A small business owner has opened up about the difficulties of managing cashflow in a growing business, after his personal training company Rapid Personal Training entered liquidation yesterday.
Insolvency firm Hogan and Sprowles has been appointed to manage the liquidation of Rapid PT, which employs three full-time staff and 17 contractors, and has seven locations spread across Sydney and Perth. The business has ceased trading.
Rapid PT was established in 2012 by founder Kris Cochrane, who told SmartCompany about the difficulties the business faced when it came to managing growth plans.
“We had big plans and big growth. We expanded into Western Australia and invested into strategies that were, honestly, a gamble,” Cochrane says.
“Things like extra staff, online infrastructure, things that cost money.
“It was a matter of making decisions as a business owner without a great deal of experience, and without a realistic understanding of what would happen if things don’t go the way you want them to.”
While Cochrane says the business was profitable, he blamed the business’ cash position as its weakest link, saying sales performance couldn’t match payments being made.
The experience has been difficult for Cochrane, who says it all “happened so fast”.
“It all happened so fast I didn’t see it coming. I was looking at the sales numbers, and for the first time ever I raised the white flag and said I wouldn’t be able to pull this off,” Cochrane says.
“As an entrepreneur, I’ve probably failed.”
While Cochrane is helping out the liquidators where he can, he says he’s “virtually unemployed” at the moment and hasn’t thought too much about the future.
“Once I feel everything’s been handled appropriately, I’ll think about what I’ll do. I’ll probably stay in the industry, stick with what I’m good at,” he says.
Rapid PT has closed its operations at seven locations, but trainers will keep their jobs after re-contracted to other gyms, Cochrane says.
Rapid PT’s Facebook page has been shut down and the business’s website now displays only the Rapid PT logo.
Cochrane previously featured in SmartCompany’s 2016 Hot 30 Under 30, and at the time spoke about how he got his the personal training business off the ground.
After working as a personal trainer and sleeping in the storeroom of a gym in Sydney, Cochrane employed a team of trainers and built up a database of 150 clients within the first year of operating.
At the time, Cochrane told SmartCompany “You can work your arse off, but go in the wrong direction”.
“You have to aim in the right direction. Education yourself, plan, and then execute,” he said.