How this Melbourne dad founded a multimillion-dollar fitness franchise

IN 2009, Aaron Smith was broke, out of work and living with his parents. Today, just a handful of years later, he’s worth millions.

TODAY, Aaron Smith is the picture of success, with a multimillion-dollar fitness franchise to his name.

But just a few years ago in 2009, it was a very different story.

Back then he had just returned from a three-year stint in London — $20,000 in debt, totally broke and with no steady job on the horizon.

He was living with his parents in Melbourne, driving his dad’s car and working odd jobs to try and pay back what he owed — but he had an ambitious plan up his sleeve.

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Mr Smith had worked as a head trainer at a pilates studio in the English capital and had noticed a new, dynamic form of pilates taking the city by storm which he thought would be a perfect fit for Melbourne.

With this business venture still a dream in the back of his mind, Mr Smith focused on getting on top of his debts by working in hospitality, but after just a few weeks he’d had enough.

“I lasted three weeks in gaming and bar work trying to pay my debt off — but I thought, ‘I can’t handle this’,” Mr Smith said.

“I had no money to my name … but I wanted to start my own business, so I sat my old man down and sold him the dream I saw in London.”

Mr Smith then created his own version of the British workout, blending traditional pilates with cardio and endurance training for a high intensity workout and dubbing it KX.

With his father agreeing to act as guarantor, Mr Smith managed to secure a $129,000 loan and

in February 2010, his first studio opened.

Since then it has grown into a 50-studio, $20 million international franchise — but it wasn’t always smooth sailing.

On day one, not a single person walked through the door.

Revenue was slow to build, and for the first 12 to 18 months, Mr Smith paid himself just $200 a week, after working from dawn until late at night every day.

He stopped drinking and socialising with friends altogether because he simply couldn’t afford to, and decided if the business failed, he would head to Colorado to be a “ski bum” for a year to recover.

“It was a hard slog for the first 12 months; the average studio across the network now has a revenue of around $40,000 a month, but in the first month I made $2000, then $4000 and then $6000,” he told news.com.au.

Aaron Smith paid himself just $200 a week in the early days. Picture: Supplied

“Mum was helping me wash the towels and Dad stayed up to meet me when I got home, to be there for me when I wanted to quit.

“Nobody knows what stress is until financial stress hits them. Every day I had the fear of failure in my head. I had to convince myself it was OK to fail, but I was sh*tting myself on a daily basis.”

But slowly, things started to turn around.

Aside from hard work, the 35-year-old said he started at the right time, just when boutique franchises were starting to take off and before the market became too saturated.

The father-of-two also capitalised on the discount group buying platform craze, offering deals for customers on sites such as Scoopon and Groupon.

And he joined several professional networking groups for entrepreneurs, such as The Entourage, which he credits with teaching him the business ropes.

It was at an Entourage talk about exit strategies years ago that Mr Smith came up with his ultimate, “reach for the stars” goal of having 50 franchises and 10 company studios by 2018 to 2020.

Now the business is on track to reach that once impossible-seeming goal within this financial year.

Mr Smith’s next five-year goal is to open up to 150 studios across Australia and expand into several southeast Asian countries.

He also plans to step down as CEO soon to make way for someone with the qualifications and expertise to help him achieve his lofty ambition.

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