-[Geek Climber]I have always been curious about how to start
a climbing gym.
I know the very basic concept of business is
revenue minus cost equals to profit.
And it's all about figuring out how to maximize revenue
and minimize cost.
But, I have no idea how it actually works.
I had an opportunity to speak with ClimberDad,
who is a former climbing gym owner.
I learned a lot from him, and here is our conversation.
-[ClimberDad] I've been climbing since 1995.
I started a climbing gym in Clarksville, Tennessee.
2018 is when we opened,
but it was a long journey getting to that point.
I worked for a wall builder at one point.
I built a lot of home walls.
Yeah, that's who I am, so.
-[Geek Climber] What are the revenue sources for a climbing gym?
-[ClimberDad] Obviously, your memberships.
Memberships are going to make up a huge portion
of your revenue source.
Our membership in the last 12 months made up 45 percent
of our revenue. And then, you have day passes.
Comes in at number two. And our climbing gym retail
comes in as third.
That's like climbing gear.
So, climbing shoes, harnesses, and ropes, carabiners.
I would say that probably most climbing gyms,
events would come in as a third.
I have had a hard time getting our events off the ground.
So,
I was actually really surprised at how well the rentals
did for us.
So, that's something that I definitely overlooked
and was pleasantly surprised at the outcome of them.
-[Geek Climber] What are the recurring costs for operating a climbing gym?
-[ClimberDad] This is something that's going to differ¡@
between every single gym. For us, our number one
biggest expense is the¡@ building that we're in.
And then, employees, insurance, and taxes.
The building is definitely number one.
The other three kind of¡@ switch back and forth
on what's more expensive.
-[Geek Climber] And then, besides recurring¡@ costs and there's also
one-time cost. When you¡@¡@¡@¡@ first start, you gotta invest
a good amount into a start-up¡@ cost. Can you give viewers
a breakdown on what those are?¡@
-[ClimberDad] With our society and how we do finances¡@
those one-time costs end up¡@¡@¡@ being more of a recurring cost
over time because of the¡@¡@¡@ loan that you're taking out.
It's a fairly small gym that I built here.
It's about 3000 square¡@¡@ feet of climbing surface.
Throughout the entire build,¡@ it took us about $150,000
to build, which went onto¡@¡@ a loan. And then, those are
continually paid off.¡@¡@¡@ The goal was to get them
completely paid off so that¡@¡@ would no longer be an expense.
But it definitely feels like a¡@ recurring cost at this point.
-[Geek Climber] What targets do you have to hit in order to be profitable?
Is it a certain amount of memberships that you have to hit?
Is it okay for you to maybe reveal some numbers?
-[ClimberDad] I have a lot of friends that own climbing gyms as well,
and something that they never share is how many people
come in through the doors or how many members they have.
Those are very guarded numbers.
-[Geek Climber] Oh.
-[ClimberDad] I can understand why because if I tell you
that we average 30 people through the gym during the week,
and you can come up these magical numbers
that may or may not be true.
I'm a pretty open book. I'll share numbers.
This is a chart.
These are new, I don't want to say members ... say customers.
throughout the last 12 months. And, you can see,
we're doing pretty good. We've got an upward motion here,
and then this right here is the shut down.
And then, we opened back up in May. That fear
is still there.
-[Geek Climber] What are your ways to bring in customers?
-[ClimberDad] The old school mindset is word-of-mouth.
There's nothing better than word-of-mouth.
One person comes in and they have a blast,
so they go grab three other friends and come in.
And, I would agree with that. I'd say that is the best way
to do it. We have advertised on the radio.
Radio, for us, was a bust. Did not help at all.
And, it's expensive, too.
Another way to bring awareness is through events.
We had several events here. At first, it feels like
we lost money or we washed even.
But, really those events bring awareness also.
-[Geek Climber] How important is the location of the gym?
Like, do you have to be a specific distance
away from other gyms?
-[ClimberDad] As far as like how far away from other gyms,
I don't know if there is a magical number on
how close you can get to another gym.
If you're in a dense area, you just need to be unique
with your gym. Once you decide that you are
going to open a climbing gym, and that it's feasible
in your area, the building is the most important thing
that you need to get squared away.
And some of the things that you may not think about
in finding that space is the parking lot size.
When you're looking at buildings,
you're looking at the height, the square footage,
and the layout of the building as super important as well.
But, people tend to forget about the parking lot sometimes.
And, if you do have a small parking lot,
where is it acceptable for other people to park?
That's one of the issues that we ran into.
I thought we could get away with it
because we have a side spot that people can park at.
But, it's not really marked off. So,
out in front of the building, we have nine spaces.
So, people drive by, and there're nine spaces.
There're 8 climbers in the gym.
And they think, "Oh, wow. They're packed.
We'll just come back another time," and they never come in.
Yet, eight climbers. That's empty.
-[Geek Climber] How did you actually discover this problem?
-[ClimberDad] I've experienced that myself, actually.
So, I've driven past the gym.
I look at it. I'm like, "Oh, wow. We're packed."
And, we're not packed.
Climbing gyms are not really a drive-by.
They're a destination business.
You don't necessarily need to have something on main street,
where it's nice and visible.
You can have something that is a little bit off
of the beaten path.
-[Geek Climber] Before you actually make the leap of faith
and decide to start a gym at this location,
what kind of research is usually being done?
-[ClimberDad] Look at the population that you're in,
how many people live five miles away from your location,
ten miles, twenty miles.
Is it going to be based on a rural area,
where people are more likely to drive a certain distance,
or is it a city environment, where people really don't want
to drive very much?
How much the median income in the area is.
There're lots of things.
We could probably talk for hours just about the things
that you need to do for research.
-[Geek Climber] If it's not profitable operating a gym,
how long would you keep it going before shutting it down
and cut losses?
-[ClimberDad] I don't think that there's going to an exact number.
It has to do with cash flow.
As a business owner, I think you need to, at minimum,
look at your entire business and where that cash flow
is going, once a quarter.
There's a really good book: Robert Kiyosaki,
"Rich Dad, Poor Dad."
One of the things that he said is that the difference
between a successful entrepreneur and someone
that is not a successful entrepreneur is that
a successful entrepreneur knows when to quit.
You can really get into a lot of trouble
by burying yourself, trying to keep something alive
especially when it's a passion.
This is definitely a passion of mine.
-[Geek Climber] Thanks for watching! Be sure to hit the like button
if you learned something new from this video.
Also, make sure to check out ClimberDad's channel
as shown in the end screen.
He has a lot of great videos on business related
to climbing and building a home wall.
See you the next video.