Fitness Business Systems: To Buy or to Build?

The build-or-buy decision for business systems or software can feel overwhelming. Let’s look at the big picture.

At some point every fitness entrepreneur will have to decide whether to build from scratch or buy a pre-packaged solution.

At some point every fitness entrepreneur will have to decide whether to build from scratch or buy a pre-packaged solution.

Usually the decision is easy. Few trainers have the background or resources to buildclient relationship management softwarelike Mindbody Online or Zen Planner. And unless you have a lot of experience as a welder, it's much easier to buy a cage and squat stands fromRogueor Again Faster.

But software and equipment are just the accoutrements of a fitness business. A gym, dojo, or any other type of fitness venture needs a business model with defined systems for attracting the right client, a pipeline for managing sales, and tools for servicing clients and retaining business. Without a fully baked business model you will be swimming with the sharks.

Not too long ago if you wanted to get into the fitness game you had no choice but to "roll your own" solution because pre-packaged business systems didn't exist. Nowadays, there are quite a few to choose from, including Results Fitness Universityfrom Alwyn Cosgrove, Net Profit Explosion from Sean Greeley, and John Burch's The Biz, to name a few.

All of these players offer the same core value proposition to the same audience, i.e. a pre-baked system for turning your passion for fitness into money. Sounds great, right? But with so many options, the build-or-buy decision can feel overwhelming. Let's take two steps back and look at the big picture.

The Case for "Buy"

Know Thyself

The world is full of great trainers and great business people, but rarely do the two populations overlap. The skill sets are entirely different and generally not complementary. This can cause massive dissonance and frustration.

Every hour that you spend learning how to run your business is an hour that you take away from clients. Unless you are deeply curious about business, you can avoid a lot of stress by purchasing a business plan that you can execute like a paint-by-numbers set. Minimizing stress is important because if you are frustrated with your business your clients will know it and eventually your frustration will repel them.

Training Day

Eventually your business will grow and you will need help. Having help is good. Having helpful help is awesome. Unfortunately, your team will only be helpful if they have training.

Training new people is difficultif your business is ad-hoc and reactive. Doyou have defined processes? Do you have manuals? Checklists? Phone scripts? Org charts? Packaged business systems give you all this and more. When you are making a build-or-buy decision take care to factor in the value of consistent training materials for your team.

Can You Afford R&D?

Research and development is when your pour a bunch of money into speculative business processes or products with the hope that your great idea will withstand the withering scrutiny of the market. But wait! Isn't that just gambling?

Yes, and I'm going to go out on a limb and suggest that you cannot afford to gamble on a dicey proposition like "build it and they will come." Rather than blow through your savings trying to develop a business model through trial and error, why not just buy a proven system that has already survived market pressure.

The Case for "Build"

It Pays to Be Different

One of the biggest shortcomings of packaged business system is that they lower your competitive IQ. When you are working within a system, you tend to prioritize compliance rather than creativity. That's not a problem if you are the only game in town, but what happens when the gym down the block buys the same playbook?

The essence of competition is differentiation, and if you and your competition are runningessentiallythe same business, customers won't have a reason to choose you. If you are in an extremely competitive market, you might be better off building a differentiated solution.

Beware the Up-Sell

Many business systems consist of multiple product tiers, requiring a progressively greater investment the further up you go. This model works for entrepreneurs because it makes the entry-level system accessible with minimal investment and commitment.

On the other hand, if you want the "good stuff," you might have to make a larger investment than you had planned. For many entrepreneurs starting off on a shoestring budget, a premium business product might not be affordable. If this is you, consider finding a business mentor who is willing to share knowledge with you out of the goodness of her heart.

When All You Have Is A Hammer…

The U.S. is made up of red states, blue states, purple states, and everything in between. New York and Los Angeles have vast cultural differences and neither shares much in common with the Midwest. Unfortunately, packaged business systems are usually rationalized within a single market, which means they frequently do not translate well in other markets. The people who develop business systems are smart, but nobody knows your market like you do. If you can't achieve product/market fit with a package solution, then you are better off building your own.

So What Should I Do?

I recommend that you make the build-buy decision based on two axes. First, what is your appetite for risk? Second, how innovative is your product?

If you have high appetite for risk and an innovative product, then you should build. Packaged systems are inherently non-innovative and you will find it difficult to force-fit a groundbreaking idea into a packaged system. Zumbais a great example of a highly disruptive product that could not have succeeded with a one-size-fits-all business model.

If your appetite for risk is low, and your product isn't extremely disruptive or innovative, then you should probably buy. You will be able to focus on execution, rather than innovation and it will be easy to find a system that fits. Yoga and CrossFit are two examples that come to mind.

Whatever you decide, the most important thing is to balance your passion for fitness with a healthy business plan. Build something or buy something, but never trivialize your business.

Photo 1 courtesy ofCrossFit Impulse.

Photo 2 courtesy ofShutterstock.