Hi Five Fitness Aarhus is a comparative new but well reviewed gym in Aarhus, Denmark. So I requested for an interview with the gym owner – Thomas Arentsen. Thomas kindly took his time off in second week of December and granted for an interview followed by a warm welcome at the gate and a grand tour in his gym that evening.
Seriously guys!! you must check it out. That’s a really impressive and well equipped gym with body pump, fitness, biking, yoga, combat, cross fit, outdoor & many more facilities with team of professional trainers. Also there’s a canteen for super quick relax. Check out at the website today: www.hifivefitness.dk
However our interview started just after the tour. Thomas started with a happy note:
Q: How long have you been “open for business?”
Thomas: Exactly on 10th June, 2016 we open this Hi Five Fitness club. It is now almost 1.5 year old. Instead of this brief period, I’m very excited about this fitness club.
Q: How many hours do you typically work per week in/on your business?
Thomas: I like to spend time in this gym but also spend good amount of time with my family. On an average I spent around 50-70 hours per week on my work.
Q: Did you leave another job to open your fitness center? Are you making more or less money now?
Thomas: Previously I was a District Manager of Fitness.dk club. It was quite a good job. Due to some legal inconsistency I left the job and thought of opening my own fitness club. So I partnered up and started the venture. Initially we invested 8 million dkk to build this club. As per our financial plan, the ROI period is about 3 years from the establishment period. We are going well still now as per our expectation.
As for me, I’m making more or less same money as I was earning from my last job. Thanks to all our members who have make this gym a big success.
Q: Is owning and running a fitness center different than you imagined? How so?
Thomas: Actually I have thought for this quite long. So when I started, I was fully aware of what I was going to face and how to overcome it. And it turned out that it was not much different. I am running this club as I imagined. I believe in long term planning. As this club is running very good, we are planning to open two new clubs in Risskov and southern part of Aarhus in coming years.
Q: Knowing what you know now, would you choose to do it again? Why or why not?
Thomas: Yes, because I like it. I would love to make things from scratch. That’s why I’d love to get involved in things.
We are located in a place mostly surrounded by academic institutions. We use to do camps in student fare apart from other media campaigning. Thus our club grew with quite numbers of members. Currently (Dec, 2017) there are 4650 members in here. To be precise, 62% of the members are student .
I am very energetic about the next ventures also. I’d like to get into daily operation to build them from scratch again. It gives me a feel of satisfaction.
Q: What about your business frustrates you the most?
Thomas: We are 16 members team and our goal is to provide the best values to our members. To my opinion, it’s the values that keep our members coming to the fitness club. Also I have planned this gym to be somewhat different but very effective for our members.
Everything – from vast space to best equipments, technology driven training courses, our personal training programs & trainers, combination of yoga, cross-fit and canteen spaces – apart from conventional gym structure in here is to create a better experience for our users.
It’s the small errors and bad face customers that make me frustrated. Just a few days back, one of members faced a problem due to a small mistake made by our staff. She was pissed off and I had to reimburse to get things sorted. I dislike such situations where our members got disappointed. These are small mistakes which can go wrong and cause bad customer experience.
Q: What about your business brings you the most joy?
Thomas: I have been connected to fitness industry for a long period of time. Running a fitness center gives me happiness. I am full of energy and really like to get involved in day to day operation in my fitness club.
Also being an entrepreneur gives me a sense of achievement and fulfillment. I enjoy what I do and I want to keep enjoying it in future as well.
Q: What is the hardest lesson you’ve had to learn?
Thomas: Hmm very good question!! I remember, when we created our first financial plan, it was over optimistic. We expected the ROI by first 20 months from our opening. Not so much financially optimistic – would be one thing that I learnt.
Clear defining roles between partners like who will do what. I’m more close to reality and my partner is active in making financial plans, trade deals, doing business etc like a chairman of board. I’m totally happy about it but I have some challenges to get where we are planning. I need to be closer to financial numbers.
Communication is been a problem to our potential members. So far our members have been our great ambassadors to bring new members in. But we have not been able to connect all the unique way to communicate with the members yet. I’ve plan to improve that definitely.
We’re trying to connect to with more people recently. We are going to organize physical workshop about diet, training, well being etc to promote our values. Also we’re trying to connect online community with physical community. We’ll have selfie photo session where members will share their story over selfies. We’ll use them to reach customers.
Q: Do you see yourself doing this (owning/operating a gym) 10 years from now?
Thomas: Yes, definitely. In 10 years, I guess, if everything goes well, we’ll have 10-15 clubs. I’ll prefer to be sitting on top of the franchise, building up a strong, flat and lean organization. We have thought of several plans for future. One of the things is that we are not going to have any centralized head quarter in a traditional way.
We’ll always have some staffs necessary like HR, trainer, admin etc. But there will be a club manager for every club. We’ll have co-ownership in profits because that makes the club his/her center of interest. There will be no one sitting in the office. Everyone will be having some sort of tasks assigned to work in gyms. They will work with the members to understand their needs and priorities.
Q: How close is the nearest affiliate to your place of business? How has this affected your business?
Thomas: Denmark’s biggest fitness club in 2-3 km away. The second biggest center is Scandinavian Center which is also nearby our gym, that’s just around the corner. They have around 16 clubs in Aarhus. They are the biggest competitors of course.
They give us a baseline and a benchmark. They are running a very good operation as well. So we can not sleep and getting success at the same time. We have to be sharp unless they affect us.
When fitness chains started growing in Denmark, they started as small business like we are and grew with time with more new members by knowing their needs & accommodating that. When they grew bigger, their excel spreadsheet grew as well and they start automating the revenues by raising the prices and lower the cost. When you lower the price, you lower the services as well. With their growing chain, they decentralized the franchise and disempowered people associated with.
I’m very aware of that we have high competitions and want to make sure that if we grow, we’ll keep local people empowered by co-ownership. The managers’ bonuses depend on the new & satisfied members. We need to keep our flat structure with humbleness to know our members more rather than being greedy. We are separate in our own uniqueness and values.
Q: What is your strategy to get new customers?
Thomas: Very simple – “Word of mouth”. We don’t spend too much money on marketing. We provide values to our members who are our great marketers. In 2017, we hardly spent any money on marketing at all.
You need to have filling in new members. You need to churn out ~50% of your customers each year. Everyone does that. The best may be 40%, the not very best may be 65%. We actually achieving close to that.
In the beginning we used to spend a lot. We spent a lot in Facebook ads, Google, outdoor visibility and newspaper. Now we are member driven.
But we cannot rely solely on that when we are going for a new club opening. Then we’ll go for conventional marketing again.
Q: In an era, when Gym chains are crushing private gyms all around Europe, what’s your plan to survive your business in long term?
Thomas: Honestly I believe remembering our core values that we have since we started along – is very important. When you see monopolies, services decrease. I have seen that a lot of places. And I think that you’ll see Fitness World & Fitness.dk have almost created a monopoly.
But it is a service and not a product, people hunger for diversity. When they eventually grow very big, the standard of service goes down if there’s no diversity to offer.
Take another service like hair cutting. You’ll not find any big monopoly in hair cutting because it is a very personalized service. We are something in between them.
So you might not see an absolute monopoly in this sector. People are going to open new fitness clubs in future. So when they become too big, new things pop up. I believe that will never stop. So I believe in being sharper, humble, focused and keep on developing. You need to be hungry, curious and ambitious.
Q: What if, you cannot compete with the cost cutting solutions from big chains and your gym starts facing big losses going forward, what would be things that will be impacted most?
Thomas: They are throwing low prices to the members, providing low service as well. Also they are been disloyal to their ambassador members who are the most loyal ones. They see all the time gyms give discounts to the new members and I can hear from them and also read from Facebook – “Why you guys always throw discount to the new and disloyal members who are anyways not getting retained for longer time, what about us?”
That is why we are building our communication strategy. It’ll be a very easy to understand concept. Our concept is like that we don’t have a starting fee. We don’t campaign for a fixed period rather we campaign all year around. And we constantly have lower prices for membership. We tell the world that our prices are quite lower, our terms are very transparent and our services are of high qualities.
Q: In case of business loss going for a long period of time, what are your plans to make it survive?
Thomas: That depends on why we are taking the lowest. Jokes apart, that’s really a very hard question to answer because lots of factors are associated here. But if I go by instincts, if market disrupts in a way because of online platforms are not basis for fitness clubs anymore, I’ll set for an exit strategy or foresee that such things are coming and develop my business plan in advance.
This was the formal part of the interview. We still carried on more conversation for a while. It was a wonderful session with Thomas. Meanwhile the gym was full house with members in all 3 floors. I must say it’s heck of a job to handle daily operation and planning on a regular basis. But Thomas has a really cool personality to handle things his own way. The location is just near a bus stop, giving it advantage of plus factor to its popularity. All over it is a great gym. I wish Thomas and Hi Five Fitness Aarhus club a very good luck for the future endeavor!!!