I Bought a gym 3 months ago and its now making money
- Thread starter Nastycrow
- Start date
FireReport said:
I have no idea about insurance. I have guys sign a waiver they cant sue. thats the only safety net I have.
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I thought you'd need to have insurance to do something like that. Thats the one thing that was making me give up on the idea. I definitely plan to open a gym sometime in the future.
RastaThug said:
Why, can you still get in trouble even if someone signs the waiver?
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Maybe, maybe not. Depends on how airtight and enforcable that waiver is.
It won't stop some shyster lawyer from running you through the courts and bankrupting you in the process though.
grumble said:
Maybe, maybe not. Depends on how airtight and enforcable that waiver is.
It won't stop some shyster lawyer from running you through the courts and bankrupting you in the process though.
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Yeah, that's the thing. Let's say some equipment breaks and a member gets injured. They can sue you despite the waiver, even though the waiver might cover you. If you had insurance, the insurance company would be obligated to cover the defense. If you don't have insurance, you have to hire your own lawyer for defense.
mmablaster said:
Yeah, that's the thing. Let's say some equipment breaks and a member gets injured. They can sue you despite the waiver, even though the waiver might cover you. If you had insurance, the insurance company would be obligated to cover the defense. If you don't have insurance, you have to hire your own lawyer for defense.
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Yes, waivers help, but aren't iron clad. There are certain expectations on you to not be negligent that may not necessarily be wiped away just because someone signed a waiver your printed up, if you are still somehow found to be grossly negligent a court could still potentially slam you. And, as mma indicates, one of the major benefits of insurance is the obligations they have to defend claims against covered losses, so even if you are 100% in the right and eventually win in court and your waiver holds up, courts costs and lawyer fees are a b----.
Brick said:
Yes, waivers help, but aren't iron clad. There are certain expectations on you to not be negligent that may not necessarily be wiped away just because someone signed a waiver your printed up, if you are still somehow found to be grossly negligent a court could still potentially slam you. And, as mma indicates, one of the major benefits of insurance is the obligations they have to defend claims against covered losses, so even if you are 100% in the right and eventually win in court and your waiver holds up, courts costs and lawyer fees are a b----.
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If anything, defending a case is time away from work. Time is money.
I have the guy sign waivers in a group setting. All gym members see him sign it. Witnesses. I should get insurance, if I want to start a youth program and add classes. Right now its mostly 20-30yr olds all men. I have a few women who take in the yoga experience but thats twice a week. My main schedule is 4-8pm, all guys get off work, I am off work. 4-6 is grappling 6-8 stand up. rotate every day. Ill take picture of members after class and post. How much would insurance be any idea?
osubuckeye4 said:
Did you at least set the gym up as a LLC?
I hope you aren't running it as a sole proprietorship.
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legal talk isn't my language, can you explain easier for me bro. I bought all the equipment and I only been focusing on rent, is there something I'm missing to be paying?
FireReport said:
legal talk isn't my language, can you explain easier for me bro. I bought all the equipment and I only been focusing on rent, is there something I'm missing to be paying?
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man you're in way over your head
start reading up on what you have to do, go sit down with a lawyer
My father ran a business for ~10 years although it's in Canada I can't imagine it's much different...you can't just rent some space throw up mats and call it a day, that's a recipe for disaster buddy.
GET INSURANCE trust me those waivers wouldn't hold up even if the pope was a witness unless you're a millionaire and court costs mean nothing to you
FireReport said:
legal talk isn't my language, can you explain easier for me bro. I bought all the equipment and I only been focusing on rent, is there something I'm missing to be paying?
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A limited liability company (
LLC
) is a flexible form of enterprise that blends elements of partnership and corporate structures. An
LLC
is not a corporation; it is a legal form of company that provides
limited liability
to its owners in the vast majority of United States jurisdictions.
FireReport said:
legal talk isn't my language, can you explain easier for me bro. I bought all the equipment and I only been focusing on rent, is there something I'm missing to be paying?
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No worries at all.
I don't know the laws of your municipality, but, it's not a requirement in most places for certain types of business owners to incorporate (it is in some places, depending on the business).
You're most likely not missing something that you
need
to be paying. It just makes sense for a lot of businsses to incorporate due to the "sue-happy" culture that we live in at the moment.
I'd recommend you do a quick Google search for "LLC", "sole proprietorship", "LLC vs. sole proprietorship", and something like "different types of businesses". Not because you need to do anything differently, just so you can educate yourself and realize the type of potential liability you could be getting yourself into. Better to know and prepare than be absoultely blindsided.
Here's a really basic rundown of the differences between the two:
http://smallbusiness.chron.com/llc-vs-sole-proprietorship-43276.html
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A number of differences exist between a sole proprietorship and a limited liability company, or LLC, in terms of formation and ownership. A sole proprietorship is one of the oldest forms of business. On the other hand, LLCs are relatively new on the business scene, having gained popularity as a business structure during the 1990s.
A sole proprietorship has the same legal name as the owner of the business or a sole proprietor may file a "doing business as" or a fictitious business name. Filing a DBA allows a sole proprietor to use a business name other than the legal name of the owner. The business name of an LLC must contain an LLC identifier such as "limited liability company," "limited company" or the correct abbreviation. Most states forbid an LLC from using words in the business name that suggest an association with a banking institution or a government agency.
A sole proprietorship consists of one business owner. The owner of a sole proprietorship may not be an LLC, corporation or another type of business entity. Profits from the business are reported on the owner's personal tax return. An LLC may have a single member or an unlimited number of members. According to the U.S. Internal Revenue Service, a member of an LLC may be an individual, corporation, foreign entity or another LLC.
In most states, there are no filing requirements to create a sole proprietorship. A sole proprietorship need only make a business transaction to be considered in business. LLCs must file articles of organization or a certificate of formation with the state where the business operates. Articles of organization contain information about the LLC, such as the number of directors and the business purpose. An LLC must pay the fee to file articles of organization charged by the state. LLCs are often companies that invest in real estate and are rarely retail or service businesses.
One of the biggest differences between an LLC and a sole proprietorship concerns the issue of liability. Sole proprietors have unlimited liability for all business debts and obligations. According to the U.S. Small Business Administration, a sole proprietorship and the business owner are considered the same. Therefore, the business creditors of a sole proprietorship may pursue the personal assets of the owner to recover business obligations or debts. This isn't the case with an LLC. An LLC member has limited liability protection from business debts and obligations. Creditors of an LLC may not pursue the personal assets of LLC members to recover business obligations or debts.
A sole proprietorship has 100 percent control over business profits and decision-making. Because all decision-making responsibility rests with a single owner, sole proprietorships can react faster than an LLC. An LLC may have to vote on important issues that affect the company, unless it operates with a single business owner.
(Source:
http://smallbusiness.chron.com/llc-vs-sole-proprietorship-43276.html
)
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A gym is a very high risk investment. You can do everything right and someone can still trip on a mat and sue you rather easily. If they can prove that one of your staff were negligent in the way they positioned the mat, you're on the hook... if you aren't incorporated, they can come after your personal possessions.
The point is... if they do come after you legally, you really want to make sure that they can't take your house/automobiles/personal possessions along with your business.
Look into spending a few hundred bucks today, in order to potentially save yourself a few hundred thousand dollars in damages down the road.
And again, you don't absoultely need to do this and no one is saying you're an idiot if you don't. It's just something to look into that I, and probably a lot of other members on the board would recommend.
EDIT: I don't think you absoultely need to switch your business model, this is just something to consider. However, you really need to look into either incorporating or getting insurance (one or the other). Operating a gym without insurance and as a sole proprietorship is a personal financial disaster waiting to happen.
FireReport said:
^Thanks for the info. Ill make it a goal to get LLC and insurance by the end of the year
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Someone like @Brick who has exponentially more experience than I do with helping small business owners get up and off the ground with their financial planning would be better to answer if you need one, both, or neither.
At the very least, try to find someone in your area who is versed in your state/cities laws and can advise you. A lot of lawyers will offer free consultations, and most insurance companies will offer you a free quote, so you won't even need to cut them a check if you don't go with them. Another possible option could be to contact an owner of another gym and ask them what their set-up is. Explain that you're a fellow gym owner, some might be willing to help you out/offer free advice.