousand dollars a year at 50% margins and you can just cookie cutter that thing. And so, I think you're in sticking on the front end with stuff like I could add all these things. I think it's 100% right not to do that. And then look at your most profitable times, look at your most profitable pricing and packages and then I would look at stripping this down to like how could I get this to the fewest possible people who could run this so that I could open up Basically, somebody else could do this and that's probably the like that is the most likely path to the goal that you have. I'm not saying it's easy but it's the most likely path to where you want to go. Yeah, and what about the licensing?

5:36Same same, just different different legal structure. Okay. Yeah. All right. Just being real. Like I mean you could obviously open more locations. Seems like you're competent. Um, I say this as a compliment. But if you want the if you want the exit that you're looking for, like I can't I mean I know a lot of people in the fitness world who have five locations, 10 locations. So few like almost every one of them did never sold the whole thing. I don't know one who sold the whole thing.

6:02Every one of them piecemealed it. One to a trainer, one to a customer, one to a competitor, one like they had to break the whole thing up when they got tired. Really? Yeah. Okay. Interesting. Thanks so much. Cool. Yeah. If you are a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the 100 million dollar scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly, where they got stuck and how they got past it. And so we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. You can go to acquisitions.com/roadmap, plug in your business information and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page you can book a call with my team and we will look at your business, see if we can help and if we can, we'll invite you out to Vegas and we'll do this in person live.