HELPFUL INFORMATION FOR YOUR BUSINESS DURING COVID-19

Facebook
Reddit
Twitter
LinkedIn
Digg
Email

Considerations for aspiring gym owners

If you’re passionate about helping people get and stay fit, a gym can be a fantastic business venture. However, many gym owners need help figuring out where to start. 

Opening a new gym is not just about weights and treadmills; it’s about crafting an immersive experience that can transform lives. I’ll take you through a list of crucial items to consider when opening up a new gym to make things go as smoothly as possible.

Two smiling female gym owners wearing workout clothes

The ideal gym location

The old saying in real estate is true: location, location, location. Your new gym’s location can play a huge role in its success (or lack thereof). Specific elements to consider for your gym’s location include:

Demographics: Research the demographics of the area, including age, income levels, and fitness interests of the potential customer base. You want to ensure your gym caters to the local population.

Competition: Analyze the competition in the area. Consider proximity to other gyms and the services they offer. Identify gaps in the market that your gym can fill.

Accessibility: Choose a location with easy access for your target audience. It should have ample parking and be well-connected by public transportation.

Visibility: Select a location with good visibility and signage opportunities to attract potential members.

Zoning and permits: Ensure that the location is zoned for a fitness facility and that you can obtain the necessary permits.

The right building for your gym

Calculate the space needed based on the type of gym you plan to open (e.g., traditional, boutique, CrossFit, yoga studio). In addition to workout areas, make sure you also account for locker rooms, reception, and office space. Additional building considerations include:

Layout: Ensure the layout is conducive to your gym’s flow, with proper ventilation and lighting.

Renovations: Calculate costs for necessary renovations or build-outs to create the ideal gym space

Design: Budget for interior design, including flooring, mirrors, wall paint, and branding.

Equipment: Get quotes to estimate the cost of gym equipment, including cardio machines, weightlifting equipment, accessories, and the cost of shipping/delivery of equipment which can be extremely expensive due to size and weight. If quotes you get for gym equipment do not include the delivery charges, push to get that information upfront or choose a different supplier.  

Amenities: Factor in optional amenities you want, such as showers, saunas, group fitness rooms, a childcare room, a smoothie bar, and/or a retail area to sell merchandise.

Administrative considerations for gym owners

Sorting out all the administrative requirements for a new gym can’t be done in a day. Some administrative tasks include:

Paperwork: You’ll need policies and procedures in place for members as well as for your staff. You’ll need an employment handbook, new hire paperwork, as well as gym rules to post prominently for members, to name a few.

HR: If you’re not ready to add a knowledgeable human resources person to your staff, hiring an HR firm can help ensure you adhere to local and federal regulations and labor laws. The number of labor law posters alone that employers must display can be head-spinning. 

Payroll: Plan for staff salaries, including personal trainers, front desk staff, cleaning crews, and management. Factor in hiring and training costs.

Bookkeeping: Bookkeeping is not just for large, well-established businesses. Every business must track and keep records of income and expenses, both for tax purposes and to have a clear financial picture. If you’re not convinced, check out our post on 3 reasons why bookkeeping is important year-round

Online presence: Create a website and social media accounts for your new gym. Gone are the days when company websites were optional. Ensure your website is mobile-friendly and, if possible, allows people to sign up for memberships. Note: in some states, there are laws mandating that if you allow people to sign up for memberships online, you must also allow them to cancel their membership online. 

Local marketing: Allocate funds for marketing and advertising campaigns to attract members before and after opening. Under the right conditions, a local marketing campaign can get a tremendous number of members signed up before you even open your doors. Consider grand opening promotions and membership incentives. For more advice on this area, check out our blog on 4 ways to attract new gym members

Insurance and legal steps for gym owners

Gyms are a risky business by nature. Thankfully, liability insurance exists to protect you and your assets in case of lawsuits. Don’t settle for the bare minimum state-mandated business insurance. Do some research and consult a professional to determine the right insurance coverage for your business.

Consult with legal professionals to establish contracts, waivers, and membership agreements. You’ll also want to have a relationship with an attorney/law firm in the event of a lawsuit. The most common lawsuits for gyms are based on injuries sustained at the gym. Less common reasons for lawsuits can arise with former employees and the nature of their termination and disputes with membership billing. 

Financial considerations for gym owners

Most new gyms require significant capital, which may be from the owner’s savings, a loan, investors, or a mix of these sources. To come up with a rough budget for your gym, consider the following:

Monthly expenses: In addition to rent, estimate monthly utilities, including electricity, water, gas, phone service, cable or streaming services, and internet. Remember that the cost of monthly expenses, including rent, goes up over time. Your total monthly expenses in year three will probably be higher than they are for the first year.

Upkeep: Budget for cleaning supplies, maintenance, and repairs.

Software: Invest in membership management software for billing, tracking member data, and scheduling classes.

Forecast: Create a comprehensive financial projection that includes revenue, expenses, and break-even analysis for at least the first year.

Safety net: Set aside a contingency fund to cover unexpected expenses or dips in revenue.

Breakeven point: One gym owner we spoke with estimated that it can take up to five years for a new gym to become profitable. Some new gyms become profitable in as little as six months, while others are never profitable. During a November 2020 survey among gym owners in the United States, 68% of gyms that were open between 3 – 5 years were profitable1.  

Compensation: Salary and other owners’ income varies widely for gym owners. The average gym owner in the US earns $86,197 per year, according to ZipRecruiter2. However, until your gym hits the breakeven point, consider paying yourself a modest salary to cover your personal financial needs. If you’re interested in the “Profit First” method, check out Numberwise Book Club: Profit First3.

Time investment for gym owners

Opening and running a gym is not an ideal side hustle. Expect to spend considerable time working in and on your business to get it off the ground and become profitable. 

Most gyms have long operating hours, seven days per week, with some gyms open 24/7. While the business is ramping up and cash flow is limited, gym owners may find themselves working far more than the standard 40 hours per week. 

Bottom Line

Remember that a well-thought-out business plan is crucial. Conduct market research, create a solid budget, and seek professional advice where necessary. A successful gym starts with careful planning, wise decisions, and a commitment to meeting the needs of your members.

1 – Statisa survey data as of November 2020 
2 – ZipRecruiter data on gym owner salary as of December 2023 
3 – While Numberwise firmly agrees with the principle behind Profit First, we do not use the Profit First method. For more details, seriously, check out our post, Book Club: Profit First

More for gym owners / fitness business owners:

Gym marketing: 4 ways to attract new gym members
Gym expenses: 4 tips to reduce costs for your fitness business
Gym revenue: Increase income for your fitness business in these 4 areas

About the Author

Picture of Steve Turk

Steve Turk

Steve Turk, Accountant at Numberwise, is a Xero Certified Advisor and Bill.com Guru. He has been on the Numberwise team for 9 years. Steve was always interested in working with numbers. He loves the Numberwise culture and family-type bonds shared among the team. He also appreciates how the team stays ahead of the curve with technology and continues to work smarter instead of harder. Steve resides with his family just outside of Nashville, TN. He has a wife, 3 children and 2 dogs. He loves reading books, enjoying bourbon and cigars.
SHARE THIS POST
Facebook
Reddit
Twitter
LinkedIn
Digg
Email

More Blogs to Explore...

Leave a Reply

Your email address will not be published. Required fields are marked *

Owl-1-yellow-transparent

Ready to get started?

Stay Informed!

Sign up for our newsletter and stay up-to-date on all things Numberwise.

Name(Required)
This field is for validation purposes and should be left unchanged.

This website uses cookies to ensure you get the best experience on our website.