“You’re Walking Into a Nightmare”
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- Опубликовано: 19 май 2024
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The 5 friends really got the business plan after getting drunk.
While rock climbing! 😂😮
Already two rock climbing gyms "around here" as well.
Building the gym is the easy part.
Breaking into a market against established competitors is the hard part.
Poor kid has no clue what he would be getting into.
It probably wasn't what the caller wanted to hear but it is what he NEEDED to hear.
The rock climbing gym near me couldn't pay their rent and the owner put chains on the door.
He's actually saving them a lot of heartache..don't do business with friends and family.
Agreed.
Stop parroting Dave. Too bad your family sucks. My family is great in my business. We also borrow money between us because we’re not petty. We’re adults.
more so with multiple friends, in which individuals may want out for other opportunities, resulting in the headache of how to allocate assets, but more likely liabilities.
Totally agreed. Working with family is the worst. Question though, how does Dave know Rachel?
So Dave says don't do this but men loose half there house cars retirement at divorce even if wife never work day in her life
Caller: Climb rocks?
Dave: Kick rocks
rock on
Dave's on point about the 5 guys. It will shake out this way: One guy will end up doing 80% of the work. Two of the guys will do some of the work, but only if you keep after them. The remaining 2 guys will do none of the work, but will complain constantly about how the company is being run.
Five partners is a recipe for disaster.
No joke, they’re all going to want a 6 figure income out of the gate and only one of them is needed to actually run the place 😂
If you want to stay friends, don't go in biz together, don't roommate and don't loan money.
I've started 2 successful businesses. Never borrow money in the outset. Find a business model that allows you to run it out of your home until you have enough income to justify rent.
Good advice
Honestly, it’s hard to hear this good advice when you’re really passionate about making something happen. My wife started doing some contract work for a friend about 7 years ago and after a year of her helping to grow her business she invited my wife to be a partner. It’s been a literal nightmare for her to dissolve this partnership and it’s finally happening next month. Their relationship is completely over as well. If you want to keep a friend, don’t go into business with them.
Imagine renting the premises - buying all the wall material, constructing it all yourselves, then hitting cashflow problems and not being able to pay the premises rent with 200k of wall locked out of your reach.
It's not just the cost of building the walls. There's also paychecks for everyone working there, taxes, rent on the facility, utilities, insurance, probably other things I don't know about. You have to have two years of that covered up front, then risk it in hopes of eventually becoming profitable. All while competing with established businesses.
Insurance would be high I would think since customers have a higher likelihood of getting hurt there than in other businesses.
Once you split any profits of a small business amongst 5 owners, you're getting below minimum wage or trivial ROI on the money you've put in. If you have to pay interest on any of it you're losing money every day the doors are open.
Yeah, no way will it support one person, let alone 5.
too many people involved, too little demand for it, no experience = not a good idea...
Yeah, I hope he takes Dave's advice because I can't see this business getting off the ground. Plus, he could lose his 4 best friends over it for nothing. Definitely not worth it.
Rock climbing gyms are very popular. All the ones in my city are. However, depending upon the size of the city, maybe more than a couple aren't worthwhile.
“Too little demand” based on what?
Exactly
@@mustangthings based on supply and demand, like Dave compared it to a gym only this is a specialized gym, if you an to rock climb there are already a LOT of place to go do it, why would they go to this new gym that was homemade by the way? You would have to see how many places are close by people already go to in the area the wanted to build it, then figure out the cost they would charge and a reasonable expectation of how often people, would do it...if you charge $20 a session and 20 people show yup a week you cant pay for the overhead let alone start paying off the 200K loan Then start to actually make money...Even if it was popular and say 100 people visited a week, and they got $30 each thats 3k a week...what do you think it costs to heart a massive room in the winter or cool it in the summer? electric bill for lights, water bill for bathrooms you have to provide to your customers...equipment costs are probably super low which is nice...Dave was driving that its too specialized with such a niche customer it would be a miracle they paid off the debt let alone made a profit...
That business would hit the very wall they build.
😂😂😂😂
Poetically said!
😂😂😂
😂😂
I loved this call. Dave is being a good dad.
There’s a rock wall that you pull behind a truck, built on a trailer. You get trailer where you want and turn on hydraulic switch, it stand’s itself up. No building to rent and I’m certain this trailer setup is nowhere near the amount you spoke of. I watched a family business at flea markets in Alabama doing this. They actually had a good bit of customers all day, all weekend. They also had some bungee jumping thing for kids on a trailer. The business model you speak of, renting a building, after a brief time you’ve already had everyone in the area do it, and not care to do it again. If you have a trailer setup, you travel to different markets and you always have new customers
Not hiring a professional to build a rock-climbing wall has risk and liability written all over it.
Listen to Dave, he knows of what he speaks!!!! In the late 40's my dad and 7 buddies started a logging operation on Northern Vancouver Island (west coast Canada) 50 miles from the nearest town. Within three months they were down to two people, my dad and one partner.
They made it work! eventually buying a lumber yard in the town and stayed partners for decades until they retired and sold the business. Some of the stories they told us were out there! bears in the machinery, wheels falling off of trucks etc. They retired successful! As my dad said it was the school of hard knocks.
Always amazes me how out of touch some of these business ideas are. Go 200k in debt with 5 friends for something highly questionable in terms of financial viability
"No pun intended"
Dave was fast on the draw with that quip. Hope we see more of that 🤣
The best business to start is one that solves an issue.
A town needing a good grocery store or a funeral home … or a car repair place… I can think of a zillion great ideas and rock climbing place is not one of them
I'd be afraid to go to *any* gym that wasn't professionally designed. I'm not ready to die, and I wonder what the insurance would be like.
I’m just glad this young man called before actually moving forward. One thing I’ve learned about investing or putting your money into, is to always ALWAYS, talk to a council of men that are already experienced in the field you are looking toget into, and asking them their input.
Split the money 5 ways. Heck no!
Dave: What you going to do?
Caller: Ignore your advice
Lol! That’s pretty much it!
"Bro, let's climb some effing walls and gets paid for it! YA BRO!"
Dave is 100% right here.
Four of the guys won’t lift a finger.
"Hey, I'm a business OWNER. Working is for the people we hire!"
Let’s open up a business that less than 1% of the population wants to pay & participate in. 🤦🏻♀️
And less then 1%, will mean more more for you.
@@jimmymcgill6778 "Then"? Then what?
Totally agree!
That's not the issue... You can have a successful business with a very small client base. The issue is spending $200k up front before you have any revenue.
Come on man... it's the sport of the future! No... wait... that was Kick Boxing... in the 80s. 😀
My uncle owns a franchised gym and it is a TON of work! He has to go in a lot and deal with awful stuff. Once he had to clean poop off the bathroom wall. Also, he almost lost his business during Covid, but he's smart enough to figure out how to make it through, but that ate up his money that he was going to use for an expansion. He's also run many businesses, so he has a lot of experience.
I think every business that has a bathroom has had had an employee or owner clear poop off the wall.
Sure the liability insurance would be expensive. Florida also isnt a state that's popular for rock climbing. Now if you wanted to make a small business building backyard wall climbing walls...that might be better. Lower startup cost for sure. Can sell to a larger area.
I love entrepreneurship, but so many people have a complete misunderstanding of what it actually means to start and run a business. One of the most common things I see is that people conflate revenue with profit. They'll get excited when they hear revenue numbers for a small business and think that is the same as the salary the business owner takes home. People don't often consider the true cost of running the business against the revenue to determine what kind of actual profit is brought in by the business. The cost of doing business often tends to be a good deal higher than people often estimate.
A big thing with this caller is that he and his friends want to go into the business together because they likely love rock climbing, and so they see it as a way to hang out and do what they love and make a lot of money doing it. I've been in so many conversations like this so many times. These guys are excited by the prospect of spending all day every day doing what they love and each making $200K+ a year for the first while until they can grow and make a lot more and that working 9-5 jobs is for suckers that just have no vision.
This guy should get a job working in a rock climbing gym and work into management so that he can have a very clear understanding of how the gym is run and what that entails. Often people will find that they don't want to mix business with their hobby because it then ruins that hobby. If after working as a manager at a gym and spending serious time researching the market and considering not only starting a new gym but running as part of a franchise or partnering with an existing gym or working his way into a shareholder in a successful gym chain he still wants to start his own gym, then at that point, he should have a lot more knowledge on what he's getting into and determine whether that is the route he wants to go.
Friends or family make the WORST business partners!!
Yep. My husband worked with his dad flipping houses many years ago. His dad screwed his own son out of a lot of money 😡
Would be open less than six months.
I didn’t know Dave has a podcast for businesses! I instantly subscribed.
The rock gym I went to in the 90s was a crappy building next to the railroad tracks. It had unpainted walls, one of those propane heaters on the floor, and they were building it as we were climbing it. It wasn't amazingly tall, fancy, and I doubt they were making bank on all the broke college students but it was fun and it survived.
Great advice in this. Love the “nightmare killer” framing 😂
the only this would make sense is to look for a rock wall business that is going out of business, buy it cheap
And . . . all five of you keep your day jobs!
If it’s going out of business it’s likely because it’s not able to profit
@@davesrvchannel4717 It wasn't able to profit because the original owners couldn't recover the money they spent on setting it up. If they sell it at a big loss, then the new owners don't have as much to make up for.
"The only ship that won't sail is a partnership". 😂
5 guys and each of them only got $5,000 saved up.
I don't like it.
Never borrow money from friends or go into business with them
Why would anyone even dream of doing this?? My guess? He does it anyway.
They are young with dreams. We all were at that age. The thing is though, most of us kept them as dreams and saved ourselves hundreds of thousands of dollars.
no bank would give them a loan without serious collateral. Why they want to is probably because the other gyms in the area aren't exactly to thier liking so they think building taller more challenging walls will get everyone to switch
Opening a rock climbing gym business in a location where there is also significant and established local competition?
How are you going to break into that market, and how much is it going to cost?
Building the facility is the easy part...
Dave: Absolutely do not do this.
Guy: I'm definitely going to do this and fail.
Dave: "Do you know what the failure rate of a gym is?"
Caller: "Is it high?"
I definitely admire the caller's spirit on this one, but I agree this plan hasn't been thought through enough yet. Don't spend money on a venture until you plan it out, look at the risks, and know the failure rate.
That said, I bet this guy could get multiple nearby gyms to let him put up flyers for a weekend rock-climbing class that he and his buddies could run outside their regular jobs. Make sure they actually like teaching rock climbing to others, gauge the local market, make connections with the established gyms, and pull in some more money to expand later.
Caller: How do I fund a rock climbing business with my buddies?
Dave: Sell your friends.
Anyone else get excited when he said "build the walls"?🇺🇲
😂👍🏻🇺🇲
Question one: Will this EVER make enough money to support five (5) families? The up-front capital cost is a challenge, but it's not the biggest challenge or the biggest cost. Utilities, INSURANCE, rent, INSURANCE, PAYROLL, INSURANCE, marketing, INSURANCE. The way the guy talked almost exclusively about the up-front cost of building the wall . . . they haven't thought this through at all. They may not know enough to know what to ask.
Dave 100% right.
Please go back to including the beginning of the call! I need to hear Dave say “better than I deserve” when someone asks how he’s doing
Bunch of rock climbing bros running a business what could go wrong
LOL
Five dudes rock climbing gym partnership is just a bunch if dudes hanging out.
They’re gonna do it anyways. ☹️
😂
Yep, and then a year later this guy will be calling about how he is 200k in debt and his friends all bailed on him and he doesn't know how to fix this.
😂😂😂😂😂😂
a bank would be insane to give them the business loan unless they have a house to put up as collateral
Nope. They don't have the money to start it. No bank will lend them the $200K either.
Love the show keep grinding ❤
do a traveling rock wall. you show up to parties and events with a small rock wall. you just need the wall, equipment and the vehicle to transfer it
The only ship that won’t sail is partnership
So you’re saying no couple anywhere has a chance of working together?
@@barnabusdoyle4930You've got to run a business yourself. Take on employees, not partners. Most partnerships fail.
@@barnabusdoyle4930 He is just repeating what Dave said in the video. And yes, partnerships are very dangerous. Working together is a completely different than a partnership. We all work with people. But when people share a partnership in something, that is where it becomes less successful. You have 2 or more people wanting to do different things and that can make it quite difficult. It's best to have 1 person that owns the business and everyone else works there.
“You can be whatever you want” but it better be something you can make a living at. I can only imagine that there will be NUMEROUS days every week there will be zero customers, but yet they’ll still have to pay the rent, utilities & employees & insurance.
Going into business with friends is like borrowing money to friends don’t expect it back anytime soon.
On some level every small business is a gamble. Even when Dave started his business it was a gamble. I wonder what factors would cause Dave to give this guy the go ahead. If he had called up and had $150,000 saved up, had worked in a rock climbing gym for 3 years and had only one partner in the prospective business if Dave would have given him different advice.
YUP
That's true, but the scenario you describe is FAR different than what this caller is describing.
1:31. Dave is so proud of himself for that one! 😂😂
Bunch of dudes want to have a free playground.
I love Dave’s body language in this😂
My local climbing gym is struggling with exactly this right now. Opened 7 or so years ago and they're starting to feel the struggle. Personally don't think they will last much longer. Sad to see them go
Sounds fun on the outside but could be a nightmare in reality, I think Dave is right about working with someone who already owns a gym and get the scoop
Doing this would be a disaster. Not many small businesses are successful that have many multiple owners. There would be too many hands in the cookie jar, and this would open the door wide open for accountability issues. It's not too hard to fire a lousy employee, but it's impossible to fire a partner for laziness and incompetence. As soon as Dave asked him if he knows what the failure rate of gyms is and the caller didn't know the answer, that tells me he hasn't finished his homework before he's ready to do this.
I couldn’t imagine the insurance and liability on this either.
My fear is if they build it themselves someone is likely to get hurt in a climbing accident and they will be liable
Caller: I never said we drink beer together, Dave. 😢
Let’s just say even buying everything they could actually make money then you have the fact that that money will have to be split five ways not one or two like most business ventures starting out let that sink in
Literally climbing a mountain of debt. 😂
Wait until he finds out what liability insurance will be for a business where somebody will actually be in danger of dying from a fall.
The liability insurance would be really expensive too!
I’m not very smart but I knew this wouldn’t work before Dave even commented .
"...two gyms I go to around here". Look at what you're saying dude, there are already two gyms in your area, do you think a third one will get enough business to succeed for the long term? Doubtful!
Yes…. We got like 5 climbing gyms in Minneapolis, and they’re all crazy busy
@@morgenglende-michalski369 for now... Just like all the fro yo shops were packed when they all first opened, now there is one left in the mall and they are rarely busy! Trends...
@@morgenglende-michalski369 Hey, when I was young, trampoline parks were huge and crazy busy. And then it was like every other fad and died suddenly.
There is no way there will be enough money to go round with five people. If you start a business on your own, or with one other partner, and pour your heart and soul into it, putting in as many hours as it takes, then you just might make it. You still need the right business though, and wall climbing just doesn't appeal to enough people imo.
So me and a few of friends, learn to talk.
Rock climbing has been around for ever. The real climber climb the real rocks.
“Real climbers” (whatever that is, imagine gatekeeping something like this) use gyms, too.
@@mustangthings Real climbers have no interest in climbing something less than 100 feet high.
@@amireallythatgrumpy6508 Adam Ondra, an Olympic-level climber, has sent a V16 boulder (among other things). He also owns a climbing gym. Is he not a “real climber”?
@@mustangthings Real climbers laugh at the Olympics. So yes.
@@amireallythatgrumpy6508 “Real climbers” don’t think Adam Ondra is a “real climber”. Got it. 🤡🤡🤡🤡🤡🤡
Man he got crushed!
It would be a nightmare. The other investors probably wouldn’t come to work. They would depend on one person. They probably would be borrowing from the cash register and saying they’ll pay it back. I hope he doesn’t do it.
The price of building walls etc could be elevated due to the current popularity of the activity ?
The thing is is that this guy and his friends really have not thought all of the costs through. It will cost these guys a lot every month just for insurance having a place where people can get seriously hurt. I agree with Dave. I think if these guys started this business at the place they are now, they can end up deep in debt with a business that isn't even working right and worse, lose their friendships. That's why you never want to start a business with anyone that you want to continue being friends with. Because if it goes south, which it probably will, they will all be blaming each other, and their friendship will more than likely never be the same again.
You could hear the distain in Dave’s voice when he said “Rock Climbing Gym???”
Isn’t there a song called “Young dumb and broke”?….
If there are two climbing gyms in the area is there really a market big enough to support a third? Maybe work at one of the existing gyms and learn the ins and outs for a few years. Stack cash and find a market in need of a gym.
I feel like rock wall climbing would be in addition to a traditional business model such as a gym and then have such a thing asded.
Would love to have accurate captioning on these calls …
With the economy the way it is, rock climbing gyms will not be a priority.
Yes there would be ROI. Climbing is a good business right now.
I stopped going to my rock climbing gym because they are charging too much now, $22/per day, more like 32 if you have to rent shoes and chalk which you need but bring my own, used to be $12 in 2019. Ridiculous just to climb around on plastic! You get tired within an hour or so, nope. And it's a shame because I like rock climbing.
Wilson just owned by Papa Ramsey.
No money to get it professionally done, imagine when a climber falls and breaks their leg no money for liability?
he's still going to do it
Jade girl you are taking it!! You look absolutely fabulous in this clip. The slick low pony is it! You always look good btw. 🫰🏾🫰🏾🫰🏾🫰🏾
The entrepreneurial spirit is great, but the greatest risk is opening businesses that are capital intensive!!
These 5 friends who want to open this rock climbing gym are destined for problems and failure. I hope they spend time thinking this thru.
Bro watched one video on rock climbing and thought wow lets go a quarter million into debt with no experience
Dave: You need more experience operating a gym before starting a gym.
Caller: Ignores the advice, still wanting to jump in.
Does Dave not understand how much stuff costs now? He’s always saying he doesn’t think this cost so and so. Does he even buy groceries himself ? 😂
He’s worth a couple hundred million
I doubt he buys groceries
He owns the building where he does the podcast, I'd say he knows more than you
@@MrJimmy3459 ok
Exactly. My coworker ended up investing about $1 million into a jiu jitsu gym and he didn’t even have to construct rock walls.
The good news here is that these five guys couldn’t ever borrow 200k from a bank
Not a good idea on so many levels.