Starting a climbing gym in Columbia SC

Did anyone get a lease on a building yet? What’s the hold up?

other wrote: Did anyone get a lease on a building yet? What’s the hold up?

We don't even know for sure from this thread if anybody is working on it at the moment. There are a lot of moving parts with opening a gym. If you actually find a space suitable and a landlord who wants to talk, getting a lease is probably the easiest part. Financing is the most difficult. Climbing walls are not good collateral. Also construction can get delayed for months if there are problems or wall builders can't be scheduled promptly.

It really shouldn't be too difficult to get a gym open in the current environment. Would strongly recommend approaching an existing gym operator in the region looking to expand given the benefits of scale and to reduce the risk of other large operators from immediately opening other gyms in the area. 

John D wrote: It really shouldn't be too difficult to get a gym open in the current environment. Would strongly recommend approaching an existing gym operator in the region looking to expand given the benefits of scale and to reduce the risk of other large operators from immediately opening other gyms in the area. 

I've wondered before if Inner Peaks would expand south to Columbia. With their experience and success it would be an easy way to make it happen. 

If financing is hard how have the 50 climbing gyms in California got financing?

This thread is awesome.   People are chastising unknown no-one's for not opening a non-gym in a not-so-opportune non-city

other wrote: If financing isn’t hard how have the 50 climbing gyms in California got financing?

Your questions bothers me personally because it took us two years to open our gym in Winston-Salem, and it was not easy. If it were easy, you would see a lot more climbing gyms in general (and a lot more closures since many times people don't do their research, manage their businesses properly, or know what they are getting into and want to get out).

The best answer to your question is because most of them already have established businesses and are simply opening more locations, or they are independently wealthy owners and don't need to get a loan. Most people would need to get a loan to start a million dollar project. Plus, the history of climbing gyms on the west coast is much longer than in the Southeast. They have had more time to get to 50 gyms.

Quick crash course in getting a loan. 5 Cs of credit:

Collateral-The stuff you're buying should be able to be easily sold by the bank to get their money bank in case of default. Climbing walls, holds, and pads are notoriously bad at this since they are custom made and/or in a niche industry. If you're buying the whole building and not leasing this will be easier to swing, but your loan amount will be much higher.

Capital- The cash you've got already. For your whole project banks like to see at least 10% down in cash, for special SBA loans backed by the federal government. For conventional loans this goes up to 20-30%. Do you have $100k kicking around? I don't.

Credit/Character- The history of the business taking out the loan. One of the main reason established businesses have an easier time getting new locations than brand new businesses. Your personal credit score will not help you here, but if it is bad, it will also stop you cold.

Capacity- How much income the gym will make to cover the loan, especially in the first year. The debt service coverage ratio (DSCR) should be very healthy, and lenders don't want to see projected losses in the first year. You need a plan and projections, with research, and you can't make it up out of thin air. Another reason established businesses have an edge (especially if they have little to no current debt)- they have existing revenue streams that can "subsidize" the new gym and make sure the business as a whole can repay the loan

Conditions- This is the only good news. The climbing industry has excellent conditions right now, interest rates are low, and the economy in general is going okay.

You need good to excellent in almost every category to get a loan. Lenders will tolerate few failings. If you are new to the game and your credit as a business is not established, you have to demonstrate a lot of extra shit to get the loan. For our gym, we had to:

-Get together $45,000. We did not buy our building.
-Have two personal guarantors on the loan (meaning if the gym fails the bank gonna take all our money and cams). One of these guarantors is a family member who is about to retire, and who is an executive in a small pharmaceutical company. He has excellent cash flow. The other still works a full time job and manages the gym. The lender demands we do not let our personal incomes fall below a certain amount until the gym is doing alright.
-Offer up real estate we own outright (no mortgages) as collateral. So not only do they take our money and cams, they take our land too. You have to "bet the farm"
-Create a detailed business plan with numbers for literally every expense, and income projected based on size of the market and discussions with other gyms. No climbing gyms are public companies- you can't find this data easily. You have to beg and plead with other gyms to give it to you.
-Even in the first year of business we have had to sink a few thousand more of our own cash to keep things running sometimes.

Overall, Columbia is a pretty small market, and if a gym does come I would expect it to be bouldering only, unless the city sells them a warehouse for a dollar or some other real estate sweetheart deal. A million dollar gym in Columbia would have huge troubles in the first year if it had to pay rent and loan payments. The general populace there is unfamiliar with climbing, it takes time to draw people in. In California, it's the cool thing to do. Instant customers.

Jay Dee wrote:

I've wondered before if Inner Peaks would expand south to Columbia. With their experience and success it would be an easy way to make it happen. 

Be careful what you wish for. 

Russ Keane wrote: This thread is awesome.   People are chastising unknown no-one's for not opening a non-gym in a not-so-opportune non-city

Welcome to MP!

Calf-lete Osborne wrote:

Be careful what you wish for. 

?

Brew fan that was a good response. Older climbing gyms were cheap dumps and the newer ones are much more like professional health clubs. You didn’t mention getting investors to lessen the amount that the founders and owners had to pay out of pocket 

I see a lot talk but, who is a least trying to start a climbing gym in Columbia SC? Who do we send money to maybe be a lender or something? I just want to see something started if someone doesn't start something rock climbing will never become big like it is in California!

If there is anyone in charge and/or working on this, maybe they can start a GoFundMe? I'd contribute, but I definitely don't have the resources or knowledge to open a place myself. 

Why would a stranger contribute to a for profit business on a charitable donation site?

It happens all the time. People sometimes want to see a business open up so badly they are willing to kick some money in. It certainly isn't the main way to acquire capital but it can help get a little startup cash as well as advertise the business ahead of opening.

David Williams wrote: ..... if someone doesn't start something rock climbing will never become big like it is in California!

Lord I hope it never becomes big around here.

Wondering if anyone has taken any steps towards this goal since this thread was made? I would really love to see a gym in Columbia that way I could be a member and go climbing regularly instead of once a month in Augusta or Charlotte.

David Williamswrote: Where in Columbia would you open a climbing gym? I so badly want to get back into climbing. I am unable to leave SC custody battle reasons. Not only do we need a climbing gym we need to work on the schools here as well the public schools suck. So, does the crime level. If we added a climbing gym and made the schools at least similar to Fort Mill SC, Tega Cay SC, or  Brea Ca. I believe that that the crime level would decrease! 

hahahaha.  im stuck here for a custody battle too.  can we climb together please?