Here are 7 tips to help start your own gym.
1. Franchise or Start Fresh
You must prepare well, do your research and get all the help and free advice you can. There’s a need of Proof of Concept. Next, investment in a Gym is a hefty investment. In most cases, you probably would not recover your investment within your first year. Please do the necessary analysis and have a proper business plan with a prudent cash flow analysis before starting a fresh new gym. You’ll also have to consider; To Lease or to Buy? The cost and maintenance of equipment is the third-largest overhead cost you’ll have. Deciding whether to buy or lease equipment depends on your budget and your goals.
2. Software & Marketing
If you happen to start a small fitness center or health club, one thing that you could easily overlook is the need for software to manage club memberships and daily operations. What looks like a simple task of bookkeeping turns into complex jugglery as you start offering multiple packages and membership types. It is better to adapt to software on day one rather than wait for your business to grow to a certain size.
How will the fitness center be marketed? Will it be by way of membership drive or a drop-in rate established? What enticements or services will be used as a marketing tool to draw members from competitors’ fitness clubs or facilities?
There are a range of free and paid software available for the need, so do take a hard look before you begin operations.
3. Area Demographic
Like in any business, you need to figure out to whom you want to cater. Will it be parents who need to work around their children’s school and sports schedules? Will it be professionals who will work out before and after their jobs? Will you be a studio focused on one discipline or several? Your audience will influence where you set up shop.
Research these 5 points to learn about the local demographic
-Total population of an area
-Median household income
-Total population by sex
-Population by age
-Drive time caveat
4. Early Sign Ups
Find out where your community is at and if they need a gym. Asking around is a great idea. And getting a signups list going is probably the best idea. When new gyms open up there are created signup lists & plans. Create prospects before even opening the doors.
Is there access to trained fitness instructors and staff in the community where the fitness center is being established, and if so what are the wage and benefit demands, as well as expectancy of staff in terms of career opportunities? For most fitness companies, the next biggest overhead cost is staff. You want to attract the best teachers. That in turn brings in the most loyal — and best-paying — clients. But paying employee benefits can take a huge chunk of your profit.
Location is key. A gym should be located in an area where the residents have disposable income. Talk to people in the area, see if they are interested and at what price point. Then do a financial analysis based on membership revenues and expected monthly costs. Then make a decision. Where will the fitness center be located, how much square footage will be required, what are the leasehold improvements going to cost, is there good visibility, access, and parking, and is the business located in an area comprised mainly of the target market customers?
The first part of calculating your break-even point is making estimates about certain expenses and revenue. In order to educate your estimates, research the current market of your business. There are plenty of how-to resources to teach you how to make these estimates. The estimates that are needed for a realistic break-even analysis include the following:
Overhead includes your month to month expenses that are pretty constant, such as rent, insurance, utilities, etc.
Sales Revenue refers to the total money from all sales activities that your business will make monthly and annually. Be sure to found your estimate on the volume of business that you realistically expect, rather than on how much revenue is needed for a profit.
Average Gross Profits are the amounts that are left over from each sale, after deducting the direct cost for each particular sale. If a toy costs you $4.00 to sell, and you are selling it for $8.00, your average gross profit is $4.00.
Average Gross Profit Percentages tell what portion of each dollar of your sales income is gross profit. Gross profit percentages are calculated by dividing the average gross profit amount by the average sales price. If your toy gives you an average profit of $4.00 on each toy that you sell for $8.00, you average gross profit percentage is 50%.
These are all great ideas but not the only ones. There is much more than these great 7 points to opening a gym. Please do your research, ask questions and make a smart business plan before jumping in to fast.
Have questions or need some help? Comment below and tell us what your dream gym is or would be.