Love the dose of dopamine and endorphins after a good intense workout? Well, you can start your own gym to fulfill your passion and start a successful business venture. Obviously, you’ll need to learn how to start a gym business. Every year, millions of people join gyms to lose weight or to get shredded.
To make any gym profitable, there are a variety of things that you need to follow. Build an “opening a gym checklist” and keep certain things in mind and you can start a gym business. One great method of starting a gym business except for your love for fitness is profitability. Revenue in the fitness industry is expected to reach US$ 2,150 M in 2021. The industry is growing at an annual growth of 2.68%. The industry is expected to reach a market cap of US$ 2,331 in the next 3-4 years, so this is the right time to jump the wagon. Follow our guide on how to start a gym business and build your business.
Pros and Cons of Starting a Gym Business
Before you pick a pen and paper and start outlining the steps on “how to start a gym business plan”, you need to figure out the advantages and disadvantages. Do your research and figure out how the industry works and what the pros and cons are to start your own gym business?
Pros of a Gym Business:
- If you’re passionate about fitness, then the first benefit of starting your gym business is that you get to work in the fitness industry.
- No need for a large number of employees for your gym as it is fairly easy to maintain. Having fewer employees also saves your money which increases your profit margin.
- The gym industry is growing at a successful annual rate, so the chances of your income staying fairly regular throughout the year is pretty rare.
- You can usually have a huge source of income at the start of the year as people tend to join gyms en masse as part of their New Year’s resolution.
Cons of a Gym Business:
- The costs of starting a gym business are exponentially high so you will need a rather large amount of capital.
- You need a huge space to start your gym business.
- You may need to follow a variety of safety regulations.
- The huge competition in the market makes it harder for you to grow your business as there is no limit of low costing to high costing gyms.
- Long working hours as each client has a different schedule, and your gym may have to be open most part of the day.
What are the Basic Setup Costs for Starting a Gym Business?
To learn how to start a gym business, one of the biggest questions that you need to ask yourself is how much will it cost. Health and fitness industry is a vastly growing industry and opening a gym can be a highly profitable venture but the profits you make are dependent on how much you have to invest initially.
If your question is how to start a gym business with no money, then the simple answer is that you can’t. So the real question here is “how much does it cost to open a gym?”
Building a “How to start a gym business plan” includes asking yourself how much does it cost to start a gym business. On average, the basic setup costs can range from $10,000 to $50,000. Although the cost can exceed based on a variety of factors. Here is a breakdown of the cost of starting your gym business:
- Facility Costs: One of the most common and much-needed expenses is a facility. You need at least a 2000 sq ft space which can cost around $6,000 per month. However, you can cut your cost by choosing a smaller location.
- Gym Equipment: Another major expense of opening your gym are the equipment. A large-scale commercial gym can have an equipment cost of $50,000. There is a variety of equipment needed to start a gym. If you start a small gym, then the equipment will cost you around $10,000.
- Licenses and Permits: You need a variety of licenses and permits for a gym business. The average cost is around $800.
- Employee Salaries: This is another major cost for your gym business. This expense can’t be measured, and the expenses depend on a variety of factors.
- Gym Management Software & Hardware: While you can leave this expense off your initial list, management software and hardware can improve your working experience. The cost can reach up to an average of $2,500 per year.
How Do You Prepare for Launching a Gym Business?
The high setup cost and the extremely competitive nature of the fitness industry make it a tough industry to start your business. There are a variety of generic business development steps that you have to learn to understand how to start a gym business. Following the steps, you can build a successful business venture with ease.
Thorough Market Research
It’s obvious that you can’t build a business without knowing the insides and outsides of the industry. You must learn how to start a gym business by looking at what your competitors are doing. There’s no point in putting your life savings and then watching your business crash. Do your research and learn how to set up a successful business.
Doing thorough market research can help you acquire the best equipment at a lesser cost. Set up your price structure, pick an ideal location, and decide on the type of gym you want to open and so much more. Your “opening a gym checklist” should contain market analysis on top.
Personifying Your Business
Ever crossed a shop or a business that just stuck in your mind because of their catchy name or logo? That’s what you want for your business. Another step in learning how to start a gym business is by choosing a name that attracts your potential customers.
Finding the right business name and then a consequent logo can help your business stand out from the crowd. However, there are a few things that you should keep in mind. Your business name shouldn’t be the same as any other business, it shouldn’t be hard to remember and most importantly it should show what you’re offering. Let’s be honest if you name your gym “Jim’s Bakery” it won’t get the message across. A catchy logo also helps in giving your business identity.
Finding Your Ideal Niche
Your “how to start a gym business plan” should clearly dictate which particular niche market you’re going to target once you’re up and running. Having a clear sense of direction is always good. While the fitness and health industry has a huge market cap and is growing at a steady annual rate, there aren’t a lot of niches. You have a specific set of options and sticking to them is your only option.
Opening a niche-specific gym business can help you get rid of some competition in your area. Some of the most common niches are:
- Commercial Gym
- Professional BodyBuilding Gym
- Crossfit Gym
- Generic Gym
- Women-centric gym
- Male-centric gym
Each niche has its own separate equipment, location, and employee requirement. Having a deeper understanding of what you need to do to succeed in a niche is important. Pick one niche and learn all the inner workings of it, it is a crucial step in learning how to start a gym business.
Deciding on a Target Market
Another important thing you need to decide while learning how to start a gym business is figuring out your target market. A target market is basically figuring out the group of people you’re planning to offer your product and services to. The target market for gyms and fitness centers is pretty small. A lot of factors determine which gym a person will choose to achieve their fitness goals. Once you’ve picked your ideal niche, you need to choose a target market that can help you grow your business.
Some of the most common target markets in the fitness industry are:
- Married middle-aged men
- Ladies between the age group 20-30
- Working-class people aged 18-35
- Old people who need to stay in shape
Deciding on your target market can help you build a future plan. Finding your niche market is crucial for finding the target audience. You can’t expect your gym business to grow if you have no customers. As a gym or a fitness center is a physical service, you can’t target people from other cities. You need to target people in the vicinity of your gym.
Building a Skillset
It’s obvious that if you’re opening a gym, you will be working as a gym trainer. If you are a gym rat, then transforming yourself into a gym trainer will be easy. Apart from a gym trainer, you need to build another skillset as well. Skillsets like accounting, management, human resource management and so much more.
If you don’t have any prior experience, then opening and managing your gym can be tough. The best way to acquire the necessary skill set is by working under any of the gyms in your area. Working in a gym can easily teach you how to be a gym trainer. As for skills like accounting, you can get accounting software or HR software to make things easy for you. If you have the budget, you can find the ones with the right skills.
Procuring Tools and Equipment
A gym is as good as the equipment it uses, obviously, you can’t go ahead and build a gym out of old and outdated equipment. There’s a lot of research involved in finding and picking equipment for your gym. If not done properly, you can end up losing a huge amount of money on equipment that isn’t up to the mark. Learning how to find the right equipment is a part of learning how to start a gym business. Several types of equipment are needed to start a gym and you need to find good sources of equipment.
A simple Google search “Gym equipment providers near me” can offer you thousands of options. You can choose to buy gym equipment online, but we would suggest you find a manufacturer of gym equipment near you. That way, you can examine the quality of products you want in your gym. If you are a gym rat yourself, you would know what kind of equipment is good and which types aren’t.
Setting Up the Price Structure
As mentioned above, there are all kinds of gyms out there ranging in pricing. The pricing can range depending on the type of gym, some common examples are:
- Generic gym ($10-$50 per month)
- Professional bodybuilder gym ($30-$80 per month)
- Commercial gyms ($20-$100)
Deciding on your pricing structure is dependent on a number of factors. You need to consider the location you’re opening the gym in, you can also set your pricing structure based on the quality of equipment you’re offering. If your prices are higher than other gyms in the same locality, people would go to other gyms. You need to do a competitor analysis and set up your price structure. Your price should be cheap enough so new customers keep coming in, and high enough that you can keep earning profits.
Do You Need Office/Space?
This is one of the most common questions people have while starting a new business. If you want to learn how to start a gym business, then you need to be clear on your need for space. A good gym obviously needs to have a good space so your clients can do their exercises without too much hassle.
Your gym also needs to be in a good location, easy to locate and should have sufficient parking space as most people tend to go to the gym with a vehicle. Your gym should also have a separate office space where you can keep the client’s record and manage all the necessary data. As a gym is a physical service, your need for office space is inevitable. Make a list of all the perks you would want your gym to have and you will be able to find a suitable location.
Arranging Funds for Starting Your Business
Starting a gym is highly expensive, there is a lot of initial investment involved. If you have been saving up funds for starting your gym business, then invest it into the business right away. However, if you’re running low on funds, you’ll need to arrange the funds required.
Several sources can help you acquire the funds you need. The most common way is to ask for funds from your friends and family, this way you can arrange the money and not be burdened with an interest rate. If you can’t get the amount you need from your friends and family, then you can approach a bank to get a loan. If you’re having trouble with acquiring the money, then you can always start small and grow your gym business as you start making profits.
How Many Employees Do You Need?
Your “opening a gym business checklist” should cover your need for employees and how many employees you need. An average-sized gym needs at least 2-3 gym trainers as you can’t be everywhere on your own. Also, as an owner, you will be needed to handle the administrative work. You should understand how many employees you need and if you have enough working capital to pay the salaries before you start making a profit.
If you can’t afford a full-time team to help you, you can cut down on your costs by hiring part-time help for your business. Figure out how many employees you actually need and if you need full-time or part-time help. It can go a long way in helping you learn how to start a gym business.
Common Problems Faced in a Gym Business
The gym and fitness industry is highly competitive and setting up your own gym isn’t easy. You need a lot of money as an initial investment, and tons of research is involved. You need to devote a lot of time and dedication to start your gym business. Gyms usually face a lot of foot traffic during New Year’s or during Christmas time. Similarly, there are times, usually during summer or mid of year, gyms face a drastic drop in customers.
Regardless of all this, the industry has a huge market cap and has a huge average profit margin. So with the right steps and by following our guide on “how to start a gym business”, you can build a successful gym business. What are you waiting for then? Start working today and follow your dream.
Conclusion: How to Start a Gym Business?
Opening your gym can feel like an exciting adventure, and the huge market cap makes it enticing too. There are a huge number of steps that you have to follow for building a successful gym business out of nothing, but it can be done. Follow our guide on how to start a gym business and make sure to invest your money smartly so you can make the most out of the money you’re investing.
FAQs:
- Is the gym a good business to start?
The only issue is the requirement of a huge investment, apart from that, starting a gym business is highly profitable. You do need patience in the initial stage, but once the business takes off, it can bring huge amounts of profits.
- How much space is needed for a gym?
It’s common for gyms to be spacious and large in size, but on average, a good gym needs to have more than 1,500 sq. ft.
- Should I buy or lease gym equipment?
The decision relies on how much money you have right now. If you have the money then you can buy the equipment. If you’re running low on money, then leasing gym equipment is a more suitable option.