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The Climbing Wall Association's blog is a place for indoor climbing professionals to find useful and relevant information from industry and business experts. Stay on top of best practices, thought leadership, and trends by subscribing to Thrive - A Climbing Business Blog! www.climbingwallindustry.org/lines

 

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Fostering Connection and Inspiration at the Survive & Thrive Workshop

Posted By Laura Allured, Monday, September 14, 2020
Updated: Tuesday, September 15, 2020
Kristin Horowitz Marc Gutman Laura Allured

On September 2 and 3, 2020 the CWA hosted the Survive & Thrive Workshop, its first-ever all virtual workshop. The event was built to give gym owners and senior leadership a framework for success during COVID. 150 people from over 25 states and 3 countries, including more than 40 different gyms and 20 sponsors, joined online for two days jam-packed with learning and activities.

 

The “venue” in this case was a virtual event platform called Whova, a hub site where attendees could navigate to different sessions and also message other attendees, join virtual meetups, visit interactive sponsor pages, and contribute toward discussions on the lively Community Board. Community Board topics include, “Work from home parents,” “Diversifying climbing communities,” “gyms still closed,” “new pricing structures,” and “competition ideas.”

 

 

Day 1 kicked off with a keynote address by Sam Thiara, an expert business coach who emphasized the importance of CARE: Collaboration, Adaptability, Resilience, and Empathy. Attendees then had the option of joining Track 1 or Track 2, 90-minute deep dives into two areas: Adaptable Business Models and Leading Through Coronavirus. The track sessions were a mixed format of presentations, panels, and Q&A, with a robust virtual chat and question threads happening during presentations.

 

Day 2’s tracks focused on Financial Positioning & Self-Advocacy, with panelists from a variety of gym sizes, locations, and years in operation, and Marketing & Community Engagement. Each day also included breakout sessions into pre-assigned “pods” with names such as “Pod Belay!” “Pod Save the Queen,” and “Orange is the New Pod.” These fun pods provided a more intimate, confidential space for groups of 10-15 to open up and share challenges with one another. Problem Solving sessions also allowed pods to tackle a problem together using the interactive brainstorming tool, Miro, then a delegate from each pod presented their takeaways.

 

Financial Survival and Advocacy

 

The two days of live programming wrapped up with a closing keynote with business coach, Marc Koehler presenting on how to build a strong team culture, and a special guest speaker, Tommy Caldwell, speaking on overcoming adversity. Attendees walked away with more confidence, more connections, and new skills to tackle very immediate issues facing their gyms. One attendee wrote, “Magical occasion to connect and exchange with other people from the industry in #2020craziness. 14/10 would recommend!”

 

Additional activities include a photo contest, leaderboard to show those who were most engaged, a sponsor passport contest, sponsor and raffle and giveaways, running through the end of the month! Raffle prizes include holds, volumes, massage chairs, climbing gear, and more.

 

Purchase an On-Demand Ticket to watch this valuable content and gain access to the interactive ecosystem. Once on the platform, you’ll have access to the content and networking tools for the next 6 months! Ticket sales end September 30.

 

LEARN MORE

 

Tags:  advocacy  business development  community development  company culture  coronavirus  COVID-19  customer experience  diversity  employee engagement  financing  human resources  JEDI  marketing  member acquisition  member communications  member retention  programming  public policy  regulations  risk management  staff retention  staff training  virtual events 

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Your Current SBA Loan Options

Posted By Garnet Moore, Monday, March 30, 2020
SBA Loans

The availability of financial assistance in the US is rapidly increasing and rules around gaining access to this capital are changing to be as lenient as possible for impacted businesses. Here is what you need to know about the SBA Disaster Loans currently available to many businesses, the new SBA Express Bridge Loan Pilot Program, and the possible availability of SBA 7(a) loans in light of S. 3548 the Coronavirus Aid, Relief, and Economic Security (CARES) act.

 

SBA Disaster Loans

There are several types of assistance available in the SBA Disaster Loan Program, but most businesses in the indoor climbing industry will be focused on Economic Injury Disaster Loans (EIDL). This type of loan is only available to you if you are located in a declared disaster area, are a small business or private non-profit, and you have suffered substantial economic injury.

 

The SBA defines substantial economic injury as damage to a business that leaves it unable to meet its financial obligations, to pay its ordinary operating expenses, or to market, produce or provide a product or service ordinarily marketed, produced or provided by the business.

 

In general, the EIDL program consists of a $50 billion fund that guarantees a loan that you will have with a private bank. The maximum interest rate allowed is 3.75% but your rate will be determined based on formulas set by law.

 

Terms of the loan may vary as well, but the maximum allowed loan term is 30 years. There is a $2 million limit for any EIDL but the SBA does have the ability to waive this limit if a business is considered a major source of employment.

 

While the details of the EIDL for COVID-19 are being worked out, it is possible that there may be some rule changes. It is best to get in contact with your local SBA or SBDC office. Typically, applicants for an EIDL need to prove their ability to repay the loan, provide acceptable credit history, and have sufficient collateral for loans greater than $25,000. Some of these requirements may be altered or eased to handle the current pandemic.

 

You can find up-to-date information about the COVID-19 EIDLs directly through the SBA website, and if you are in a declared area you can apply online as well.

 

SBA Express Bridge Loan Pilot Program

On March 25, the SBA launched the Express Bridge Loan Pilot Program. Express Bridge Loans (EBLs) are designed to fast track funds for businesses that already have an existing relationship with an approved SBA Express lender.

 

Similar to the EIDL you must be in a declared disaster area and have been in business at the beginning of the declared disaster, for the COVID-19 emergency declaration the applicable date is March 13, 2020. You must also still meet the eligibility requirements of the original 7(a) loan program.

 

If you are eligible for an EBL, you can receive a loan with a maximum value of $25,000 with a maximum term of 7 years. The maximum interest rate is 6.5% over the current Prime rate and the EBL is subject to many of the same fees as a similarly sized 7(a) loan.

 

These loans typically take 3-4 weeks to process, but with the current volume that the SBA is facing there is not a clear or reliable timeline to expect.

 

Economic Injury Disaster Advance Loan

The SBA has also launched a loan advancement program. For any business experiencing a temporary loss in revenue you are eligible for a $10,000 advance. These funds will be available within 3 days of a successful application and they will not have to be repaid. You can apply here.

 

SBA 7(a) loans

The CARES act was signed into law on Friday March 27. There are several measures that help small businesses, and we will discuss those in further articles. Here we will focus on possible changes to the SBA 7(a) loan program.

 

The rule changes in the CARES act are designed to help small businesses (less than 500 employees) cover payroll from 2/15/2020-6/30/2020. There are some potential restrictions for employees who earn more than $100,000 in annual compensation, and there will be expansions of what are considered eligible employees.

 

The loans will be calculated based on the average monthly payroll of eligible employees multiplied by 2.5 up to a maximum of $10 million. Currently the maximum interest rate for these loans will be set at 4%. There is a minimum deferred repayment of 6 months, but that deferment could last up to a year for some loans.

 

The funds received through this loan program can be used for payroll, health care benefits, interest payments on mortgages, interest on debt obligations, rent, and utilities. Mortgages, rents, utilities, and other debt must have begun before 2/15/2020.

 

A portion of your loan would also be eligible for forgiveness in the amount equal to any payroll costs, mortgage payments, rent payments, and utility payments. Similar to the loan amount any forgiveness is controlled by a formula. Loan forgiveness is a calculation of the percentage of employees retained during the covered period, which is 2/15/2020-6/30/2020. The amount of forgiveness will be reduced by any employees laid off or experiencing salary deductions of greater than 25% prior to, or during, the covered period. 

 

To find out your maximum forgivable amount you can take your total eligible payroll cost multiplied by the average number of full time staff you have for 8 weeks after your loan origination and then divide that by the average number of full time employees during the covered period.

 

If you laid off staff or reduced wages between 2/15/2020 and 4/25/2020 (30 days after the CARES act passed) your amount of loan forgiveness will not be reduced if you are able to reinstate that number of staff and return wages to their previous levels.

 

Opportunities to Learn More

Join us on Thursday, April 2 for a CWA Community Call with Burl Kelton and Frances Padilla from the U.S. Small Business Administration. We will discuss who is eligible, how the EIDL can be used, and what sorts of terms and requirements are normal. Sign up now!

 

As more information becomes available, we will continue to offer further clarification.

 

Garnet Moore Head ShotAbout the Author

Garnet Moore is the Director of Operations at the Climbing Wall Association. Garnet brings more than a decade of experience in the climbing industry, including his time as the COO at Brewer's Ledge.

 

Tags:  coronavirus  COVID-19  financing  management 

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My Gym Is Closed, Now What?

Posted By Garnet Moore, Friday, March 20, 2020
Closed Now What

Whether you closed your gym voluntarily, or you are in an area where your gym was forced to close, you are dealing with some challenging questions at the moment. We want to remind you that you do have options and that the CWA is here to help in any way possible.

 

If you have not done so already, reach out to your insurance provider, your landlord, and any lenders to see what deferments are available. All of these providers know that this is not your fault and that indoor climbing, in general, is a viable business model. They will prefer to help you rather than see you go out of business. In some cases, they may be eligible in the future for aid in relation to any assistance they provide, and as the situation develops rapidly, they may even have restrictions on when and how they collect payments.

 

Many banks are offering 90-day deferments for loans. You may even be able to accumulate your principal and interest payments for the next 6 months and have them added to your final loan payment. The best course of action is to start the conversation as soon as possible. Similarly, your landlord may be willing, or mandated to, defer your rent payments and to wait to collect any rent owed until after the pandemic is over.

 

Likewise, insurance policies could be frozen, claims could be filed, and there may be some potential to renegotiate liability premiums to account for changes in your forecasted income. The CWA’s partner, Monument Sports Group, is working to negotiate with the insurance carriers on behalf of the entire industry. Mid-term policy adjustments, payment deferments, and extending policy terms are some possibilities to ease some of the pressure you are feeling. Monument has also contacted carriers outside of the CWA program to encourage that they explore similar options.

 

Possibly the most difficult decisions you will be making are around your employees. Assistance is coming rapidly and you should pay attention to your local department of labor for any changes they have made which could allow you to lay off or reduce the hours of employees knowing that they are eligible for unemployment benefits to make up for the lost wages.

 

On March 18th the Families First Coronavirus Response Act was passed and its provisions will help support those efforts. This act also will affect what leave you have to provide your employees and how you must pay them during extended leave. For a more thorough review, read our analysis of the Families First Coronavirus Response Act.

 

An often-overlooked area of savings is the benefits that you offer your employees. You can explore the option to suspend or cancel any non-essential benefits such as dental or vision insurance and retirement benefits. Discuss these options with your lawyer to make sure that you are not violating any employment contracts.

 

While the full range of assistance programs are being determined, the most immediate program you may have access to is the SBA Disaster Loan Program. If you qualify, you are eligible for a loan up to $2 million at an interest rate of 3.75% with a term of 30 years. To apply go directly to their website and begin the application.

 

The CWA will be here for you throughout this crisis and after. The long-term future of the climbing industry still looks very bright and it is vital to remember that your customers can’t wait to get back into the gym.

 

Garnet Moore Head ShotAbout the Author

Garnet Moore is the Director of Operations at the Climbing Wall Association. Garnet brings more than a decade of experience in the climbing industry, including his time as the COO at Brewer's Ledge.

 

Tags:  coronavirus  COVID-19  financing  human resources  leadership  management  operations  risk management 

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Top 5 Takeaways from Fitness Business Podcast About Investment

Posted By Laura Allured, Friday, September 13, 2019
Fitness Investment

A recent recommendation from Chris Stevenson led me to start listening to the Fitness Business Podcast. In addition to being a regular speaker at the CWA Summit and CWA Meetings, Chris is one of my favorite fitness industry experts, and his recommendation did not let me down.

 

Hosted by Chantal Broderick, the podcast is a gold mine of resources for fitness business owners and managers. The first episode I listened to was #249 How to Plan Your Business for Investment with Jon Canarick, Managing Director, North Castle Partners.

 

Specializing in the health, active, and sustainable living markets, North Castle Partners is a small cap private equity firm with current and former investments comprising well-known brands such as Equinox, Curves, Barry’s Bootcamp, and, in our industry, Brooklyn Boulders.

 

Coincidentally, the discussion touched on climbing gyms much more than I expected, including why Jon believes climbing has such a bright future. So, without further ado, here are my top five takeaways from this episode!

 

Takeaway #1 – The Investment Decision Starts with Management

When determining whether to invest in a business, Jon says it all starts with management. The connection between the entrepreneur and investor is the most important indicator of future success, including a shared vision and mutual trust.

 

It’s important to determine up front that both the entrepreneur and investor are excited about the business plan and the direction of the company. If there are any doubts, it may be an indicator that it’s not the right partnership.

 

Further, an investment is a partnership between the CEO/management team and the VC firm. That partnership must be built on trust, so both sides should participate in frequent, open, and honest communication.

 

Consider the type of relationship you might want with an investor before starting the process and think about the effort you’re willing to put into that line of communication on an ongoing basis.

 

Takeaway #2 – They’re Investing in Your Business Model, Not a Concept

This may not be the case for all VC firms, but North Castle invests in proven business models, not concepts. When considering investment opportunities, they look for proof points that demonstrate viability.

 

These include things like:

  • Cost and appeal of the product
  • Size of the market opportunity
  • Number of locations
  • Success in multiple geographies or types of markets
  • Being on-trend, but not a fad

Ultimately, they want to see that your business model is scalable and replicable, and that you’ve been able to make it successful on your own first.

 

Takeaway #3 – Owner Dependence Is a Red Flag for Potential Investors

One red flag that Jon watches out for is over-dependence on the owner, which is a potential threat to the scalability of the business. After all, the owner is only one person. It’s not sustainable for them to be deeply involved in all business functions all the time.

 

If the success of any given department or function relies too heavily on the owner, it could mean disaster when they step back to focus more on business expansion and development. For most potential investors, you’ll need to prove your business isn’t overly dependent on you.

 

If you want to test whether this is an issue for you, take an extended vacation. If your business isn’t stable enough to weather your absence, it’s owner dependent. For more information, check out Prometis Partners’ blog post, Owner Dependence: Is Your Business Overly Dependent on You?

 

Takeaway #4 – Climbing Is Not a Fad

Jon is unequivocal in his belief that climbing is here to stay, based on conversations with people inside and outside the industry, as well as his own experience.

 

When it comes to fitness fads, the bottom line is how effective the workout is. Fun workouts that don’t deliver results often turn out to be fads. Climbing is an effective way to strength train, and there’s strong science behind climbing leading to great fitness.

 

Beyond the fitness benefits, climbing is also a uniquely social activity. In the fitness industry overall, it’s rare to see folks interacting with each other during workouts – climbing turns that expectation on its head. Plus, climbing gyms are distinctive in the fitness industry for creating inviting social spaces and tight-knit communities.

 

Takeaway #5 – Venture Capital Is Not for Everyone

It's worth pointing out, venture capital has its pros and cons. It may be attractive to some small business owners, but it’s not right for everyone. According to Jon, “there’s nothing wrong with having a great small business that is successfully generating profits for that individual.”

 

According to an Inc. article about VC in the tech industry, there are four reasons that raising venture capital might be a bad move in some cases.

  1. Selling yourself to VCs can be a distraction from more important things, like attracting and retaining customers.
  2. The data shows average returns in the low single digits, suggesting that VC’s value-add may not be what you expect.
  3. You may have to give away ownership in exchange for capital, diminishing your decision-making abilities and independence.
  4. At least in the tech industry, the odds of being able to pay back the capital that was invested are low.

Listen to the Full Interview

There you have it, my top takeaways from the Fitness Business interview with Jon Canarick. For more from Jon, including tips for preparing to sell a business and his view on the future of the fitness industry, head over to the Fitness Business website now to listen to the full episode.

 

Laura Allured Head ShotAbout the Author

Laura Allured is the Marketing & Communications Manager at the Climbing Wall Association. Laura is the editor of the CWA's blog, Thrive, and also manages the CWA’s Industry Research Program, including the annual indoor climbing industry study. Originally from the Chicagoland area, she got her start climbing in 2012 at Vertical Endeavors and has been hooked ever since.

 

Tags:  business development  financing  investment  leadership  management 

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