Newsletter #0019

Happy Friday!

I write this email from the 38th Floor of one of MGM’s many towers. Jessie is engrossed in a novel, (probably WW2 fiction), and I’m getting some work out of the way so we can go play (AKA eat more food).

If you didn’t notice, my tweet about renting out a small warehouse as a sport complex did much better than I expected this week. As promised, below is a breakdown of how I plan to launch this biz.

Honest to goodness, when I blasted out that tweet it was merely a baby nugget of an idea, but the comments were so enthusiastic that I really feel there’s something here. And not just something for me, but something any one of you reading this could launch fairly cheaply. Here’s how:

Please read the tweet below before continuing.

Let’s get the negativity out of the way first, because we’re toxic optimists, right? I’ll dedicate a few hundred words as to why this idea wouldn’t work and then only delusions of grandeur from here on out. Promise.

The magic keyword in all of my post’s comments is this:

Insurance

Also, it’s 2nd ugly cousin, the word LIABILITY. *insert barfing emoji

I almost addressed insurance in my post, but then purposely didn’t, knowing that a large percentage of people would comment about it, and guess what?

They did!

And the Twitter algorithm LOVES comments. So I left it out to drive engagement, and it worked. I won’t apologize.

Insurance is the safe word for people that want to launch things, but would prefer an excuse to not launch things even more.

Guys, please, COMPANIES SELL INSURANCE. For anything! For sports complexes, for tree trimming, for crabbing and for selling lemonade.

Liability might be a reason to not buy a Florida condo, but it should never be a reason to not launch a small business.

Buy insurance and work it into your pricing. Done. Move on. Google is your friend.

TOP TIER insurance in our tree trimming business is $450/month. We pay for it from the profits on our first job on the first day of the month.

Okay, we aren’t counting liability as a reason why this idea won’t work, there’s really only one:

1. Lack of demand

That’s it. And guess what? You can fix that before you ever sign a lease.

Do you listen to How I Built This? You should. A recent episode featured Paige Mycoskie, the sister of Tom’s Shoes founder and the founder of Aviator Nation.

She signs insanely expensive leases for her clothing boutiques but she does so in a very clever way. If the store launch fails, she’s able to exit her lease penalty free within the first 3-6 months.

She only works with landlords that allow this.

So yes, you can do the same, but you really don’t even need to worry about that.

You just need to start getting soft commitments, AKA customers, before you ever sign a lease.

Here’s what I would (will) do:

1. Call local competitors, posing as an interested parent and get a feel for pricing and demand. Use this intel to craft your survey questions in the next step below. Maybe you learn that all the local demand is in soccer and not baseball like you’d originally thought? Maybe you learn there’s not enough demand and you stop at this step.

2. Make a short survey with an intro detailing what your biz will be about. Make the survey questions broad enough to appeal to parents, coaches, personal trainers and students alike. The survey should ask them:

   1. What would you pay for this?

   2. How many days per week would you attend?

   3. What concerns do you have?

   4. What sports do you want to train for?

   5. Would you want 1:1 training or 1:several?

   6. What hours would you like to attend?

   7. What amenities would you like to see?

   8. It should also get their name, phone, neighborhood and email.

3. Go find all of these people:

   1. Parents of students.

   2. Middle and high school coaches.

   3. Personal trainers.

   4. Students.

4. Find those people here, in order of cheapest to most expensive:

   1. Facebook groups

   2. Nextdoor

   3. Talking to friends and neighbors

   4. Scrape them on Outscraper

   5. Direct mail

5. Talk to all of them and have them all fill out the survey. Get as many survey responses as you can.

6. Start sending a weekly email update on how your business launch is going. They will feel invested in your progress. They will root for you! And they might want to invest in you as well…

7. Start looking for a building. You’ll know from your survey how much space you need, so use that to guide you. One thing I’ve learned from researching this idea is that location doesn’t matter as much as you’d think. It obviously needs to be convenient, but don’t sweat having good road frontage or anything. This place is in a rough industrial part of Huntsville, AL and absolutely CLEANS UP and is always booked solid. As more competitors enter the market, the best locations win, but your “best” in this case means close to the parents, not on a very busy road.

8. If more rural, drive around and look at metal buildings in backyards. Many of these buildings won’t have bathrooms, but that’s okay. You can buy a luxury wedding bathroom trailer for $20-30k and they are just as good. Ask me how I know…hehe. Local zoning will need to allow for this use case, so there’s no getting around that. but many rural areas have very loose zoning restrictions.

9. If more urban then look for mixed use class B industrial. 2-10k square feet is plenty for most uses, unless you need to go heavy on indoor basketball or soccer, but that won’t be my model. Price per square foot is all across the board depending on where you are. In the DFW suburbs you are looking at around $12. $12 X 3,000 sqft divided by 12 months = $3,000 per month.

10. Build it out based on your survey responses, or where the demand is.

Here’s what mine will look like: