Detroit Strong: How Don Jaeger Built a Fitness Business by Putting Community First
Don Jaeger could have spent the summer of 2006 kicking around his hometown of Grosse Pointe Woods, Michigan, training for his final year as a college hockey player. Instead, the 23-year-old decided to put his passions to work and start a business. Jaeger formed a partnership with his strength and conditioning trainer Michael Fox, and together they opened Next Level Health & Fitness in nearby St. Clair Shores, MI. Considering Don’s youth and inexperience, it could have been a disaster. Instead, Next Level was an instant success.
In November 2015, Fox-Jaeger Enterprises and their partners opened the Mack Athletic Complex (aka The MAC), a 40,000+ square foot sports performance and team training center that is helping to revitalize a Detroit neighborhood. In this exclusive Bootstrapper interview, Don Jaeger explains the challenges and triumphs of learning business ownership on the fly, and how he built his success by staying true to his core values.
Credibly: You opened Next Level Health & Fitness before your senior year at SUNY Fredonia — which sounds kind of crazy. Why didn’t you wait until after you finished school to start your business?
What was the original concept behind Next Level? How did you and Mike want it to differentiate it from all the gyms and training centers you’d seen before?
We wanted to provide an alternative to big-box gyms. A lot of these big gyms are 30,000+ square feet, but Next Level is only 7,200 square feet and it’s more of a family-oriented, customer-friendly atmosphere. We’re positioned on one of the major streets in a suburb of Detroit, bordering the city, and the community is very tight-knit. We wanted the facility to feel like your neighborhood bar, where you walk in and everybody knows your name.
Where did you get the money to launch the gym?
We were self-financed through friends and family, which was a huge blessing. Obviously it’s hard for a lot of small businesses to get financing, but we were lucky enough to have a couple of investors who knew us personally, believed in us, and were able to help us get it done. I come from an entrepreneurial family, and my parents were supportive through the entire process. My mother’s parents owned and operated a tool and die shop, and my father worked for himself for over 30 years.
You were 23 years old when you opened Next Level Health & Fitness, and had never run a business before. What part of business ownership required the biggest learning curve?
I think a lot of it is getting the proper systems in place, everything from the simple things like putting together a supplies list and and knowing when to reorder things, to more difficult things like making sure all of your members and clients are being billed properly. The biggest challenge is figuring out how to present yourself differently than your competitors — how to sell yourself so that people choose to do business with you.
When we opened the gym, I was too young and inexperienced to fully understand what I was getting myself into, but at that age, you can make up for it with energy and determination. Back then, we lived and breathed the business and were able to pour ourselves into it completely; both of us have families now and life is a lot different. I would have loved to have the experience and knowledge that I have now, but that’s just the way it goes.
Was it harder or easier than you expected to get people in the door and attract members during your first year? Did your customer growth go according to schedule?
We were actually ahead of schedule. We had a great first year. We got in at a time when the market hadn’t been that saturated with fitness. There weren’t a lot of exercise options at that time, especially in our area. LA Fitness and Powerhouse and Gold’s Gyms hadn’t expanded the way that they have now. There weren’t any Snap Fitness or 24 Hour Fitness places around. So, our timing was good and our location made us a good option for people.
Did you put a general manager in place from the beginning, or were you personally managing the staff and everything else?
Mike I and split the duties; we considered ourselves managing partners. We figured out our strengths and weaknesses to split up what needed to be done, and then we used our other employees to fill in the voids. There wasn’t too much of a science behind it. When you’re running a small business, you are everything. You are the plumber if the toilet gets plugged up, you’re the billing, you’re the accounts receivable, you’re the accounting. We did it all.
Let’s talk about the MAC. At what point did you start thinking about expanding your business to another location?
We recognized a need with the athletes and sports performance clients who were training at Next Level. A lot of times they’d have to drive 30-45 minutes to go to another facility to do their indoor practice, whether it was baseball, soccer, lacrosse, or football. We knew we could provide those guys with strength and conditioning training that’s just as good if not better than anywhere else, but we’re losing their business because they have to go practice at XYZ facility a half hour away.
There wasn’t an indoor sports dome anywhere in our area, so we thought, “Hey, there’s a market here that’s just waiting for something like this.” We knew that if we could put a dome up and provide a gym in the same facility, it would work out for everybody; athletes could train and practice back-to-back. We were fortunate to find a couple other partners, and together we bought a shuttered Detroit public school on 3.2 acres. We demolished the school, redeveloped an administration building on the site, and attached the dome to it.
Mike and I opened a training-only gym inside the complex called Detroit Thrive, where everything is done with a trainer through a program. We also have the Neuromuscular Institute of Michigan as a tenant, and we’re in search of a physical therapy rehab center to add as well.
Redeveloping an old public school is a unique approach. How hard was it to secure that location?
Trying to find space for a dome that is 150 feet wide by 300 feet long in such a heavily developed area was tough, because as soon as you factor in parking spot requirements and all the other things that get you to code for space, zoning, and variances and all that, it was really hard to find a piece of land. Then, we stumbled upon this school that had closed, and it happened to be in an absolutely excellent location. The Detroit Public Schools were looking for somebody to purchase and redevelop it, so we were able to negotiate a deal with them, and we’ve been redeveloping the property ever since.
All of the partners have self-financed the project to an extent. We were able to put together enough to get us through the project, and hopefully within the next year we’ll turn everything over to a bank to get a better rate on the loans. It’s been a big project over the last two years, and it’s been tough at times, but looking at what we’ve accomplished, it’s pretty amazing. The first day we opened was probably the proudest moment for me; I could barely sleep when I got home because I was so excited. A lot of times when you’re opening a new business, you’re doing so much that you forget to sit back and smell the roses.
You mentioned earlier how Next Level Health & Fitness established itself in the local market before all these franchises like LA Fitness and Snap Fitness exploded. Did you ever think about turning Next Level into a franchise?
We did think about that, and ultimately we didn’t feel like expansion would let us stay true to our core values and the relationships we have with our customers. Mike and I grew up in the community, we live in the community, and we felt like if we were to expand and do another location 20 minutes away, the gym wouldn’t have that same sense of community that we bring to it. We just felt that Next Level was something that we were happy with and we didn’t really intend to make it into a franchise.
In terms of marketing, what methods have worked best for you in terms of getting the word out, defining your brand, and attracting customers?
Hands down, our best marketing tool is our members telling their friends and family about the facility. Nobody sells your business better than happy customers, so we try to utilize our members. We do campaigns where you can bring a friend or family member to the gym for free for a week, and if they sign up you get a month free.
One of the common hurdles for people getting into gyms is fear. They’re scared to come in because they think that everybody there is in amazing shape and they’re all on the treadmill for an hour and they’re all lifting these heavy weights, when in reality that couldn’t be further from the truth, especially in a facility like ours. Having someone you know walk you into a facility breaks the ice so much and makes people feel a lot more comfortable.
What causes you the most stress in your daily life as a business owner? Is it angry customers, uncooperative employees, or something else entirely?
That’s an easy one: It’s time commitment. As a business owner, I don’t have a time clock. If I have to stay late because there’s something that needs to get done, it falls on my partner and I’s shoulders. There are a lot of times where we miss time with our friends and our family, and that is by far the toughest thing. The amount of time that you put in makes a 40-hour work week look real nice.
Finally, is there any advice you can give to other entrepreneurs who are thinking of starting their own fitness businesses?
There are a lot of us in that entrepreneurial boat, and I would highly suggest finding a mentor who you can talk to, even another gym owner who is willing to bounce ideas back and forth with you and be a partner in the sense of experience and knowledge.
If you’ve got the passion and you want to work for yourself, it’s great. But understand that when you work for yourself, you will work harder than you ever imagined — and you’ll also feel more proud about what you do than you ever have before.