Local fitness facility ultimately decides to close.
Challenge:
Starting a new business can be a daunting task, especially if partners are needed to round out the financing required to bring the new business to life. While many partnerships may plan for success, very few are prepared for a business model that may not be working out as anticipated. One local fitness facility with three partners continued to perpetuate an unprofitable business for several years before taking concrete steps to reverse course. Unfortunately, by the time they agreed to make changes and possibly sell the business, their working relationships with each other had become hopelessly strained. They initially brought us in to market the property for sale.
Success:
The partners were unwilling to put additional capital into the business and so efforts to improve cash flow were substantially limited. In the meanwhile, they asked us to serve as interim general management for the club until an exit strategy was developed and executed. We were able to maintain membership levels and keep the business operational for several months until the lease was set to expire. Selling the business at any type of premium became impossible given the environment and operational losses; however, we were able to support the sale of the assets of the club and the final release of the location.