If you’re considering setting up your own gym business, read our comprehensive guide before taking the plunge to learn about the benefits, potential pit falls and all things to factor into your business plan.
WHAT KIND OF GYM DO YOU WANT TO OPEN?
The first decision you want to make is what kind of gym do you want to open. Consider the following:
Personal Training Studio
These tend to be smaller with an emphasis on one to one training. You could limit the number of members to ensure the gym doesn’t become too busy at peak times and members could have one on one sessions with a trainer to get the most out of their exercise regime.
Boutique Fitness Studio
As with a PT studio, boutique gyms are smaller in size and typically offer an intimate feel with an emphasis on just one or two elements of fitness For example, they may specialize in spin classes.
This would be a commercial gym that you would invest in but under an already established brand. For example; Golds Gym or F45. For this you would need to invest a certain amount of money to get the gym off the ground. Amounts can vary depending on the gym brand as do levels of support.
The benefit of this is that you essentially piggy back off an already well known gym name. The downsides could be that you may be limited as to what equipment you can invest in thereby removing an element of control as to how you manage your new gym business. Also, the market is quite saturated with gym chains all of whom offer low cost memberships but lack that community feel and tend to offer very standard equipment.
This is a fully kitted gym with a relatively decent number of machines on offer to your members. You would create your own gym brand, logo and manage the entire process.
WILL YOU OFFER A SPECIFIC NICHE?
For example, will your gym focus on bodybuilders and powerlifters or could you be wanting to target the crossfit community?
Depending on what your answer is, will of course impact the equipment you need to invest in. For a powerlifting gym you’ll want to consider equipment such as weight lifting platforms, squat racks and calibrated plates. On the other hand, for a crossfit gym it will be more functional equipment and custom made rigs.
If you want a more ‘general’ gym then you’ll want to offer a broad range of equipment allowing for users to easily obtain a full body workout. This would typically require a larger premises to accommodate all the equipment.
WHERE WILL YOU BASE YOUR NEW GYM?
Once you’ve decided on what gym you would like to open you’ll then need to think about location. Consider the following points:
How big a space will you need? It’s surprising how much room you’ll need for a fully kitted out gym so be sure to think about what kit you plan on having and make sure that the space allows for it all.
Will you cap the membership numbers? Again, this would depend on the size of your gym. Gyms are typically busier during peak times of before 8am and after 5pm. If you allow a large number of people to sign up, will you have the space to accommodate them all at peak times and also the equipment.
For example, if you only have one treadmill and several people wanting to use it a peak time, this could be frustrating for members resulting in them defecting to one of your competitors.
Do you want a central location?
A town centre location could be ideal if you will reach out to potential members who can train straight after work. If the premises is within easy walking reach of a large number of offices etc. you could look to offer corporate memberships to drum up interest.
An important thing to think about is parking and accessibility. Will your premises have enough parking space to accommodate members, especially at peak times and if they are not within walking distance.
Centrally located premises can commonly cost more due to a higher footfall but may be lacking on the all important parking.
Another important point, is that of where will any competitors be located?
If you find the seemingly perfect premises in an ideal location but there is a chain gym just 5 minutes away you’ll want to think about if you can incentivize the members at that gym to leave and join your new gym.
If you fill it with the same equipment, you can only really compete on price and this is never a good idea and you’ll never know if your competitor can undercut you!
WRITING A GYM BUSINESS PLAN
You’ll need a business plan if you are planning on obtaining a bank loan to help get your new business off the ground. Banks and other financial institutes will want to see that you have done your homework before they’ll consider lending you money.
Be sure to include things such as your goals and any financial targets along with how you will market the gym in order to gain new members. A typical business plan would offer the following information:
- An Executive Summary – this is a brief overview of what your whole business plan will comprise.
- A description of your business.
- A competitor analysis. You could point out where your new gym will point and reference where you competitors. It would also be a good idea to note why you will be a better business than your competitor.
- Strategy and implementation. Here you could include a timeline from start up to where you see the business in 5 years. You’ll also need to include how you plan on getting to that 5 year point.
- Management Team – list a breakdown of staffing requirements.
- Financial Plan and forecast – considering your strategy, here you would note down business forecasts based on membership numbers, prices etc.
START UP COSTS
- This will form part of your business plan but will need to be noted before its submission.
- Premises – will you rent or buy and if renting what are the lease stipulations. Do the premises need planning permissions, for example change of use.
- Modifications to Premises – if your new location was previously a gym it could be much easier but if not, you may need to look at things such as male and female toilets, shower facilities and even a protein bar or café should this be something you would like to implement.
- Business Insurance – this is a legal requirements and include insurance such as public liability and insurance for the equipment.
- Registering your business – will you register as a limited company, sole trader or are you going in with a partner.
- Signage for the premises – once you’ve settled on your gym name and logo you’ll want decent external signage created.
- Fitness Certifications – do you or your staff require any personal training certifications?
- IT System – you’ll need a decent IT system for running your business and this could stretch to a system that allows members to scan in and out and ensures memberships are paid up.
- Staff Uniforms – will you be wanting to order in some branded clothing to help distinguish members from your staff. This is also a good branding tool.
- Gym Equipment – likely to be one of the most expensive investments (if not the most). Look at what equipment your competitors offer and try and offer something different to appeal to new members. It can help to look at financing of gym equipment which can provide benefits to your new business
- Marketing Costs – think about how you plan on reaching your potential new customers.
A number of the above costs will be one off only but there are also going to ongoing costs such as the following:
- Rental of premises
- Staff Wages
- Insurance (this is usually annual)
- Utility bills such as water and electricity
- Equipment maintenance – you could look at an ongoing contract with a gym fit out company
- General costs such as cleaning suppliers, stationery etc.
GYM EQUIPMENT AND LAYOUT
Equipment for your new gym is going to vary in price and depend on what you plan on purchasing. For example; selectorised equipment will be more expensive than plate loaded with imports from China being cheaper than locally made equipment.
As we explained above, the equipment you choose could help to secure members. If you are able to offer equipment that is better in quality and less common than that of your nearby competitors, this is something worth shouting about and could encourage member sign ups.
Some gym equipment providers offer bespoke branding and colours for equipment. Adding your logo to equipment is very good for helping to strengthen your new gym brand.
When it comes to the layout, you should be able to obtain drawings for your new premises showing the dimensions, this will help you to ensure you have a) enough equipment and b) make sure that it all fits comfortably.
Some equipment providers can offer a service whereby they can provide a drawing showing your new gym with the kit set up. This will help you to visualize how you see your new facility.
Don’t forget to think about any mirrors and flooring. You’ll likely need to get contractors in for this so it would be worth obtaining quotes from a few suppliers. Some equipment providers can offer full turn-key solutions so can price up equipment, floor, mirrors and even installation.
TIMELINE TO OPENING DAY
Once you have chosen your premises you’ll want to work on a timeline towards your open day. Factor in things such as any internal and external works, creating new shower facilities through to general decorating.
Once any building works have been completed, you’ll want to get any contractors in to fit mirrors, sanitary ware and flooring.
Depending on who you choose as your equipment supplier you’ll want to understand any lead times. Sometimes, an importer could be out of stock of certain machines and it can take several months to arrive into the UK. Alternatively, a local manufacturer could be busy and if they make equipment to order, can carry lead times of anywhere up to 16 weeks, so you’ll want to get your order in to be sure that equipment arrives in time for your open day. Be sure to communicate your open day with the equipment provider so they can factor this in and manage your expectations, as some may not be able to meet your timelines. The equipment should be the last thing to go into your gym.
The staff you employ could make or break your new gym so you’ll want to have a careful selection process in mind before you begin interviewing. Think about things such as their qualifications, experience and of course their personality.
Whilst the building works are taking place and the equipment is on order, you’ll want to put together a marketing plan for how to generate new members. Ideal promotional tools could include the following:
Create a leaflet, ideally showing your gyms unique selling point (equipment, location, etc). This kind of promotion is very cost effective and geographically targeted.
Social Media Advertising
Make sure your website is set up for this and is also mobile friendly. In many cases, more than 50% of visitors to websites access them through their mobile phones. Set up specific campaigns on social media channels and be sure to only target those within a certain radius of your gym. There is little point in promoting a gym in London to someone who lives in Bristol!
This again could work for a local radio station and can be very cost effective. However, it does lack the visual impact and can also be subject to poor attentiveness.
Many areas often post local publications which include business directories. Make sure to be included in the directory and prior to opening your gym, it would be worth finding out if there are any advertising opportunities.
Hold an Open Day
This can be a fantastic way of encouraging immediate member signs up. They get the opportunity to view the equipment on offer, meet you and your staff and understand why your gym is the best local gym.
To incentivize people to sign up during your open day, you could offer them a reduced monthly membership for a certain period, say 3 months or maybe a free PT session.
GROWING YOUR BUSINESS
Overtime, you’ll want to continue to encourage more people to join your gym. Ask current members for quotes on why they joined and what they like best and, with their permission, use these quotes as promotional material. You could make a social media post showing a before and after of a member sharing their successful results due to training at your gym.
To retain your current members, it’s a good idea to communicate with them regularly. Send out newsletters showing member weight loss success stories, sponsor members who may be doing something such as a 10K run for charity. Also think about something like a suggestion box for potential gym improvements and new equipment. This will help your members to feel valued.
With a proper plan in place and by considering all the above, opening and running a gym can be a very rewarding business not only from a financial standpoint but also you are helping the local community to stay fit and healthy.