Choice of location
No matter what type of business you operate, setting up shop in a remote or hard-to-access location may seem like a guaranteed path to failure.
However, in some instances, doing so may prove a cost-effective means of testing a business concept in a low-risk location.
Speaking on the My Business Podcast, Justin McDonell, founder of Anytime Fitness Australia, recounted how he initially launched in Gunnedah, a country town in north-eastern New South Wales, and other country towns following that.
“[Gunnedah’s] a town of about 7,500 people, so quite small,” Justin says.
“We launched in a lot of country towns, and then sort of hit Sydney, and really sort of dominate the market now. We're the biggest player in the marketplace, which is great.”
Initially targeting those smaller regional areas, rather than bursting straight into major metropolitan areas, was a targeted strategy, admits Justin.
Unsure of how big Anytime Fitness Australia would take off and grow, he decided to look at lower rent bases as a first port of call.
Aside from reducing costs for the fledgling business, country towns provided a tougher testing ground for the concept of a 24-hour gym model.
“We thought if it works in the country towns, it'll work in the bigger cities,” he explains.
“Our price point back then, I think we were $45 a month. We were much cheaper than the competition, and were probably a little afraid to pay the higher rents of what we do today.”
Maximising the returns of a location
Physical premises is a major component of the operating costs of most businesses, so it makes sense to have your location deliver its full earning potential.
While he admits it has been a lengthy and expensive process, Aaron admits upgrading the “old shed” from which he operated from to a multimillion-dollar modern facility is now allowing the business to derive revenue from its prime location over and above its core operations.
“Any development over the water in Sydney Harbour is a massive process to get approved,” Aaron explains.
“It is incredibly expensive in money as well as time. That is something you often underestimate, is how much time you put into these things.”
Today, the Rose Bay location is much more than just a terminal for boarding one of the company’s planes – it offers a lounge, VIP space, function area and restaurant, and even a museum demonstrating the history of seaplane aviation at the site.
“It's about six times bigger than the building that we previously operated from,” says Aaron.
“There is a food and beverage offering in there. It's got spectacular views over Rose Bay, so we want to leverage that as much as possible.”