Strong Cash Flow - But This Margin Is a Problemsmart_display

This fitness studio in Tampa, Florida is listed at $299K, generating about $850K in revenue and $157K in cash flow.

At first glance, this looks like a strong deal. Low price, solid revenue, and healthy cash flow for a business this size.

And when you run the numbers, it mostly holds up.

Deal Snapshot

Let’s break it down using a standard SBA-style scenario.

Financing Overview

After debt, you’re left with about $111K per year.

That’s strong for a deal at this price point.

Where This Gets Interesting

The valuation actually looks clean.

• Fair pricing: 2.03x multiple, right in line with industry.
• Low revenue multiple: 0.35x vs ~0.65x average.
• High DSCR: Plenty of room to service debt.
• Fast payback: Strong return relative to upfront cash.

This is exactly what a lot of buyers are looking for on paper.

The Real Issue

The margin is doing all the damage here.

• Low profitability: 18% vs ~32% industry average.
• Cost pressure: Likely high rent, payroll, or inefficient operations.
• Limited pricing power: Harder to raise prices in competitive fitness markets.
• Fragile cash flow: Small margin changes can hit profits quickly.

You’re making money - but you’re working a lot harder for it than you should be.

Risk Profile

The industry has stabilized, but it’s not risk-free.

Default rates peaked around 3.4% in 2020 and have since dropped to under 1%.

That recovery is a good sign - but fitness businesses are still sensitive to churn, competition, and local demand shifts.

Who This Is For

This deal works - but only if you know how to fix what’s underneath.

• Operators: Someone actively managing costs and performance.
• Fitness insiders: Buyers who understand retention and pricing.
• Optimizers: Someone who can improve margins quickly.

If you can’t improve margins, you’re capped.

BizHub Verdict

This deal scores an 8.0 / 10.

Strong cash flow, fair pricing, and excellent financing metrics.

But the low margin is the weak point - and if you ignore it, this deal will disappoint.

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