Should I take a loan from the bank to start my own facility?Apr 19, 2021
Today I got a message from a Basketball trainer who is based in Milwaukee.
He asked me:
"Hey Ben, I'm just starting my business and I'm considering taking out a loan from a bank to purchase a gym. I'm only just starting out so I don't have any clients yet. I'm also considering partnering with someone to start my business. Can you please give me some advice?"
I want to give you a quick disclaimer here and my response to this email is very conservative as I don't like coaches either risking or gambling with their money. If you're in a similar position as this basketball coach then I want you to take a logical approach.
I've seen so many people who've reached out to me with business loan questions or with questions about partnering with someone else. Many of these coaches haven't had good results in the past and this is why they then reach out to me for more help about what they should do next.
Here's one thing I think that has really helped when I think about coaches who are considering taking a loan out to start their sports coaching business. First, you should not try to get money or be in debt to anybody. If I was you, I wouldn't put yourself in a position where right before you start your business you're automatically owing people money.
The reason why you want to avoid this is because you haven't yet created a proven concept to yourself that you can actually get clients and there's nothing worse than starting a business without a proven concept. Which means that before anyone has even paid you yet you have this huge pressure on your shoulders to pay back a loan or if you have a partner then it may be interest on that loan you have to pay back.
I'm a big believer that at the very beginning of your business you should do everything solo and go and make money without asking either the bank or someone for money. You have to prove to yourself that you can get clients.
If you're a current business owner and you want to buy a gym then for sure it would be smart to get a business loan because you already have money that is coming in from your current clients and I have zero problem with coaches who do that. However, if you do not have clients yet then you should not even think about getting a loan or partner. Instead, most of your attention should be focused on building credibility in the marketplace.
The proper way to start your business is to understand what is the problem you're solving for parents and athletes and go and solve that problem. When you solve that problem you will get paid in exchange for solving their problem and when you start getting good at that then you will start to generate income without the need of having to take out a loan.
I would encourage all coaches to focus on getting clients first before jumping into getting a loan because once you have a steady amount of clients you have proved that your method works and you don't have to put your business or worse your family at risk at the beginning.
I've worked with a lot of coaches who have facilities and are really successful at what they do. But the reason why they are successful is because first they focused on getting clients by themselves so they can prove that their business works and then they focused on getting loans and partnerships to expand further.
I hope this helps,
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