Jumpstarting Your Gym Business With The JOBS Act
For those of us who are not in finance it might come as a surprise that there has recently been a watershed moment in the history of business investment. This was the 2012 Jumpstart Our Business Startups (JOBS) Act, which changed the rules for private equity and start up finance.
This of course has happened right at the time when digital marketing has changed the way that markets are created and innovation is driving the economy in new directions. Opportunities and funding options are opening up that would have never been dreamed of by previous generations of business owners.
Online platforms like Indigogo and Kickstarter have set crowdfunding loose on the world. Many small projects that otherwise might have never seen the light of day have found funding in return for profits and options on early products and services.
JOBS Means Equity And Debt Funding
Like most finance, the basic forms of crowdfunding either provide cash in return for shares or as loans with interest due. This means that, when you sign up to raise crowdfunding, you are either taking on partners who may expect to be bought out at an agreed point or creditors who look to have their investment repaid.
Prior to the JOBS Act there were limitations that prevented small-scale investment. Investors had to be high worth individuals who had more than $1 million in assets to invest, and who would form syndicates, which leveraged all that wealth. By loosening this requirement the act opened up the market to more wealth from smaller pots in even larger syndicates. This created a demand for access to investment opportunities, which makes the concept of crowdfunding much more interesting as a business itself.
System For Safe Investing
Crowdfunding platforms like Kickstarter make it easier for investors to make decisions because of the structure and due diligence requirements or they offer some way to get an insight into your financial condition, apart from checking your credit. This might be by analyzing your social media profile and history or by reaching into your accounting books if you use a service like QuickBooks Online.
The whole crowdfunding environment is changing and growing rapidly. So you need to be flexible and keep an open mind at this point. However if you do have some great idea in fitness, one that you think will be viable, the time has never been better than now to get funding for good ideas.
Another aspect of Crowdfunding is that it seems to be becoming a way to generate publicity and awareness. Because you are attempting to gain small contributions from many investors it means casting a wide net, that means wide appeals and getting the word out.
Crowdfunding Gym Business Ownership
You want to attract investors who feel like they are getting some sort of participation such as a lifetime gym membership or a product from the first batch. If you could get funding simply for offering a select few members carte blanche you only have to have an attorney set up an investment syndicate. the magic of the new options in funding are that they make complex funding structures more efficient and accessible than starting your own syndicate.
Applying for crowdfunding is relatively simple, you go through the application process and create a profile, with a sales pitch. If you already have a great business idea it should just be an extension of the business plan you’ve already done.
Crowdfunding is an alternative to bootstrapping your way up to a fully functional gym or risking your extended family’s entire savings. When you can fund the costly refit refurbishment part of setting up your gym, you can lease your equipment on favorable terms and set up a low cost gym management software solution with Gym Insight.
The only thing that remains is getting the right people on your team. Arguably that could be the most challenging task but one that takes you out of a business school administrative problem to one of real world gym management leadership and inspiration. I will leave that part to you.
Bosley, Paul. Crowd Funding May Help Health Club Owners Access Capital. February 4, 2014. http://clubindustry.com/clubs/crowd-funding-may-help-health-club-owners-access-capital (accessed March 8, 2015).
Kickstarter.com. Kickstarter Home Page. 2015. https://www.kickstarter.com/ (accessed March 8, 2015).
Wientraub, Arlene. New Crowdfunding Sites Boost Health Startups. February 15, 2013. http://www.entrepreneur.com/article/225838 (accessed March 8, 2015).