How to open a running club?
Want to start a running club but don't know where to begin? Then you've come to the right place!
Our comprehensive guide covers everything related to opening a running club - from choosing the right concept to setting out your marketing plan and financing your business.
You'll also learn how to assess the profitability of your business idea and decide whether or not it can be viable from a financial perspective.
Ready to kickstart your entrepreneurial journey? Let's begin!
Learn how a running club works
Before you can start a running club, you need to have a solid understanding of how the business works and what are its main revenue streams.
This will give you a glimpse into the profitability potential of your venture, whilst allowing you to decide whether or not it is a good fit for your situation (current skill set, savings and capital available to start the business, and family responsibilities).
It may be that creating a running club is an excellent idea, but just not the right one for you.
Before starting their own company, successful entrepreneurs typically:
- Consult with and take advice from experienced running club owners
- Acquire hands-on experience by working in an operational running club
- Take relevant training courses
Let's explore each option in a bit more detail.
Consulting with and taking advice from experienced running club owners
Having "seen it all", established business owners can offer valuable insights and hands-on advice drawn from their own experiences.
This is because, through both successes and failures, they've gained a more informed and practical understanding of what it takes to build and sustain a successful running club over the long term.
Acquiring hands-on experience by working in an operational running club
If you want to open a running club, having industry-specific experience is imperative because it equips you with the knowledge, network, and acumen necessary to navigate challenges and make informed decisions critical to the success of your future business.
You'll also be able to judge whether or not this business idea is suitable for you or if there might be conflicts of interest with your personal life (for example, long working hours could be incompatible with raising young children).
This work experience will also help you to make contacts in the industry and familiarise yourself with customers and their expectations, which will prove invaluable when you set up your running club.
Take relevant training courses
Taking a training course is another way of familiarising yourself with the business model of your future activity before you decide to make the jump.
You may choose to complete a training course to obtain a certificate or degree, or just take online courses to acquire practical skills.
Before going any further in setting up your venture
Before you go any further with your plans to open a running club, make sure you have a clear vision of what it will take in terms of:
- What skills are needed to run the business successfully (do you have some or all of these skills?)
- What a standard working week looks like (does it suit your personal commitments?)
- What sales potential and long-term growth prospects the running club has (compare this with your level of ambition)
- What options you'll have once you decide to retire (or move on and inevitably sell the company)
This analysis of the business model and the constraints of the business should help you to check that your idea of launching a running club fits your entrepreneurial profile.
If there is a match, it will then be time to look at assembling the founding team of your business.
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Assemble your running club's founding team
The next step to start your running club is to think about the ideal founding team, or to go in alone (which is always an option).
Setting up a business with several partners is a way of reducing the (high) risk of launching a running club since it allows the financial risk of the project to be shared between the co-founders.
This also allows the company to benefit from a greater diversity of profiles in the management team and to spread the burden of decision-making over several shoulders.
But, running a business with multiple co-founders brings its own challenges. Disagreements between co-founders are quite common, and these can pose risks to the business. That's why it's crucial to consider all aspects before starting your business.
To make an informed decision, we suggest asking yourself these questions:
- How many co-founders would increase the project's chances of success?
- Do you and your potential partners share the same aspirations for the project?
- What is your plan B in case of failure?
Let's examine each of these questions in detail.
How many co-founders would increase the project's chances of success?
The answer to this question will depend on a number of factors, including:
- Your savings compared with the amount of initial capital needed to launch the running club
- The skills you have compared with those needed to make a success of such a project
- How you want key decisions to be taken in the business (an odd number of partners or a majority partner is generally recommended to avoid deadlock)
Put simply, your partners contribute money and/or skills, and increasing the number of partners is often a good idea when one of these resources is in short supply.
Do you and your potential partners share the same aspirations for the project?
One of the key questions when selecting your potential partners will be their expectations. Do you want to create a small or large business? What are your ambitions for the next 10 or 15 years?
It's better to agree from the outset on what you want to create to avoid disagreements, and to check that you stay on the same wavelength as the project progresses to avoid frustration.
What is your plan B in case of failure?
Of course, we wish you every success, but it's wise to have a plan B when setting up a business.
How you handle the possibility of things not working out can depend a lot on the kind of relationship you have with your co-founders (like being a close friend, spouse, former colleague, etc.) and each person's individual situation.
Take, for instance, launching a business with your spouse. It may seem like a great plan, but if the business doesn't succeed, you could find yourself losing the entire household income at once, and that could be quite a nerve-wracking situation.
Similarly, starting a business partnership with a friend has its challenges. If the business doesn't work out or if tough decisions need to be made, it could strain the friendship.
It's essential to carefully evaluate your options before starting up to ensure you're well-prepared for any potential outcomes.
Conducting market research for a running club
The next step in launching a running club is to carry out market research. Let's take a look at what this involves.
The objectives of market research
The objective here is very simple: to assess the level of demand for your business and whether there is an opportunity for it to thrive in your chosen location.
The first step will be to check that the market is not saturated with competing offers and that there is room for a new player: your running club.
Your market analysis will also help you identify a concept and market positioning that has every chance of being successful in your target market, thereby helping increase your business's chances of success.
Carrying out market research for your running club will also enable you to better understand the expectations of your future customers and the most effective ways to communicate with them in your marketing plan.
Analyse key trends in the industry
Your market research should start with an industry analysis in order to gain a good understanding of the main players and current trends in your sector.
Once you've delved into the current state of the market, it will be time to assess what proportion of your target market can be seized by your running club. To do this, you will need to consider both the demand and supply side of the market.
Assess the demand
After checking out the industry, let's shift our focus to figuring out what your potential customers want and how they like to buy.
A classic mistake made by first-time entrepreneurs is to assess demand on the global or national market instead of concentrating on their target market. Only the market share that can be captured by your company in the short term matters.
Your demand analysis should seek to find answers to the following questions:
- Who are your target customers?
- How many are there?
- What are their expectations?
- What are their buying habits?
- How much budget do they have?
- What are the different customer segments and their characteristics?
- What are the main distribution channels and means of communication for reaching each segment?
The aim of the demand analysis is to identify the customer segments that could be targeted by your running club and what products and services you need to offer to meet their expectations.
Analyse the supply side
You will also have to familiarize yourself with the competing running clubs on the market targeted by your future business.
Amongst other things, you’ll need to ask yourself:
- Who are the main competitors?
- How many competitors are already present?
- Where are they located?
- How many people do they employ?
- What is their turnover?
- How do they set their prices?
- Are they small independent businesses or national players?
- Do they seem to be in difficulty or are they flourishing?
- What is their market positioning?
- What types of products and services do they offer?
- What do customers seem to like about them?
The aim of the competitive analysis is to identify who your competitors will be and to gather information that will help you find a differentiating commercial positioning (more on that later in this guide).
Regulations
Conducting market research is also an opportunity to look at the regulations and conditions required to do business.
You should ask yourself the following questions:
- Do you need to have a specific degree to open a running club?
- Do you need specific licences or permits?
- What are the main regulations applicable to your future business?
Given that your project is at an early stage, your focus should be to ensure that there are no roadblocks from a regulatory standpoint before you deep dive into the planning process.
Once your project is more advanced, you will have the opportunity to talk about regulation more in-depth with your lawyer.
Concluding your market research
By the time your market research is completed, you should have either:
- Pinpointed an untapped business opportunity,
- Or arrived at the realisation that the market is saturated, prompting the search for alternative business ideas or models.
If the conclusion is that there is an opportunity in the market to cater to one or more customer segments currently underserved by competitors, that's great!
Conversely, if you come to the conclusion that the market is already saturated, don’t panic! The good news is that you won’t spend several years working hard on a project that has little chance of success. There is no shortage of business ideas either - at The Business Plan Shop, we have identified more than 1,300 potential business ideas!
Need a convincing business plan?
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Choose the right concept and position your running club on the market
The next step to start a running club is to choose the company's market positioning.
Market positioning refers to the place your product and service offering occupies in customers' minds and how it differs from how competitors are perceived. Being perceived as a high-end solution, for example.
To do this, you need to take the following considerations into account:
- How can you make your business stand out from your competitors?
- Is it better to start a new running club or acquire one that is already up and running?
- How to make sure your concept meets customer needs?
Let's look at each of these in a little more detail.
How can you make your business stand out from your competitors?
When you decide to start your own running club, you're facing an upward challenge because your competitors are already ahead. They have a good reputation, loyal customers, and a strong team, while you're just getting started.
Opening a running club offering exactly the same thing as your competitors is risky and potentially doomed to fail: why would customers take the risk of choosing a newcomer rather than a company with a proven track record?
This is why it is advisable to avoid direct confrontation by adopting a differentiated market positioning wherever possible: in other words, by offering something different or complementary to what is available on the market.
To find a market positioning that has every chance of success, you need to ask yourself the following questions:
- Can you negate direct competition by serving a customer profile that is currently poorly addressed by your competitors?
- Can your business provide something different or complementary to what is already available on the market?
- Why will customers choose your running club over the competition?
- How will your competitors react to your entry into their market?
- Is the market sufficiently large to allow you to set up a new independent business, or is it better to consider another avenue (see below)?
Is it better to start a new running club or acquire one that is already up and running?
A way to benefit from a proven concept and reduce the risk of your project is to take over a running club.
Buying a running club allows you to get a team, a customer base, and above all to preserve the balance on the market by avoiding creating a new player. For these reasons, taking over a business is a lot less risky than creating one from scratch.
Taking over a business also gives you greater freedom than franchising, because you have the freedom to change the positioning and operations of the business as you see fit.
However, as you can imagine, the cost of taking over a business is higher than that of opening a running club because you will have to finance the purchase.
How to make sure your concept meets customer needs?
Once you have decided on your concept and the market positioning of your future running club, you will need to check that it meets the needs, expectations and desires of your future customers.
To do this, you need to present it to some of your target customers to gather their impressions.
Deciding where to base your running club
The next step to opening a running club is deciding where you want to set up your business.
Choosing the right location for your business is like finding the perfect stage for a play. Without it, your business may lack the spotlight it deserves.
Whilst there is no “perfect” location for your running club, one that meets as many of the following factors as possible could be ideal:
- Visibility and foot traffic - For a running club, it is important to have a visible and accessible location to attract potential members and promote events.
- Parking space, road and public transport accessibility - This is important for convenience and making it easier for members to attend club meetings and events.
- Proximity to target customers - A running club should be located near areas where there is a high concentration of potential members, such as parks, trails, or fitness centers.
- Competitor presence - It is important to consider the presence of other running clubs in the area to avoid oversaturation and competition for members.
This list is obviously not exhaustive and will have to be adapted to the particularities of your project.
Once you’ve considered the factors above, it’s important to think about the budget that your startup has at its disposal. You’ll need to find a location that meets your business requirements but is affordable enough, especially short-term.
If you opt for renting instead of buying your premises, make sure to take into account the terms of the lease, including aspects such as the duration, rent increase, renewal, and so on.
The lease contractual terms vary greatly from country to country, so be sure to check the terms applicable to your situation and have your lease reviewed by your lawyer before signing.
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What legal form should I choose for my running club?
The next step to start a running club is to choose the legal form of your business.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
Why is your running club's legal form important?
Choosing the right legal form for your running club is important because this will affect:
- Taxation: your tax obligations depend on the legal structure you choose, and this principle applies to both personal income tax and business taxes.
- Risk exposure: some legal structures have a legal personality (also known as corporate personality) and limited liability, which separates them from the owners running the business. This means that the business would be liable rather than the owners if things were to go wrong (lawsuit, debt owed in case of bankruptcy, etc.).
- Decision-making and governance: how you make key decisions varies based on the legal form of your business. In some cases you might need to have a board of directors and organise general assemblies to enable shareholders to influence major decisions with their voting rights.
- Financing: securing funding from investors requires you to have a company and they will expect limited liability and corporate personality to protect them legally.
- Paperwork and legal formalities: the legal structure you select determines whether certain obligations are necessary, such as producing annual accounts, or getting your books audited.
Popular business legal forms
The specific names of legal structures vary from country to country, but they usually fall within the two main categories below:
- Individual businesses
- Companies
Individual businesses
Individual businesses, like sole traders or sole proprietorships, are made for self-employed entrepreneurs and freelancers rather than businesses which employ staff.
They benefit from straightforward administrative requirements, minimal paperwork to start, simpler tax calculations, and streamlined accounting procedures.
However, the downside is that there's typically no legal distinction between the business and the person responsible for day-to-day operations. This means the owner's personal assets are at risk if the business faces problems or goes bankrupt.
There is also no share capital in such a structure, meaning that individual businesses cannot raise equity from investors which seriously limits funding options.
Companies
Companies are versatile structures suited to projects of all sizes in terms of number of founders, number of employees and amount of capital.
They are a bit more complex to operate than individual businesses with more formalities, stringent accounting requirements, more complex tax implications, etc.
In return, they offer stronger protections to their shareholders. They usually benefit from having their own legal identity and limited liability, meaning co-founders and investors can only ever lose the amount of money they have put into the company.
For instance, if things were to go south (the company files for bankruptcy or there is a legal issue), the company would take the hit, safeguarding the personal assets of the founders and investors.
How should I choose my running club's legal structure?
Deciding on a legal form is easy once you've estimated your sales, decided whether or not you need employees and figured out the number of co-founders joining you.
It's essential to remember that a solid business idea will succeed no matter which legal structure you pick. Tax laws change regularly, so you can't rely on specific tax advantages tied to a particular structure when starting a business.
A proven approach is to look at what legal structures your top competitors are using, and go with the most common option as a working assumption. Once your idea is mature enough, and you're getting closer to officially registering your business, you can get advice from a lawyer and an accountant to confirm your choice.
Can I switch my running club's legal structure if I get it wrong?
Yes, changing your legal structure later is possible, though it may involve selling the old entity to a new entity in some cases, which adds further expenses. If you want to save on such costs, it makes sense to pick the correct legal form for your business the first time around.
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Calculating the budget to open a running club
The next step to opening a running club involves thinking about the equipment and staff needed to launch and run your business on a day-to-day basis.
Each project has its own characteristics, which means that it is not possible to estimate the budget for opening a running club without building a complete financial forecast.
So be careful when you see estimates circulating on the Internet. As with all figures, ask yourself these questions:
- Is my project similar (location, concept, size, etc.)?
- How recent is the information?
- Is it from a trustworthy source?
Startup costs and investments to open a running club
For a running club, the initial working capital requirements and investments may include the following elements:
- Running Club Equipment: This includes items such as treadmills, stationary bikes, weight machines, and other exercise equipment that will be used by the members of the club to improve their running abilities.
- Clubhouse Renovations: If your running club has a physical location where members can gather, you may need to make renovations or upgrades to improve the overall experience for your members. This could include things like new flooring, painting, or updating fixtures and furniture.
- Race Event Expenses: If your running club hosts races or participates in races as a team, there may be expenses associated with these events such as registration fees, transportation costs, and any necessary equipment or supplies.
- Uniforms and Gear: In order to create a sense of unity and identity among your club members, you may want to invest in uniforms and gear for your team. This could include items such as shirts, hats, and jackets with your club's logo or name.
- Technology and Software: In today's digital age, technology and software can play a big role in the success of a running club. This could include things like a membership management system, a website, or a mobile app to track member progress and communicate with members.
Of course, you will need to adapt this list to your company's specific needs.
Staffing plan to operate a running club
To establish an accurate financial forecast for your running club, you will also need to assess your staffing requirements.
The extent to which you need to recruit will of course depend on your ambitions for the company's growth, but you might consider recruiting for the following positions:
Once again, this list is only indicative and will need to be adjusted according to the specifics of your running club.
Other operating expenses required to run a running club
You also need to consider operating expenses to run the business:
- Staff costs: This includes salaries, benefits, and payroll taxes for any staff members such as coaches, trainers, and administrative personnel.
- Accountancy fees: You will need to hire an accountant to help you manage your club's financial records, prepare tax returns, and provide financial advice.
- Insurance costs: As a running club, you will need to have liability insurance to protect your club from any potential accidents or injuries that may occur during club activities.
- Software licenses: You may need to purchase software licenses for programs such as membership management software, scheduling software, or accounting software.
- Banking fees: This includes charges for maintaining a business bank account, processing transactions, and any fees associated with credit card payments.
- Marketing and advertising: You will need to promote your running club through various channels such as social media, flyers, and local advertisements.
- Equipment and supplies: This includes expenses for purchasing or renting equipment such as treadmills, weights, and exercise mats, as well as supplies like water bottles, first aid kits, and towels.
- Rent or lease payments: If you do not own a facility for your club, you will need to budget for monthly rent or lease payments.
- Utilities: This includes expenses for electricity, water, and heating for your club facility.
- Website maintenance: If you have a website for your club, you will need to budget for hosting fees, domain registration, and any maintenance or updates.
- Race/event fees: If your club hosts races or events, you will need to budget for expenses such as course rental, permits, and prizes.
- Training and education: Your club may want to invest in training for staff members, coaches, or members to improve their skills and knowledge.
- Transportation costs: If your club participates in races or events, you may need to budget for transportation expenses such as gas, rental cars, or airfare.
- Safety and security: This includes expenses for security personnel, surveillance cameras, and any other measures to ensure the safety of club members.
- Maintenance and repairs: You will need to budget for regular maintenance of equipment and facility repairs to keep your club in good condition.
This list will need to be adapted to the specifics of your running club but should be a good starting point for your budget.
Create a sales & marketing plan for your running club
The next step to launching your running club is to think about the actions you need to take to promote your products and services and build customer loyalty.
Here, you'll be looking at the following issues:
- What is the best method to attract as many new customers as possible?
- How to build customer loyalty and spread word of mouth?
- What human and financial resources will be required to implement the planned actions?
- What level of sales can I expect to generate in return?
The precise sales and marketing levers to activate will depend on the size of your running club. But you could potentially leverage some of the initiatives below.
Besides your sales and marketing plan, your sales forecast will be affected by seasonal patterns related to the nature of your business, such as fluctuations during the holiday season, and your competitive landscape.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
How do I build my running club financial forecast?
Let's now look at the financial projections you will need to prepare in order to open a running club.
What is a running club's financial projection?
Your financial forecast will help you budget your project so that you can evaluate:
- Its expected sales and growth potential
- Its expected profitability, to ensure that the business will be viable
- Its cash generation and financing requirements
Making your financial forecast is the only way to determine the amount of initial financing required to create your running club.
There are lots of business ideas out there, but very few of them are viable, and making a financial forecast is the only way to ensure that your project makes economic and financial sense.
Creating a running club financial projection is an iterative process, as you'll need to refine your figures as your business idea matures.
You'll start with a first high-level version to decide whether or not to continue working on the project.
Then, as your project takes shape, your forecasts will become increasingly accurate. You'll also need to test different assumptions to ensure that your idea of starting a running club holds up even if your trading environment deteriorates (lower sales than expected, difficulties in recruiting, sudden cost increases or equipment failure problems, for example).
Your financial forecast will be part of your overall business plan, which we'll look at in more detail later. Your financial partners will use your business plan to decide if they want to finance you.
Once you've launched your business, you can compare your actual accounting figures with your forecasts, to analyze where the discrepancies come from, and then update your forecasts to maintain visibility over your future cash flows.
Financial forecasts are, therefore, a financial management tool that will be with you throughout the life of your company.
What does a financial projection look like?
The following financial tables will be used to present your running club's financial forecast.
The projected P&L statement
Your running club's forecasted P&L statement will enable you to visualise your running club's expected growth and profitability over the next three to five years.
The projected balance sheet of your running club
The projected balance sheet gives an overview of your running club's financial structure at the end of the financial year.
The cash flow projection
A cash flow forecast for a running club shows the projected inflows and outflows of cash over a specific period, providing insights into liquidity and financial health.
Which solution should you use to make a financial projection for your running club?
Using an online financial forecasting tool, such as the one we offer at The Business Plan Shop, is the simplest and safest solution for forecasting your running club.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- The software helps you identify and correct any inconsistencies in your figures
- You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
- After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
Finding a name and registering your running club
The next step in starting a running club is to decide on a name for your entity.
For starters, you cannot take a name similar to a name already registered by a competitor or protected by a trademark without inevitably risking getting sued. So you’ll need to find a name available, and reserve it before others can.
In addition, you will probably want to use the same name for:
- Your company’s legal name - Example LTD or Example Inc
- Your trading name - Example
- A trademark - Example ®
- Your company’s domain name - Example.com
The issue is that you’ll need to register your name in three different places almost simultaneously, but with each place having its own timeframes:
- Registering a domain name is instantaneous
- Registering a trademark takes at least 3 months (if your application is accepted)
- Registering a company depends on the country, but it's generally fairly quick
You will therefore be faced with the choice of either registering everything at once in the hope that your name will be accepted everywhere, or proceeding step by step in order to minimise costs, but taking the risk that someone else will register one of the names you wanted in the meantime.
Our advice is to discuss the strategy with your legal counsel (see further down in this guide) and to give priority to your domain names and your registered trademark. You'll always have the option of using a trading name that's different from your company's legal name, and that's not a big deal.
To check that the name you want is not already in use, you should consult:
- Your country's business register
- The register of trademarks where you wish to obtain protection
- Your preferred search engine
- A domain name reservation company (such as GoDaddy)
If the name you want is available, you can go ahead and register it.
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Deciding upon the corporate identity of your running club
The next step in opening a running club is to look at your company's visual identity.
Your company's “visual identity” plays a crucial role in shaping your brand image. It helps you to be recognizable and to stand out from your competitors.
Although you can define your visual identity yourself, it is generally advisable to call on the services of a designer or marketing agency to achieve a professional result.
At a minimum, you will need to define the following elements:
- Logo
- Brand guidelines
- Business cards
- Website theme
Logo
Your running club's logo allows others to quickly identify your company. It will be used on all your communication media (website, social networks, business cards, etc.) and official documents (invoices, contracts, etc.).
In addition to its design, it's important that your logo is available in a variety of colors, so that it can be seen on all media (white, dark background, etc.).
Brand guidelines
Having brand guidelines enables you to maintain consistency in formatting across all your communications media and official documents.
Brand guidelines define the font (family and size), design and colours used by your brand.
In terms of fonts, for example, you may use Roboto in size 20 for your titles and Lato in size 14 for your texts.
The colours used to represent your brand should generally be limited to five:
- The main colour,
- A secondary colour (the accent),
- A dark background colour (blue or black),
- A grey background colour (to vary from white),
- Possibly another secondary colour.
Business cards
Designing business cards for your running club is a must, as they will allow you to communicate your contact details to your customers, suppliers, partners, potential recruits, etc.
In principle, they will include your logo and the brand guidelines that we mentioned above.
Website theme
In the same way, the theme of your running club website will be based on your logo and the brand guidelines we mentioned above.
This involves defining the look and feel of your site's main graphic elements:
- Buttons,
- Menus,
- Forms,
- Banners,
- Etc.
Understanding the legal and regulatory steps involved in opening a running club
The next step in opening a running club is to take the necessary legal and regulatory steps.
We recommend that you be accompanied by a law firm for all of the steps outlined below.
Registering a trademark and protecting the intellectual property of your running club
The first step is to protect your company's intellectual property.
As mentioned earlier in this guide, you have the option to register a trademark. Your lawyer can assist you with a thorough search to ensure your chosen trademark is unique and doesn't conflict with existing ones and help select the classes (economic activities) and jurisdictions in which to register your trademark.
Your lawyer will also be able to advise you on other steps you could take to protect your company's other intellectual property assets.
Drafting the contractual documents for your running club
Your running club will rely on a set of contracts and legal documents for day-to-day operations.
Once again, we strongly recommend that you have these documents drawn up by a lawyer.
Your exact needs will depend on the country in which you are launching your running club and the size of the company you are planning.
However, you may wish to consider the following documents at a minimum:
- Employment contracts
- General terms and conditions of sale
- General terms and conditions of use for your website
- Privacy Policy for your website
- Cookie Policy for your website
- Invoices
- Etc.
Applying for licences and permits and registering for various taxes
The licenses and permits needed for your business will depend on the country where you are establishing it. Your lawyer can guide you on the regulations relevant to your activity.
Similarly, your chartered accountant will be able to help you register for taxes and take the necessary steps to comply with the tax authorities.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
How do I write a business plan for a running club?
Once you've completed all the above steps, you can start writing the business plan for your running club.
What is a running club's business plan?
The business plan is a document containing:
- The financial forecast (discussed earlier in this guide), highlighting the project's financing requirements and profitability potential,
- A written presentation, which presents your project in detail and provides the necessary context for the reader to assess the relevance and coherence of your forecast.
The business plan is particularly important: it will help you validate your business idea and ensure its coherence and financial viability.
But it's also the document you'll send to your bank and potential investors to present your plan to open a running club and make them want to support you.
So it's best to draw up a professional, reliable and error-free business plan.
How to write a business plan for my running club?
If you're not used to writing business plans, or if you want to save time, a good solution is to use an online business plan software for startups like the one we offer at The Business Plan Shop.
Using The Business Plan Shop to create a business plan for a running club has several advantages:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete startup business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can create scenarios to stress test your forecast's main assumptions
- You can easily track your actual financial performance against your financial forecast by importing accounting data
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
Interested? If so, you can try The Business Plan Shop for free by signing up here.
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The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
How to raise finance for my running club?
Once your business plan has been drafted, you’ll need to think about how you might secure the financing necessary to open your running club.
The amount of initial financing required will obviously depend on the size of your running club and the country in which you wish to set up.
Businesses have access to two main categories of financing: equity and debt. Let's take a closer look at how they work and what sources are available.
Equity funding
At a high level, the equity of your running club will consist of the money that founders and potential investors will invest to launch the company.
Equity is indispensable as it provides the company with a source of long-term (often permanent) financing and demonstrates the founders' conviction in the company's chances of success, since their investments would be lost in the event of bankruptcy.
Equity investors can generate a return on their investment through dividends (which can only be paid out if the company is profitable) or capital gains on the resale of their shares (if the company is attractive enough to attract a buyer).
As you can see, the equity investors' position is extremely risky, since their capital is at risk and can be lost in the event of bankruptcy, and the company must be profitable or resellable before they can hope to generate a return on their investment.
On the other hand, the return on investment that equity investors can expect to generate by investing in a running club can be very substantial if the company is successful.
This is why equity investors look for start-up ideas with very high growth or profitability potential, in order to offset their risk with a high potential return on investment.
In technical terms, equity includes:
- Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
- Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company than doing so as you can repay director loans at any time.
- Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
- Investment grants: these represent any non-refundable amounts received by the company to help it invest in long-term assets.
- Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.
The main sources of equity are as follows:
- Money put into the business from the founders' personal savings.
- Money invested by private individuals, which can include business angels, friends, and family members.
- Funds raised through crowdfunding, which can take the form of either equity or donations (often in exchange for a reward).
- Government support to start-ups, for example, loans on favourable terms to help founders build up their start-up capital.
Debt funding
The other way to finance your running club is to borrow. From a financial point of view, the risk/return profile of debt is the opposite of that of equity: lenders' return on investment is guaranteed, but limited.
When it borrows, your company makes a contractual commitment to pay the lenders by interest, and to repay the capital borrowed according to a pre-agreed schedule.
As you can see, the lenders' return on investment is independent of whether or not the company is profitable. In fact, the only risk taken by lenders is the risk of the company going bankrupt.
To avoid this risk, lenders are very cautious, only agreeing to finance when they are convinced that the borrowing company will be able to repay them without problems.
From the point of view of the company and its stakeholders (workforce, customers, suppliers, etc.), debt increases the risk of the venture, since the company is committed to repaying the capital whether or not it is profitable. So there's a certain distrust towards heavily indebted companies.
Companies borrow in two ways:
- Against their assets: this is the most common way of borrowing. The bank finances a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the company cannot repay, the bank seizes the asset and sells it to limit its losses.
- Against their future cash flows: the bank reviews the company's financial forecast to estimate how much the company can comfortably borrow and repay, and what terms (amount, interest rate, term, etc.) the bank is prepared to offer given the credit risk posed by the company.
When creating a running club, the first option is often the only one available, as lenders are often reluctant to lend on the basis of future cash flows to a structure that has no track record.
The type of assets that can be financed using the first method is also limited. Lenders will want to be sure that they can dispose of foreclosed assets if needed, so they need to be assets that have an established second-hand market.
That being said, terms and conditions also depend on the lender: some banks are prepared to finance riskier projects, and not all have the same view of your company's credit risk. It also depends on the collateral you can offer to reduce risk, and on your relationship with the bank.
In terms of possible sources of borrowing, the main sources here are banks and credit institutions.
In some countries, it's also possible to borrow from private investors (directly or via crowdlending platforms) or other companies, but not everywhere.
Takeaways on how to finance a running club
Multiple options are available to help you raise the initial financing you need to launch your running club.
There are two types of financing available to companies. To open a running club, an equity investment will be required and may be supplemented by bank financing.
What to do after launching my running club?
Launching your running club is the beginning of an exciting entrepreneurial adventure, and the culmination of your efforts to turn your idea into a reality. But this is also when the real work begins.
As you know, nearly half of all new businesses fail, so you'll need to do everything you can to make your business sustainable right from the start.
Estimating the future financial performance of a running club inevitably involves a degree of uncertainty. That's why we recommend simulating several scenarios: a central case with the most likely scenario, an optimistic case, and a pessimistic case designed to test the limits of your business model.
Normally, your company's actual financial performance, observed after you start trading, should fall somewhere between your pessimistic and optimistic cases.
The important thing will be to quickly measure and compare this actual performance with the figures in your forecast to see where you stand, then update the forecast to re-estimate the future cash flows and cash position of your running club.
This forward-looking financial management exercise is the only way to know where you stand and where you're going. And, when your figures fall short of expectations, to quickly implement actions to turn things around before the company runs out of cash.
There's nothing more dangerous than waiting until you have your accounts, which takes up to nine months after the end of your financial year (if you are in the UK, abroad your mileage will vary), to then realize that you're not on the right track and that your running club won't have enough cash to operate over the next twelve months.
This is where using a forecasting solution that integrates actuals vs. forecast tracking, like The Business Plan Shop's financial dashboards do, can simplify the financial management of your business and help reduce the risk associated with your start-up project.
Need inspiration for your business plan?
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Key takeaways
- This guide outlines the 15 key steps to open a running club.
- The financial forecast is the tool that will enable you to validate the financial viability of your business idea.
- The business plan is the document that will enable you to approach your financial and commercial partners to convince them of the strengths of your project and secure the financing you need to launch your business.
- The real work begins once you've launched your business, and the only way to maintain visibility of your company's future cash flow is to keep your forecast up to date.
- Using a financial planning and analysis platform that combines forecasting, business planning and actual vs. forecast tracking and monitoring, such as The Business Plan Shop, makes the process easier and reduces the risks involved in starting a business.
We hope this guide has helped you understand how to start a running club. Please don't hesitate to contact us if you have any questions.
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Founder & CEO at The Business Plan Shop Ltd
