When I was a child, the world seemed so much smaller to me. And my world really was smaller at that time because it only consisted of my family, friends, neighborhood and school. As I grew up, I began to realize that the world was so much bigger than I ever imagined because my life experiences caused my world to stretch and grow. As my world grew, my perspective on issues evolved — and they continue to evolve as my world continues to grow.
That's what I was struck by when working on this month's cover story, “Show Me the Money.” People's perspectives during a recession vary greatly, and their perspectives on our current economic world determines their path — and, possibly, their chances of survival. For some people, the world is tiny; it's just their club, staff, members and competitors down the street. For others, the world is larger, with any struggling competitor looming as a possible acquisition. And for still others, the world is even larger, with club companies in distant states seen as acquisition targets that could open whole new markets and take a company to the next level in the industry.
Of course, to have this larger view of the world, it helps to have some deep pockets behind you. Club operators who are struggling to make the next payroll can be forgiven for not being able to see much further than that. But it does go to show that one club operator's reality is that this recession is a huge opportunity. Another's reality is that it is a nail in the coffin.
However, as I heard several times while researching the cover story, venture capitalists are out there looking for places to put their money to work, and the health club business has such potential for growth with a lower penetration rate than many other industries right now that capital-rich firms can't help but seriously consider the upside to investing in a well-run club operation.
When I spoke with Eric Casaburi for the story, he was flush with excitement talking about the growth potential he sees for his company, Retrofitness, a 1980s-themed club franchise. His world is big right now, as he has a major private equity firm standing behind him and plans to expand from 40 clubs to 350 in the next three years. He basically said that it's up to club operators to change their own world. Instead of living in a world of fitness, they should live in a world of business. They should surround themselves with people who have business experience rather than fitness experience.
A change like this would turn a lot of people's worlds upside down — or at least sideways. But perhaps that's not such a bad thing. If the world you currently live in isn't to your liking, perhaps it is time to live in a different world — and I don't mean leave the health club industry. I mean view yourself and your club differently. Learn from other businesses: hotels, restaurants and retail shops. How do they reach new markets and take care of current customers? What do they do to make themselves attractive to investors? What are they doing to survive this economy that doesn't require additional capital?
Take a broader look, stretch your world and then look back on this recession to see if your view has changed. I bet it will.