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People often joke about retail therapy as a response to COVID, so when I’m asked, “what’s the strangest thing you bought in 2020?” I have to say, “a rival business”. It’s not something I actively set out to do, but timing, combined with an existing plan to expand the brand across the east coast of Australia, opened up an opportunity to acquire several competitive sites that I couldn’t refuse.
Business for sale
Buying out one of your closest competitors is something that takes considerable thought, and during a pandemic when your own business is subject to lockdowns and challenging times, it is even harder.
We had several things to ponder with the first part of the decision concerning the locations. Did we want to buy the Melbourne studios and take over the lease of where they were located? Because we are based in Perth, we are well established in our home city but didn’t have any studios in Melbourne, so buying something that already had a presence actually worked in our favour. The seller had a very similar setup to us and targeted a slightly more premium market than we do, so the studios were the right size and the locations excellent. So far, so good.
The second consideration was the existing staff. We saw this as not only an opportunity to bring on talent that was already trained in the equipment, but a way to help them retain their jobs during an uncertain time. Once we understood that these team members were a cultural fit for us, we were happy to have them on board. We also ran an online 6 week “Isolation Motivation” challenge to keep staff and clients engaged and supported during the extended lockdown.
And finally, we were really proud that we were able to maintain access to EMS for the Melbourne market. There are very few EMS services in Melbourne offering the same quality of experience as we are and we were pleased to be able to uphold that in a pandemic.
We matched the important details, ran the numbers and finalised the sale.
It’s one thing to transfer the assets, but it’s quite another to account for their value in terms of your business’ objectives. We detailed the key differences between SpeedFit and the acquired business: we offered locations in multiple states which makes it very handy for Speedfit members to keep training when travelling for work or play. They also didn’t have complementary services like nutrition classes or body compositions, so we added value for their existing clientele in this acquisition, which is always a nice way to help the transition.
The digital transition happened in stages. We co-branded the other business with SpeedFit on social media channels and their website, and then in the next phase, everything of theirs now leads to SpeedFit. We also created new assets where they didn’t have a presence.
It was helpful that the staff already knew how to operate EMS equipment so when we retrained them it was less about the technical aspects and more about how to onboard clients and help them achieve their goals the SpeedFit way. One difficulty was that we couldn’t meet them in person because of the border closures between Western Australia and Victoria, so we supplemented the online training with a lot of Zoom calls to better integrate them into the SpeedFit family. What worked in our favour was having a well-developed set of systems and processes which ensured we could get up and running without being there in person. Having said that as soon as I could physically make the trip to Melbourne I did, and it was worth the two weeks in quarantine at home over Christmas when I returned.
Despite the various challenges there’s no denying the second Melbourne lockdown gave us time to do the transition properly, and then time to inform the clients what was happening so that they would expect the changes when they turned up for their next session.
Out of a global pandemic came an unusual opportunity and we took it. Buying out a competitor is not always the best idea – we have evaluated several similar offers that we’ve rejected – but when you can find something that offers you a series of benefits like location, clientele and interest, and you can keep people employed, then it’s a good deal that shouldn’t be missed.