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WHAT IS NEEDED TO OPEN THE GYM 1500 members
- 750 Members paying a charter membership fee of $100 convertible to stock
- 750 Members paying a charter membership fee of $50 convertible to stock
- 750 Members paying a first year monthly basic membership fee of $25 via E.F.T.
- 750 Members paying a first year monthly full membership fee of $50 via E.F.T.
ADDITIONAL INFORMATION
- The gym will employ 5 full time employees and 4 part time employees, manager, front desk and maintenance.
- Hours of operation will be the same as before.
- Personal training and classes that were previously offered will be continued, subject to interest and enrollment.
- All money collected before the gym open will be put in an escrow account with an attorney. If the desired level of suppot is not reached, all money will be returned. EFT will only start upon the same conditions.
- Much still needs to be done, hiring an attorney, recruiting members, finalizing lease arrangments, finalizing existing equipmentpurchases, etc.
- The gym will be stockholder owned.
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Notes from 11/17/10 Meeting (6-7PM) at the Wesley United Methodist Church/Hadley
taken by Elizabeth Gilbert
While there were fewer folks attending this meeting than the first meeting at Pasta E Basta, it was an informative and fruitful event. There is considerable optimism to re-open the gym by early winter.
Lyle Seger: Pastor of the Wesley Church welcomed the group. He told the group that he was a member of the Leading Edge and that he is very interested in being a part of the re-opening of the gym. He introduced Irv Rhodes to the audience.
Irv Rhodes: Irv started off by letting the group know that he has been as involved in this process as he has been because the gym had been a very important part of his life; he had built numerous friendships during his 5:30AM daily workouts so when the gym closed he felt homeless. He explained that as an entrepreneur he had started a couple of businesses and therefore had some background in business start ups. He fully understood that attention to detail is critical.
Irv explained that he has met with and had numerous conversations with Peter and Meghan (past owners of the Leading Edge) as well as past owner Attorney Jo-Ann (past owner). In addition Irv has had conversations with the current landlord of the building that the gym is housed in.
Irv noted that over a 2 ½ year time period the highest income the gym had was $88,000.00 per month and the lowest income was $56,000.00 per month (at which time the gym closed).
The failure of the gym was NOT due to the current economy; rather it was due to failure in the management.
The gym lost 800 members last summer after the change in fee structure was introduced.
Irv reiterated a number of times that much will need to be done to re-open: i.e., hiring an attorney and an accountant, recruiting members, finalizing lease agreements, finalizing existing equipment purchases, working with local banks, etc.
To re-open the gym we will need 1,500 members within the first two months. The gym will be a stock holder owned company. 750 members will pay a charter membership fee of $100.00 and 750 members will pay a charter membership of $50.00. There is a secondary option of seeking other investors if we do not reach the 1500 members needed. Preferred stock will go to the investors.
Monthly fees will be either $25.00 per month for a basic membership or $50.00 for full membership which will include all classes including yoga. These fees are $5.00 more than originally planned to create more viability for financial success. The fees may fall to the $20.00 and $45.00 level the 2nd year. There is no anticipation that there will be any other fees in addition to those noted above.
All money collected before the gym opens will be put in an escrow account with an attorney. If the desired level of support is not reached all money will be returned; EFT will only start upon the same conditions.
Gym hours of operation will be the same as they were. Child care will be offered for an additional fee. Personal trainers and classes will be offered subject to interest and enrollment; the personal trainer salary structure is yet to be determined, there are a number of different ways to address this.
The Les Mils fees will be funded so those classes will continue.
The new gym will employ five (5) full time employees and four (4) part time employees; a manager, front desk staff and maintenance. Health insurance will be part of the staff benefit package. Old staff may apply for these openings. The new manager will make hiring decisions.
An energy audit of the gym will be completed before re-opening. There were large swings in utility costs at the gym by as much as $5,000.00 per month. Negotiations will be worked out with the landlord on this as well how to rectify the heating and cooling issues.
The financial numbers that Irv has put together are all in spread sheet form and are confidential until such time that they will become available to investors; one individual investor is not needed at this time.
There were 1350 members when the gym closed; as stated above re-opening will require 1500 members to maintain an appropriate cash flow. The break even number for the gym to be financially viable is 1200. There is a very small margin for error to keep things running.
No back taxes will be required to open the gym under a new name.
The same equipment will be used if the gym re-opens. It would be too costly to replace it.
A maintenance contract for the equipment will be in place when the new gym opens.
There will be a formal organizational structure for the new gym as well as a board of directors. An accountant will be hired.
The new gym will initially be a “for-profit business” with an opportunity at some point in the future to become a cooperative.
It is anticipated that the gym could be ready with a green light to open by mid January 2011, but the membership numbers must be adequate.
The new budget for the gym will include marketing and advertising costs. Marketing will include what is different about this gym from other gyms in the area. The Daily Hampshire Gazette will be used for newspaper ads.
There were a number of people who volunteered to be a corps group whose main responsibility it will be to recruit the 1500 members needed to open the gym.
A name suggested to the new gym was “Our Gym”. Other names may be offered. The name and incorporation of the gym should happen very soon.
Irv sees his role as unknown at this point. He is not interested in being chair of the board. His priority at this time is to get the gym open.
I think this is SO exciting! I'm going to sign up!
ReplyDeleteCan you please put up a description of the Basic and Full membership levels? I'm not certain everyone knows the difference between the two.
ReplyDeleteFrom what I heard at the meeting on Wednesday night, the only difference in the membership would be that a full membership would include all classes and a basic membership wouldn't include any classes.
ReplyDeleteGreat idea, it's done!
ReplyDeleteThanks,
Sue
Well Done, Irv and Co.!! A name that reflects the sentiment of "Our Gym" would be appealing, as well as a promotional campaign that highlights the difference between this and other gyms. I'm in.!
ReplyDeleteIt would be important to know if child care would be available and how much. With the old gym we paid $30 for membership (with the new structure and $20 for child care, a total of $50 a month) how much more would it be for child care. Right now the $50 fee plus a child care fee would be steep, especially for a single parent.
ReplyDelete