The old saying, ‘If it ain’t broke, don’t fix it’, is an adage I would normally adhere to, but in an ever-evolving world sticking too close to your well-running business model could mean you miss opportunities when they present themselves, writes Matej Varhalik, CEO and co-founder of SpeedFit.

Although you can’t technically ‘fix’ something that isn’t broken, it turns out you can instead improve on it.

Here are my tips on how to reinvent your business model

Be ready for change

A model that can be improved upon is one that is ready for change. We live in an ever-evolving world and an economy that, in the last year or so, has proven to be volatile at times. Stick too closely to the script in running your current business, and what happens when the conditions change? How easily can your business adapt to new conditions? The truth is, it’s easy to miss opportunities for growth and change when you’re rigid about your business. The key is to see the opportunities before you miss them.

Last year during the height of the pandemic I met a former employee, Amy Hart, and it got me thinking about how we could adapt our existing franchise model to support someone like Amy. Amy started as a client a few years ago when she was looking to rehabilitate after major injury. She did SpeedFit, a low-impact, high-intensity EMS (electronic muscle stimulation) workout, and soon became a devotee. She then became a fantastic studio manager, someone who really understood our brand and shared our values and mission. The next natural step was for her to own a studio. Problem? She didn’t have the capital.

Instead of telling her to forget about joining the network, I told her we could work something out. I wanted the model to be flexible enough to accommodate situations like Amy’s, where we didn’t want to let the ideal candidate go just for the sake of a few dollar signs – we saw her potential.

Solutions to future problems

Amy is not alone; I feel her situation will be a common issue in a post-COVID world. Finances are stretched and lenders are more risk-averse than usual, so even seeking finance could be a problem for potential owners.

We saw this as a problem to be solved: although our overall business is up 76% YoY growth, meaning we didn’t need to do this, I could see the benefits of constantly evolving and trying new things to address the problems we’re likely to encounter in the near future. So, Amy became the first to test our new ‘part-ownership’ model.

In a franchise, the line between franchisor and franchisee is pretty clear. The franchisor helps the franchisee with elements such as finding the right location, fitting out the studio, and providing comprehensive training, in addition to ongoing business and marketing support. The franchisee buys the licence to operate the franchise in exchange for all this and pays the franchisor ongoing fees and royalties for doing so.

What if a potential candidate like Amy couldn’t afford the initial buy-in? We developed the part-ownership model to meet her halfway. As a franchise with company-owned studios, we decided a hybrid might work. It was quite low-risk for us because Amy would still have ‘skin in the game’ and on top of that she would be motivated to run the studio well so she could own all of it. The result? Six months later Amy’s Kotara NSW studio is the number one SpeedFit franchise in the country.

The important part was seeing what the barriers were and then lowering them so we could be as inclusive as possible to potential candidates who do not see any opportunity to own their own business due to the large amount of money usually required.

Invest in people

The final point I want to make is that business models are great for operations but they must also be a way to invest in people. SpeedFit started in 2013 so we’ve had many years to perfect the business model: despite lockdowns and border closures in 2020 we had the best year of performance. The model works.

Through reinventing our model, however, we see a better way to provide a path of empowerment for employees like Amy, and also the numerous people interested in running their own business in the health and wellness space. By lowering the barrier to entry and providing the necessary training and education to help them succeed, we can focus on recruiting the candidates that are best for our brand, not the ones who just happen to have access to capital.

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