Have you ever experienced one of those moments where someone says or writes something and you think to yourself, I wish I said that?
Kip Tindell (Co-Founder of the Container Store) perfectly summarized my hesitance to rapidly scale our business to multiple locations in just four sentences:
By my count, we’ve received roughly 50 offers to place CSP satellite facilities in locations situated all over the United States. More often than not, the owners of a hitting and/or pitching instruction business realized that they had a few thousand square feet of unused space, and our brand came to mind as a potential tenant or partner. We’ve been pitched everything from discounted rent, to entirely free-of-charge scenarios over the years.
I’m not going to lie; the idea of adding gyms is enticing. Thankfully, we’ve had the discipline to say no.
We finally decided to pull the trigger on a second location this past year. We opened the doors for business at CSP-Florida in November of 2014. We had been in business for 7 years, 3 months, and 17 days when that time arrived. It took me just a shade longer than that to begin publishing fitness business material because I felt it was important to accrue enough career capital to justify declaring myself “an expert” of sorts. Similarly, during the early years of our business, we felt that Cressey Sports Performance needed to accrue some career capital before the time was right for expansion.
Here’s a look at three reasons why we passed on so many opportunities before deciding to take the jump:
1. We are fiercely protective of our brand
With each passing day, month and year, I become a little bit more attached to our brand. We’ve given thousands of hours of our lives to the development of this business. The idea of handing “the keys” over to anyone else is tough to stomach. With this in mind, it will be a long time before you see franchised CSP locations popping up in your area.
I often say that the CSP brand is not just a logo or a training program. Instead, it is the combination of the personalities and skill-sets that make up our unique team. When people are your true differentiator, expansion becomes a slow and deliberate process. With Eric overseeing the day-to-day operation of our Florida location, and me being the eyes and ears of operations here in Massachusetts, we are able to ensure that the core values and mission of the CSP brand as a whole continue to stay on track.
A single dysfunctional or inefficient CSP location would be enough to severely damage a brand we’ve worked so hard to create.
2. Human resources are our ultimate bottleneck
To effectively scale your business, you need to be able to duplicate the product or service. In our case, the product is individualized program design based on the findings of a thorough initial assessment. The skillset and intuition needed to effectively screen our athletes and prepare appropriate programming isn’t acquired by reading a manual or being walked through an orientation. It comes from hundreds, if not thousands of ours spent coaching within the walls of CSP.
Our business here in Massachusetts has grown at a pace that has required us to hire all of the interns who have demonstrated the capacity to potentially implement our model elsewhere. It takes more than an exceptional strength coach to operate a profitable strength & conditioning facility. When the time comes for us to open a third location, I am certain the opportunity will be given to an existing member of our team with several years of experience functioning within our business model.
3. No business should expand unless they’re operating at or close to capacity
You know how they say that it’s more expensive to acquire new customers than it is to retain existing ones? Well I think it is much easier to generate revenue by increasing efficiencies of an existing business than it is to create a new one.
They key to arriving “at capacity” is establishing systems that could be easily implemented at another location sometime down the road. If you advertise semi-private training services with a 5:1 client-to-coach ratio, and you employ 5 coaches, your systems are the tool that will help you put 25 athletes in your gym during a given training slot in your schedule. Why would you bother allocating your time, energy and focus toward opening a second location if you’ve got 15 athletes scheduled at a time when you could handle 25?
Before you pull the trigger on that next location…
Ask yourself what you really love about running your business. I recently had a conversation with an established (and profitable) gym owner who owns and operates three different locations in his respective state. His “flagship location” is a beautifully equipped and designed 10,000+ square foot space that most aspiring gym owners can only dream about operating. When I asked him what he’d do differently if he could snap his fingers and turn it all into a specific scenario, he told me this:
“I’d own a single 5,000 square foot space with four awesome coaches. I’d focus on filling every single slot in our schedule. Then I’d coach the shit out of each of those training sessions and get back to doing what I love…doing what I do best.”
Do you really need a dozen gyms with your logo on the front door? I don't.