How to Build a $362K/Year Business Working 8 Hours a Week

This business can make $362,000/Year with high margins and requires only a few hours a week to operate. It could also be built to be sold. Interested? Read below.

The Business Opportunity

Running is extremely popular. Combining an outdoor activity like running with the opportunity for social interaction and the feeling of “belonging” creates a big financial opportunity.

The Opportunity: A Local Run Club

So, what is a run club? A run club is a group of people who run together. They typically meet at a common location on the weekends or during the week and run together. Often, they finish the run and eat at a local brewery or restaurant and continue the social interactions. These clubs are a great opportunity to meet like minded people who value running, outdoors, and socialize with new people.

Run clubs are about creating a social environment around the common hobby of running. People come for the running, they stay for the friendships and sense of belonging.

The concept is simple. Run, make friends and socialize, eat great food after.

So how does somebody start this and why is it a good business? Great questions.

How to Get Started

Most people who are interested in starting a run club already run, or know other people who do. The first step is to reach out to friends and family and ask if they would be interested in the idea. If you have friends who will help run the club (get it?) that would be helpful. Next, name the run club. If I lived in Charleston South Carolina, I’d name it “Run Charleston”, or something like that. You get the point. You can make a website and social media accounts next, but don’t get carried away yet. Then, schedule the next months upcoming runs and promote them to the public. Pick starting and ending points, distances, and make sure the roads or sidewalks can support the people.

Initial Marketing and Promotion

You want to target people who will be interested. So, talk to local running supply stores, gyms, etc. to see if they will let you place flyers, signs, or QR codes about the first upcoming run. It’s important to incentivize runners to join initially. Talk with local breweries or restaurants to discuss a potential deal for your runners after the first run as an incentive for runners to participate.

Have the brewery place your flyer where everybody can see it to incentivize their customers to join. Maybe they could send out an email to their email list for you? Ask local newsletters, publications, event boards, etc. to post about the run club and the first run (again it has to be compelling and a great offer). Ask your friends and family to invite other friends to come to the first event.

Choose the route ahead of time. Coordinate with the restaurant or brewery. Make sure that the run start time is posted on social media and your friends and family know the start time and location. Choose a location that is centralized and easy to get to with plenty of parking. Make the run easy and beginner friendly.

At the first event meetup, have a sign up sheet and gather everybody’s email. You should aim for at least 50 people to show up to the first one. You can create a basic logo on Canva for social media but don’t get carried away with it yet. Focus first on getting people to come and figuring out the logistical basics. Then you can worry about designing a great logo, websites, etc.

How do I grow after starting? What about the money?

Marketing and Growth After Starting

Record the first run and subsequent runs and post shorts and videos on Facebook and Instagram. Make sure to include how much fun it is, how popular it is, all the cool merch (when you have it), how everybody is making friends, and the after party at the local brewery or restaurant.

Use content from the actual runs to inspire others and leave the call to action to join the next weeks run. Continue to use social media content to grow. Email your list about upcoming runs and encourage them every chance you get to invite their friends and family members. Tag current runners in the posts so they share it.

Most new runners should come from word of mouth referrals from existing runners, free content posted to social media, and free advertising through local events and newsletters etc. There is no need to run paid ads until you have revenue coming in. Once there is revenue, you can run paid ads if you know your cost of acquisition (CAC), and Lifetime Value (LTV) of each member. The best way to grow is free.

Building A Brand

Initially, the objective should be to get the club off the ground, form a consistent running schedule with consistent show rates, and to grow the club members. Attempting to monetize too early will slow growth. It’s best to quickly accumulate members and size, then monetize later once there is stability, consistency ,and best practices. The members should know what to expect, they should have fun, and it should be a consistently great experience. That is the brand. Build it. Then, monetize it.

So, how do we monetize it?

Monetizing The Run Club

There are a couple of great ways to do this.

1. Membership Fees

2. Sponsorships from local businesses

3. Sell Merchandise

4. Sell Advertisement spaces on weekly email newsletter

5. Social media endorsements

6. Affiliate product links

We are only going to discuss 1, 2, and 4. Use all 6 methods to make a killing.

After several weeks of operating the run club and attending the local brewery (and giving them lots of business), options open up. You can meet with the brewery and offer them the opportunity to sponsor the run club. This would mean putting their name on all of the merch you sell to your members. If you haven’t already, at this point design a professional logo and use it on all social media.

The restaurant could either pay you, or they could offer steep discounts (50%) to all members who eat there after the run on Saturdays (or whenever you do the weekend run). Read more about why this is awesome below.

Part of building the brand will include having your runners wear merchandise or gear that has your logo or name on it. Nick Bare has “Go One More” running hats that are a great example.

Once there are enough runners, offer a paid membership plan where each runner gets an awesome running shirt, a hat, etc. Make sure it has the brewery logo on there as well when appropriate. Don’t spring this on them. Leading up to this launhc, sprinkle in whispers of merch in development that is about to drop in the weekly emails. Create suspense and desire. Make sure they know that memberships and merch sales are what will allow you to continue this awesome club. If you build a strong enough brand, they will be more than happy to support it, because it will be their brand. Their Run Club.

Then, drop the merch and offer it as an official member deal. The deal includes 50% off at the brewery after the run and all the merchandise (make them pre order or register).

This makes financial sense because runners immediately save the membership fee when they eat afterwards. New runners don’t have to pay to be a member, so friends of friends can still participate, but they don’t get any merch, and they don’t get any discounts on food after. If they are going to eat after, it makes sense to become a member, get the merchandise, and get a discount on food.

Otherwise runners spend the same amount on food and get none of the benefits. The brewery gets great advertising, loyal customers every week (volume negates discount losses). Then, after the initial fee, charge a $15 monthly recurring fee. People will pay to be a part of the club, especially if their friends are involved, they get fit doing it, and they save the same amount of money on food.

What They Pay: $75 New Member Fee, $15/month recurring Membership Dues
What They Get: Shirt, hat, Etc, 50% off restaurant after runs (you could totally add other discounts to running stores etc for an even better offer)
Key concept: Make this offer so good they would be stupid to say no. That applies to the restaurant, sponsors, and runners.

• If a runner went to the brewery every Saturday each month (4 per month), and spent $30 on a meal, that would be $120 /month.

• If you save them 50%, they save $60 a month on food.

• They have to pay $75 to join, and $15 a month, they earn that back in savings almost after one month plus all the awesome merch they get.

• The offer has to be so good they would be stupid to say no.

Financials

Lets get nitty gritty about how this business can make a ton of cash, and how you as the owner can keep most of it.

• New Member Fee: $75

• Cost of Merch: $20

• Profit Per New Member: $55

• Monthly Recurring Fee: $15

• Newsletter Ad Revenue: $20 per 1000 emails → 52 emails per year
  

The chart above outlines the path to huge financial returns. Half the trick is growing the run club large enough and fast enough to monetize it well. The other half of the trick is building a brand people associate with where they want to support it.

Once you reach 250 regular runners, you can begin monetizing the operation through the Member Merch launch and recurring revenue. The expenses will be relatively low and most of the revenue could be used to grow the club through better content creation, paid ads, giveaways, etc.

This is a great business anybody can start. It has relatively low overhead, effort involved, and can scale extremely well. It has multiple sources of revenue options and ways to monetize the brand. This business could also be sold for several multiples of revenue once you start to replace yourself as the operating leader (scheduling runs, leading runs, etc).

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