So you love to lift heavy...
Meal prepping is your favorite Sunday afternoon activity…
And you’ve always considered opening your own gym.
But you’ve got some questions.
Is a gym business profitable?
How much does it cost to open a gym?
Can a small gym compete with the big chains?
All of these questions are valid, and in this seven step guide to starting a gym business in 2021, I’m going to cover all of them.
I’m Ippei, a proverbial jedi master at all things online business, passive income, and local lead generation.
And I’m passionate about seeing small business owners succeed and thrive.
So let’s get started with how to start a gym:
How to Start a Gym Business in 2021
So You Want to Start a Gym in 2021? Here's What You Should Know:
If you’re going to open a gym business, then you’re going to need more than a warehouse with a couple of weight racks. To start a successful gym, you’ll need to write a business plan, find the perfect location, invest in equipment, and learn how to market your gym.
Start Up Costs
While this list is not a comprehensive compilation of every you need to start a gym business, it provides a snapshot of what you need to add into your business plan.
Annual Revenue of Established Gym Business
According to Wholesale RDX Sports the average annual revenue of this kind of business is: $152,000
Profit Margins of Established Gym Business
According to IHRSA the average Profit margin of this kind of business is: 12.7%
Quick Start Checklist:
1. Write a Business Plan
Undertaking the process of starting your own gym is not something to jump into flippantly!
Even if you already have personal training certifications, and an immense knowledge base within the fitness industry…
Opening even a small gym requires strategy and planning if you want to create a financially successful business.
Which is why writing a business plan for your gym business should be the first step that you tackle in this entrepreneurship process.
While writing a gym business plan isn’t as exciting or glamorous as purchasing a shiny new set of squat racks…
It will be the backbone and support system of your business moving forward.
And as someone who probably knows the value of taking things slow, and building core strength physically in your fitness journey…
Think of your business plan in the same way.
Without a strong core, AKA a strong business plan, the rest of your business is going to suffer.
If the idea of sitting down to write your business plan is a bit intimidating…
Use this basic business plan outline as a guide to get you started:
Basic Things to Include in a Business Plan:
Plus, remember that your business plan is there for YOU.
It’s not about fancy business terminology, or creating a super lengthy document.
Write your business plan in clear, actionable steps.
That way you can actively use your business plan to refer back to often.
It will remind you of your long term goals, both financially and practically, and keep you focused on the next steps that are in front of you.
2. Identify Your Strengths and Find a Niche
The fitness area is a wide and diverse spectrum, and chances are…
You already know where you fit in that spectrum.
Most small, privately owned gyms specialize in a specific fitness niche.
This is primarily because the owners are passionate about that particular area of the fitness world, and want to share that passion with others.
Being true to yourself is so important in business.
What you care about, you will work hard for.
And even more than that, others will be able to see that level of authenticity, and will be drawn to it.
Don’t try to do it all and serve every possible type of client just because you need members for your gym!
Ask yourself what you are genuinely passionate about, and then build your gym around those niche areas.
Some Examples of Fitness Niches Are:
I’m guessing that a few of these options are already jumping out to you based on your own personal fitness passions and interests…
So run with that!
If you’re just trying to attract as many people as possible…
Then you might as well just give up now since Planet Fitness is probably only five to ten minutes down the road from you…
And they’ve basically already monopolized the generic, big-box gym playing field.
The key to success when starting a privately owned gym is to specialize in a niche that will attract a unique set of fitness junkies that share your same or similar fitness goals and interests.
3. Choosing the Perfect Location
When it comes to starting your own gym…
Your location is everything.
While this might be high on your “to-do” list…
Don’t rush finding the right location for your gym business.
Jumping into a lease on a space that isn’t a good fit for your gym business will only hurt you in the long run…
So take your time and make sure you ask yourself the right questions before committing to a location.
The first thing you will need to compare are the pros and cons of a retail space vs a commercial space for your gym.
A retail space is going to be more expensive per square foot, but it will have greater visibility.
And typically, a commercial space is going to be much larger and more affordable, with the trade off of decreased visibility and traffic.
Look out for structural problems!
Your building needs to have floors that are suited for receiving the consistent impact of dropping heavy weights.
What are the lease terms regarding music?
Will you be allowed to blast your tunes as loudly as you’re hoping in your gym if you’re located in a retail area?
How is the parking situation?
You’ll need to consider the amount of monthly memberships that you are aiming for, and compare this with the availability and size of your parking.
Your parking situation should be able to accommodate for your gym at max capacity.
Are there enough bathrooms to accommodate your members?
Will you need showers installed?
And don’t be afraid to negotiate your lease terms.
It’s so much easier to speak up in the beginning, than to deal with breaking or violating the terms of your lease later on because you didn’t think it would be that big a deal.
When you are renting a space, the terms should be mutually beneficial for both you and the landlord.
If something isn’t going to work well for the gym model that you have in mind, say something!
This will result in either one of two things:
If you find yourself in a situation where your landlord is unwilling to renegotiate the terms of the lease…
Don’t sweat it.
(No workout puns intended.)
This is the easier route when it comes to discovering that a potential location simply isn’t the right fit for your gym than if you moved forward only to run into problems later!
4. Create a Value Ladder
So what the heck is a value ladder?
I’m glad you asked.
Your gym’s value ladder will be the different services that you offer to your members mapped out in ascending order of value and price point.
Essentially, most gyms don’t just offer a flat rate fee for everyone…
They have different monthly or yearly membership packages that range in price and offer different amenities and services.
Then your clients are free to select the membership that fits their needs and specific fitness goals.
Now obviously, from your perspective as the business owner…
You want people to choose your highest package point!
Which is why creating a strategic value ladder is so important.
A value ladder is sometimes referred to as a sales ladder…
But I think that calling it a sales ladder fails to highlight the most important aspect of this concept.
Yes, it’s about sales…
But more importantly, it’s about the value you are providing people.
You can’t trick people into spending more money (or at least you shouldn’t be doing this.)
However, you can provide a level of value that incentivizes people to spend more.
For Example:
Your base price might offer 24/7 access to the gym, but the next level up allows them to participate in 2 group classes per week, and the membership above that adds in a monthly check in with a personal trainer. Then your ultimate package might offer weekly personal training sessions at a discounted rate that saves them money compared to the basic membership level and booking a personal trainer separately. And so on and so forth.
The goal is to show people that their money will provide them with a greater overall value if they choose to invest in your various membership levels.
5. Purchase Your Equipment
Obviously you can’t run a gym without the equipment…
And after the lease of your space, investing in equipment is probably going to be the most expensive part about opening a gym business.
Fortunately, if you are operating on a tight budget, there are some creative ways to save on your equipment investment.
For starters, you can purchase gym equipment used.
The great thing about workout equipment is that if it has been well maintained, it tends to hold its value really well.
So you not only can you find used equipment at a more affordable price than brand new, but you will also be able to sell it later on down the road if and when you decide to upgrade to newer equipment.
Another great option for sourcing affordable gym equipment is to go the salvaged or DIY route.
There is alot of basic workout equipment that you can actually build yourself!
Or better yet…
Head to a local scrap yard and collect a set of tires for strength training tire flip exercises!
Throw in a set of ropes and some blocks, and you’ve got yourself a unique strength building setup!
If you can spring for some new equipment however, there are so many great wholesale resources for gym equipment.
Depending on the style of gym that you will be opening, the equipment that you will need to purchase can vary greatly.
Some basic pieces of workout and fitness studio equipment that you should consider purchasing are:
6. Marketing Your Gym
As much as I wish I could tell you that “if you build it, they will come” applies to your gym business…
I can’t.
Because it doesn’t.
The common problem that applies to essentially every business out there is finding new clients.
We actually teach business owners how to sustainably generate new leads locally for their businesses with minimal effort…
And we can do the same for your fitness gym!
If you’re interested in setting up a lead generation strategy for your gym business, click here to learn more.
No matter how great your gym setup is, and how much work you’ve put into creating the best fitness studio around…
It won’t matter if you don’t back that up with a strong marketing strategy.
If people don’t know your gym is there, or they simply don’t know anything about your business…
Then all your hard work will be for nothing.
Which is why you should be marketing your gym from day one.
And no, I don’t mean grand opening day one.
I mean, from the moment you sign a lease all the way through the process of getting your gym ready for business.
Start sharing your gym journey via social media, and create excitement within your local community about the business that you are opening!
In addition to posting on platforms like Instagram and Facebook…
Build out a website for your gym business.
When people want more information about what your fitness studio will have to offer the community, your website will be an invaluable resource on the different memberships that you have…
As well as the types of classes and training opportunities that will be a part of your gym when it opens.
There are lots of great options for building a beautiful and user friendly website, even if you don’t have any graphic design inclinations!
Some of my favorite template based website builders are:
Plus, having a website for your business will play a huge role in helping your business rank well within Google.
Which brings me to my next point…
Setting up a Google My Business page!
Having a GMB page for your gym business will not only help your website rank well, but it will help people to find your business more easily…
And it will boost your business’s local visibility within Google and Google Maps!
All of which equals more potential business for you.
The best part is that setting up a GMB page for your gym is completely free.
All you have to do is wait for a postcard to arrive in the mail with your passcode, and you’ll be ready to rock and roll!
7. Outsourcing and Hiring Staff
While it might be reasonable to run your gym all by yourself when you are first starting out…
This isn’t going to be a sustainable option for long!
So when you start to feel overwhelmed…
Take the hint that your brain is giving you, and start outsourcing and hiring staff.
My number one recommendation when it comes to outsourcing is to pass on the bookkeeping and accounting portions of your business to a professional.
Whether you choose to hire a personal bookkeeper, or you invest in an online bookkeeping service…
Dealing with your own business accounting systems probably isn’t in your primary set of skills, and even if it is, your business really needs your attention elsewhere.
By outsourcing the heavy workload of bookkeeping, you will be able to use that time more efficiently….
By pouring it back into marketing, or customer satisfaction strategies, or wherever else your business might be lacking!
Once you have taken this step, if you are still overwhelmed by the duties of staffing your gym as a solo operation…
As well as offering personal training sessions and classes…
It’s time to hire some staff members!
Whether that’s just a couple part time employees to handle the front desk and onboarding new members…
Or hiring a team of personal trainers to help you run the gym, train clients, and lead classes:
Having a staff that you can rely on will greatly improve the quality and efficiency of your business operations.
Pros and Cons
of starting a t-shirt business
Pros
For many aspiring entrepreneurs, one of the greatest draws to launching a business is the freedom to set your own schedule. There’s no boss to dictate your day, or look over your shoulder… You are in control of your time. This can be both freeing, and stressful. But for most small business owners, it is one of the most gratifying aspects of being self employed.
The concept of a gym is a straightforward business model. The gym business thrives on monthly memberships, new year’s resolutions, cancellation penalties, classes, and private coaching. Because this business model is so well established, it will take a large portion of the guesswork out of the equation when it comes to launching your own business for the first time.
Need I say more? If you’re already a workout junkie, having a gym you’ve designed yourself to work out in for free… Is a pretty sweet deal!
Because our society is becoming more and more healthy conscious and image conscious, having a monthly gym membership is standard for many people. This will work in your favor, as the health and fitness industry is thriving right now, and not everyone loves going to a chain-name gym.
Cons
Despite the thriving fitness industry, the profit margins are relatively low. By the time you build your gym space and outfit it with bathrooms, showers, and equipment, the minimal monthly membership fees don’t go as far as you thought towards paying rent… Not to mention earning you a paycheck and a return on your investment.
If you have any visions of earning steady passive income from your gym business… I encourage you to lay those aside. Your income as a gym company will be directly linked to your hours. While owning your own gym business can eventually lead to consistent passive income, that is a long way down the road.
Due to the low profit margins of owning a gym, the return on investment timeline is a lengthy one. At least two years in most cases. There is only so much that people will pay for a monthly membership, and even if you supplement this with classes and extra perks… There is an inevitable ceiling on how much you can bring in a month.
Another major roadblock to starting your own gym is that the big-name gym chains have a reputation already built for themselves. You’ll be the new kid on the block, and it will take a lot of hard work and targeted marketing to acquire your own clients.
Starting a Gym Business Can Be Profitable, If You Know This First:
Any business can theoretically be profitable…
If they have one thing: leads.
Without new business coming in, a business is going to fail.
It doesn’t matter if that business is an amazing crossfit gym, or a company selling unicorn horns.
If you don’t have new customers and clients, you can’t keep the doors open.
And this is an age old problem that has been faced by every business owner who has gone before you!
Trust me.
But you are in the right place, my friend.
We happen to specialize in equipping local business owners with the skill of online lead generation.
In fact, when I left my typical 9-5 job over six years ago, I tried everything from drop shipping to affiliate marketing…
But it was local lead generation for small businesses that changed everything for me.
It took me from barely being able to pay my bills, to making over 50K per month in less than five years!
And the skill of generating leads for your business online is something that anyone can learn.
Including you.
And the best part is that once you’ve done the initial due diligence, you can sit back and focus on running your gym…
Instead of getting new clients.
Because the lead generation model we can teach you will be practically self sustaining.
So if you want to learn more about how lead generation can change the way you approach your business, then click here for more information.
