The email we got here at SNEWS® got our attention with a subject line that read: "Requiem of an Old Fitness Equipment Dealer." How often does something like that come across your desk?
So we gave Frank Sanders a call. If you remember, he and his brother Bill had sold their 21-year-old, five-store Ohio retail chain to G&G Fitness in November 2006. (Click here to read a Nov. 22, 2006, SNEWS® story, "G&G Fitness acquires The Fitness Store/Ohio.")
Turns out Frank Sanders has slipped into a position with Sunbelt Advisors of Miami Valley, a worldwide business with an office near his home that helps advise, organize and broker businesses heading for or involved in mergers and acquisitions. Sanders, 50, who has an MBA in finance, ran much of the sale process for their fitness retail business and did a lot of research, including with Sunbelt (www.sunbeltofmiamivalley.com) when the light bulb went on for him.
"I really enjoyed the process," he explained. "You hear a lot about mergers and acquisitions so I asked, how does a small to mid-size company come up with an exit strategy?"
For most people, it can be purely chance. He admits he and his brother (who has bought an older home in his area and is going to spend some time remodeling it) were a bit lucky when G&G owners and managers came to them and the match was a good one that has so far worked out and meshed well.
With that experience under his belt, he approached Sunbelt about working with the company in all areas of business, but with an eye out for helping small companies in fitness plan for and make that transition.
"This is a big, big deal," Sanders said. "It's life-changing stuff."
The biggest deal is not to wait, he said, but to start early with all the proper P&L statements, a solid bottom line not depleted by too many vacations, great vendor relationships, a good accountant, and thoughts in advance about the future and exit needs and desires.
"You have to make it happen yourself," he said, sometimes planning a 10-year exit strategy. "You have to get real."
With an industry like fitness, where many retail operators and executives started as the industry itself began, many are also now reaching their 40s, 50s and edging toward 60s. There are more investment groups involved and fewer mom-and-pop businesses. In fact, Sanders said he thinks many of those small store chains with up to five or six stores will soon disappear.
"We were all kids," Sanders admitted of his group that started 20 to 30 years ago and often leapt into the business on a shoestring with no business knowledge. "The industry is clearly in transition. Smaller guys will get bought up or be driven under."
With the trend to fitness and wellness, "the industry will just keep getting bigger and bigger," he added. "There's no question this is a major league trend."
Sanders will be wandering the floor at the IHRSA show on March 29-30 to say hello to acquaintances and offer free consultations. He can be reached by calling 937-313-6835 or at firstname.lastname@example.org.
SNEWS® View: The fitness industry has been and will continue to mature, leaving behind a good number of the "old guard" that hasn't bothered to think about business, exit strategies and bottom lines. Perhaps a three- or four-store chain -- or a company that makes one widget -- seems too small for someone to want to buy it, but it never hurts to look around and plan head. Dumping a few decades of your life into a business then just shuttering it when you retire is not the best scenario. The beauty of someone like Sanders is that he not only has the appropriate background, but he also sold his small business and knows the fitness industry. Could be a great contact for many.