Welcome back to the Entrepreneur’s Spotlight series.  In this series, we look at successful startups and ventures in the health and fitness industry and interview the hard-working entrepreneurs behind these companies to discuss how they did it and what they learned along the way. 

Today, the spotlight is on Studio Fit Chicago (“Studio Fit”).  Studio Fit is co-owned and operated by two amazing women, who also happen to be best friends, Puja and Susan.  Studio Fit is actually particularly near and dear to me because I have worked there for the past year, teaching their hot express power yoga class. Therefore, I have had the opportunity to witness first-hand how vital it is to have motivating, high-energy management to successfully lead a fitness studio. The Studio Fit team feels like a small community and Puja and Susan have been creative and responsive in continuing to improve on the studio’s brand and culture since they purchased the studio about a year ago.

Studio Fit is a female-only, community centric, boutique fitness studio in Lincoln Park and is located at 1011 West Armitage in Chicago, Illinois. For more information on please check out their website at http://www.studiofitchicago.com/#home.

One of the things that I found particularly interesting about Puja and Susan’s experience was their ability to purchase a fairly young fitness facility from its founder. Often times, an early sale of a company in the fitness industry would not make sense for economic reasons (since building a client base and community buy-in can take a few years), leaving an exit event for later in the company’s life cycle when the business is profitable. Here, Puja and Susan had the challenge of taking over the studio from its founder during a pivotal stage in its growth, all while maintaining their day jobs in advertising and marketing. So without further adieu, let’s hear what they had to say.

Enjoy!

H&F Law Blog: Puja and Susan, the two of you partnered together to purchase Studio Fit approximately one year ago from its founder. What made you decide to purchase a fitness business? How did you know that you were ready to take this on?

Puja and Susan:   Both of us were looking for a new challenge to take on, and the opportunity with Studio Fit just presented itself. We were both customers of Studio Fit and really loved the culture and community it had created. I'm not sure anyone ever knows for certain if she is ready to take something like this on, but to ensure we felt prepared, we spent several weeks researching the industry dynamics, talking to experts in the field, and asking as many questions as we could think of. Sometime during our exploration process, we realized that the idea of not following through with it seemed devastating. That was when we knew it was the right move for us both.

H&F Law Blog: Studio Fit has been open for about 3 years and as such, what kind of due diligence did you conduct prior to purchasing the studio?

Puja and Susan:  At the most fundamental level, we needed to understand how the industry worked. Without understanding that, we'd have no way to assess whether Studio Fit was the right purchase for us. We asked a few key questions, such as 'what are the typical opportunities and challenges with businesses like this', and 'what has caused others to succeed or fail?' We also spent a significant amount of time, especially early on, attempting to understand the competitive landscape, and some of the macro-factors that would impact the business. Once we had a sense for that, we focused on the financials and metrics of the existing business. We needed to understand how many current clients and instructors the business had, what that translated to in terms of revenue and margin, and how many clients would be needed to sustain and grow the business. We ran several 'what-if' analyses to understand the overall opportunities and risks if certain events took place. We wanted to ensure we had thought through as many scenarios as possible before undertaking such a large commitment.

H&F Law Blog: In addition to running Studio Fit, you both also maintain successful careers.  How are you able to do it all?  What advice would you give someone that was contemplating owning a fitness facility while also keeping their regular occupation?

Puja and Susan: The biggest challenge with taking on any big initiative is that there are seemingly a million different things you can do, but time, budget, and resources are limited. There are so many projects that we want to eventually take on, but we know that we need to focus on those that are most impactful and critical to our overall vision. The key pieces of advice we would give are: 1) Set clear objectives. If you don't know what you're looking to do, you won't be able to gauge if it's working. 2) Prioritize. If you try to do everything at once, it will all fall apart. Make strategic choices based on your goals and constraints, and continuously reprioritize as you learn more. 3) Divide and conquer. Take ownership of certain pieces, and hand over ownership of others. It becomes tempting to have a hand in everything, but it's neither effective nor productive overall.  

H&F Law Blog: Prior to purchasing Studio Fit, the two of you had been friends for a long time. It is very clear that you work well together and complement one another in a variety of ways but did you ever have any concerns about going into business with a friend?  What is the single most important attribute that you would advise others to look  for in a business partner?

Puja and Susan: I think there are always concerns, because we have all heard the horror stories of friends or family members becoming business partners and then everything goes awry. The single most important attribute to look for is someone you can trust. Because, as we said earlier, there are so many different things that can be done, you have to have faith that the other person will be there when you can’t, and will follow through on what she says she will.

H&F Law Blog: What separates Studio Fit from other fitness studios in Chicago?

Puja and Susan: We know competition is fierce and that there are many places you can get a great workout. But it’s our sense of community that helps us stand apart in the marketplace. We have an incredible group of clients, instructors, and staff that genuinely enjoy being around one another. It’s that community piece that makes working out more of an experience and less of a chore. We focus on fostering a culture where clients and employees can feel free to share ideas, concerns, and feedback openly so that we can strive to create a better experience. A perfect example of this is that we heard feedback from clients that they would enjoy being outside when the weather is nice since as Chicagoans, we embrace our summer months. We now offer 2-3 classes per month in OZ park.

H&F Law Blog: I know that Studio Fit offers special classes during various Holidays. How have clients responded to this? What are some of these unique classes the studio has offered?

Puja and Susan: Clients have responded really well to our holiday and special themed classes. Workouts can sometimes feel like a chore, and mixing it up with holiday music, costumes, or new themes helps keep customers engaged and having fun. We have hosted a few holiday classes, including a Thanksgiving Tone and Twerk class, where we donated food to the Lakeview Pantry, a Valentine's Day "Sweat with Someone you Love" class where members brought partners and loved ones, among others. We've also hosted many special themed classes, such as 'Beyoncé vs Destiny's Child' and '90's night.' The girls have gotten really into these classes and often make requests or suggest the next special class.

H&F Law Blog: What are 2-3 legal issues that you have faced in operating your business?  How did you address each issue?

Puja and Susan The largest legal hurdle we had to overcome involved the structure of the transaction in purchasing the business. Since we’re not lawyers, we had many, many questions about the best method to purchasing the company, what liabilities we would have to take on, and some of the risks we needed to consider. Our attorney was great helping us navigate those and providing information/guidance. Another major issue we faced was just setting up our initial partnership agreement (which defines the structure of our business relationship). As the first major business venture for both of us, it was difficult to know some of the things we should consider if different legal scenarios arose. For example, what to do if we have a major disagreement in our partnership, or if one of us wants to exit one day while the other doesn’t. These were key things to discuss and plan for early on. Having good legal counsel to walk us through the analysis regarding the structure of our business and our relationship was very helpful.

H&F Law Blog: What business issues are you still trying to solve?

Puja and Susan: I think the largest business issue we are trying to solve for today is getting awareness out about our brand. As we look to grow and expand, we need to broaden our reach in the market, and we’re still navigating the most effective ways to do that.

H&F Law Blog: What is the most important or interesting thing that our readers should know about Studio Fit?

Puja and Susan: We have an incredible community and a really great group of instructors and clients. We strive to make Studio Fit a place to reach individual goals with the support of a local community. Working out shouldn't be something you make yourself do a few times a week - it should be something you look forward to, that inspires you, and pushes you to feel better about yourself. We strive to provide an experience that emphasizes the physical as well as mental well-being, becoming a part of a healthy life, and not just a short-term trend.

H&F Law Blog: And that’s a wrap! I hope you all found Puja and Susan’s story and perspective as encouraging as we did.