If you’re one of the many people who are obsessed with health and fitness, then you may have considered a gym as a potential business idea. If you owned your own gym, you could do what you love every day and get in a workout when you weren’t too busy. But it’s not easy to open a gym, and it’s even harder to keep it open. Figure out if you should open a gym by learning about the pros and cons of starting a small business, along with what it takes to get started.
Benefits of Owning a Gym
The number-one benefit of owning a gym is that you get to work in the fitness industry. For those who are passionate about fitness, this is a significant benefit, and passion is what you need to build a successful gym that’s all your own. You typically don’t need a large number of employees at a gym, which saves you money. For a small- to medium-sized gym, you could get away with having one employee to work the front desk. While people tend to sign up at gyms en masse after Jan. 1, there are no major up-and-down periods for gyms throughout the year. This means there’s less likelihood of your business’ monthly income suddenly dropping.
Drawbacks of Owning a Gym
The costs and competition that come with opening a gym are two of the biggest drawbacks. Gyms require quite a bit of capital to launch, as you need to rent or buy a large enough space and then purchase enough high-quality equipment to keep your clients satisfied. You need to pay for insurance every month, and you can also expect a high power bill for heating or cooling your gym. With so many gyms already open, it’s difficult to stand out. The market is particularly saturated with low-cost gyms between $10 and $40 per month and mid-range gyms between $40 and $60 per month. In 2014 alone, 581 low-cost gyms opened in Canada. Only 10 mid-range gyms opened, but 278 closed due to the high number already open. While your gym may not require many employees, it does need to be open most of the day to accommodate the schedules of your clients. Some people work out early in the morning before work, some on their lunch breaks, and others in the early or late evening.
Putting Together a Business Plan
If you’re serious about starting a gym, the first thing you want to do is create a detailed business plan. This isn’t something you whip up in an hour. You need to analyze the market and research how much your gym is going to cost, both in terms of startup costs and monthly operating expenses. When you create your business plan, you also need to figure out what’s going to make your gym different than the competition. Ideally, you want your gym to offer something that other gyms in your area don’t offer. Maybe there’s a large senior population, but no gyms that cater to seniors, or perhaps instead of a gym with free weights and workout machines, you can open a gym that offers classes in a sport or recreational activity. Climbing gyms grew 15% in 2014. Mixed martial arts gyms are also on the rise. Having a business plan isn’t just helpful, it’s a necessity if you plan on obtaining a business loan. Any reputable lender is going to check your business plan to determine if your gym is a sound investment.
Preparing to Open a Gym
Before you start looking at property and funding options, you should spend at least a few months preparing. During this time, you have three goals:
- Gathering information from gym owners
- Saving money
- Building a client base
You can get a better idea of what to expect when you own a gym by contacting people who have experience in the industry. Send emails to gym owners requesting to talk to them on the phone. Prepare a few questions related to opening and managing a gym. When you interview them, listen and take notes. For most people, the startup costs of opening a gym require a business loan, but you should still live as frugally as possible and save up money to reduce the amount you need to borrow. While you can and should bring in clients with a grand opening, you also want to have a client base prepared before you launch your gym to ensure you’re making money the moment your doors open. Spread the word about your gym before it opens and get as many people to commit as you can. Make no mistake about it, running a gym is a difficult task. Startup costs can be high, there’s plenty of competition, and you may not make much money for years. With careful, patient planning and effective client-recruiting before you open, your gym has a much better chance of success.