The Acquisition Playbook
Having an acquisition playbook to reference can help your health club determine the viability and value of a potential acquisition.
When seeking to grow, you can either open a brand-new facility or acquire an existing one. While acquisition is a great business move, it also requires a lot of work.
Clayton Aynesworth, the owner and president of Castle Hill Fitness with two locations in Texas, wasn’t looking to expand when he was approached by another local gym owner who wanted to retire. To begin, Aynesworth and the rest of the Castle Hill Fitness team assessed the local market and the client base and found compatibility with their downtown location. They deemed it was a good enough fit to proceed.
That’s when the real work started. “For an owner acquiring a location, it will be a humbling experience,” said Aynesworth.
In order to avoid major problems, you should first determine if the club you are considering to acquire will be a good fit for your company. Shawn Stewart, the owner and CEO of CSS Fitness Holdings, LLC, uses an acquisition strategy.
“For me, it was important to put together an acquisition strategy I could base all decisions on,” said Stewart. “After visiting many clubs and speaking with top industry leaders and mentors, I put together a 10-point checklist I use to determine the viability and value of an acquisition. I stay very disciplined to these items; if it checks nine of the 10 boxes, I pass on it. It must check all 10 boxes for me to proceed.”
Overall, Stewart believes the right club can be a smart investment if you have a great brand, solid systems and, most importantly, a great team is in place.
For Aynesworth, he said you should ask yourself, “Will the numbers add up after three months, after three years and after five years?”
“State your goals clearly year by year,” explained Aynesworth. “Edit your expectations according to actualities quarter by quarter. Be prepared for the unexpected month to month. The phrase, ‘hindsight is 20/20’ has never been more real than during this year.”
When acquiring a club, it is essential to make the transition as seamless as possible. A great way to do this is by planning and having team members who are flexible and committed to your club’s mission.
Stewart uses each acquisition as an opportunity to better their acquisition playbook — something he started several years ago when he was part of his first acquisition.
“Each time, I challenge our team to add any item that comes up into the playbook,” said Stewart. “Having an acquisition debriefing system pre-opening, post-opening and at the 90-day mark is important to engage and lead your team in discussing. Having a great team in place that will execute the playbook is the most important aspect of going through this venture. It was important for me to have an acquisition and operations team in place before considering the next club.”
While Aynesworth doesn’t have an acquisition playbook, he agrees engaging your team members is a great way to ease the transition.
“Change is hard,” said Aynesworth. “Empower your employees. Make sure they understand their voices are being listened to and considered.”
Whether you are looking to acquire your first club, or you’ve been doing it for years, there’s a lot to consider and keep in mind.
“Be ready for an organizational learning experience,” said Aynesworth. “Do your due diligence. You will make mistakes; your team will help you fix them. Strive for competence in communication. You are marrying two cultures. Make space for the human experience. This transition will be a marathon, not a wind sprint.”