For many small towns, the local gym is the hub for physical fitness and wellness. It’s also an important staple, literally bringing health-minded community members together.
A thriving small town gym is often the result of a successful opening. And that’s what this article will help you do: properly open a gym in a small town.
You can successfully open a small town gym these 7 ways:
- Clearly identify your target market
- Secure a location within your target area
- Understand your cost structure
- Make realistic sales forecasts and set up your accounting system
- Build your marketing mix and keep it regularly maintained
- Become a local celebrity through PR and guerilla marketing
- Take special care of your house list from the beginning
Notice this list isn’t about obtaining the best equipment nor is it about signing the most expensive lease for a 10,000 square-foot facility.
To open a gym business in a small town, the most important element is to have members. After all, without customers, a gym, even in a big town, won’t last long.
So the first step on our journey to open a gym in a small town is to explore the target market.
Let’s get started.
How to Open Your Local Small Town Gym (7 Critical Steps)
All states have a different formal definition for the official size of a small town. Many small towns are less than 500 and as much as 10,000 before moving into a different category. For our examples, let’s assume a general small town is about 5,000 residents. Regardless of your small town having 500 or 5,000 residents, you still need to get some information and understand what your business landscape looks like.
Here’s the first step.
1. Identify your target market
The first step to opening your gym in a small town is to identify the potential customer base.
Our goal in the beginning is to simply explore the landscape, understand the basic demographics, and get a feel for what this looks like. Here’s some basic questions to identify:
- How many people live in this small town?
- What are the age ranges and the number of people in each?
- How much money does each segment make?
- What does the general health look like of these segments?
- What do people do for activity now?
- How many residential developments are there?
- What does the business environment look like?
Individuals residing within a 3-mile radius of an upper to the middle-class neighborhood is a great place to start as you begin to define your primary target market.
For example, Anytime Fitness is probably the biggest gym franchise business in the United States today with about 2500 locations in operation. You can learn from them when building your small town gym. They offer Anytime Fitness Express locations, which are smaller footprints designed to put a gym in a small town. Their territories are a 4 mile radius and no more than 7,000 residents.
Residents of such a location may be between 25 and 50 in age. Another market to consider is those who work in a business within a 3-mile radius of your gym.
The big goal here is to think about building your gym facility around what the community members can support. This means, if you only have 500 residents to market to, then only a portion of these people will be in your target market. If you can safely forecast that you can build enough value to gain % of this market as an ongoing member to your gym, you can make some educated guesses on the size of location, the services offered, the equipment needed and set some revenue goals.
If your small town has 2,000 residents, you have a far larger target market to consider.
Your small town gym truly starts with the customer in mind.
For more information on how to target new customers, visit:
How do you target new customers (6 simple steps)
2. Secure a location within the target area
When customers are looking for a gym, accessibility and proximity are important considerations. By being strategically and conveniently positioned in a good area, your site provides both of these qualities.
If you choose to operate your small gym business surrounded by a residential neighborhood, residents have an option of dropping by while on their route from or to school or work, or while living their daily lives.
Many successful gyms choose a location next to “anchor”. An anchor is a well known brand such as Lowe’s, McDonalds, Dunkin Donuts, large department stores or grocery stores. This is an excellent strategy that can immediately give you credibility, build your brand and increase walk-in traffic from locals.
If you are in a very small town, you might also consider working very close with the city government, local media and local commercial landlords to find inexpensive warehouse locations where you can develop a spartan-like workout experience for your community. This can be done very inexpensively and serve a wonderful niche in your community, almost instantly making you into a local fitness celebrity giving you all the positive free PR you could want, reducing your advertising expenses to almost nothing
3. Understand your cost structure
As you start your own gym business, you will have two basic costs:
- Start-up costs and
- Operational costs
Your start-up costs will include things such as real estate and design improvements, licenses and fees, equipment, signage and pre-opening marketing.You need to develop a Start up budget for your own gym business. You can get a free template here that you can use as a framework.
How Much Does it Cost to Open a Small Gym? (Free templates)
Second, once you have started your gym business and it is operating, you will need an operating budget. Any accountant can help you set up your books. This will require you to pay careful attention to your sales revenue, gross profit and net income. While not necessary, this is one of the reasons many choose to search for outside funding in order to get operating capital.
These numbers are reliant upon your costs to start the gym, which are your variable costs and your fixed costs, such as payroll, utilities, rent, advertising and insurance. For a sample financial statement of a gym owner and a free template, go here.
Here are some sample costs:
The Cost of Opening a Gym
First, you need to consider the one-time costs versus the continued investments. You must also think about location, business permit fees, and equipment costs. Remember to think about your square-footage. Depending upon your starting budget, you can always grow into bigger spaces over time.
Regardless of your approach, thinking in terms of one-time fees versus continued costs will make it easier to digest.
One-Time Expenses
Here are the most standard one-time costs to open a small town gym.
- Building and location. This price differs depending on where you want your gym located and how big you want the building to be. Will you be providing locker rooms? Showers? Private training rooms?
- License and permits. This can also depend on location. You will need location permits, health and safety permits, and ownership licenses. Expect to spend at least a few hundred dollars to obtain all of the right things.
- Equipment. You can’t have a gym without equipment! This can be a large range depending on what type of gym you want to open. You can spend as little as $10,000 for basic equipment or up to $50,000 for a fully-operating commercial location.
- Technology. There are lots of options here. You will at least need to be online to advertise your local gym and you will need a method to manage, track and communicate with your members and potential members..
Ongoing Expenses
You will have ongoing costs such as electricity and advertising. Here are some of the most standard costs for opening a small town gym.
- Insurance payments. As a fitness facility, you are legally obligated to have insurance for liability. Rates will vary depending on factors and you will have a monthly premium.
- Utilities and supplies. These expenses include electricity, air conditioning, and sanitary stations. You also need cleaning supplies, vacuums and mops. A clean gym is a safe and healthy gym.
- Lease payments. Whether you rent or buy, you will have monthly rent expenses.
- Staff salaries. Employee salaries will be different depending on many factors. In the beginning it may be a one-person show!
- Marketing and advertising. This is core. You can do a lot of PR, community events and guerilla marketing to save money (as should be done regardless of the size of the budget), but you will have website costs, direct mail costs, and other advertising that should be baked into your budget.
- Taxes and licensing. This is very straightforward. Don’t cut corners. Do it right and stay on top of licensing. The tax status at local and state levels is determined by where your gym is located. For detailed tax registration requirements, contact your local and state tax agency.
For an excellent understanding about setting up your costs structure as compared to the best in the business, Anytime Fitness, it is highly suggested that you review this brief tutorial:
How do you compare franchise opportunities? (+examples)
4. Make realistic sales forecasts and build your accounting system
For best results, it is a wise idea to consult with an experienced accountant andor tax attorney to ensure your business is set up properly before you get your small gym started.
Onward.
Here’s a simple income statement for a typical small gym that you can use for fun and education as you talk to your accountant. Use this as a helpful tool to help you get started and play with the numbers to see what might be possible.
This is also a helpful exercise to see what the largest expenses are and how small changes in your customer counts and your average sales revenue per customer can make a large impact on your sales revenue, your gross income and your net income.
Go here to download the google sheet document and you can save it as your own. The documents are titled: 1) Gym Financial Analysis and Estimated Small Gym Start Up costs for a gym. They are located in this article for you to download.
5. Build your marketing mix and keep it regularly maintained
Based on your target market, in the beginning your small town gym probably doesn’t need ultra-modern workout equipment, the most current fitness programs nor techno-gadgets. It doesn’t even need to have extra staff on hand at all times to help members.
But your gym does need a crystal clear value proposition delivered to your ideal customer base. But keep in mind, your ideal customer may already be someone else’s customer, so you need to be better at delivering your unique messages.
You do this through proper execution of the Marketing Mix (a.k.a., 4 P’s of Marketing).
Also known as “the 4 P’s of marketing”, the marketing mix is no different than a recipe. Each ingredient is an important part of the marketing plan and is composed of these 4 elements:
- Your Product or Services – What exactly are you delivering to the marketplace?
- Your Promotion – What are you communicating?
- Your Pricing – What is the price you are selling your product or service for?
- Your Location – Where will you deliver your promotions?
This is your formula.
To open your small gym successfully, there are two core activities you need to kick your gym off to a great start:
- Your pre-opening and
- Your grand opening
Your pre-opening is an often overlooked part of a successful gym business.
And it can be one of the most fun, too.
Your pre-opening advertising is a set of activities that will literally get the phone ringing before your gym is open. It’s also a great opportunity to start accepting customers and generating sales revenue early on.
Begin marketing before launching your gym to ensure that you sell gym memberships to pay costs such as rent, design, and equipment.
For more information about developing your Marketing Mix, go here:
What is the marketing mix and why is it important? | The 4 P’s of marketing
6. Become a local celebrity through PR and guerilla marketing
PR is used in marketing to communicate positive news, a story or language to an audience that best fits your target market.
And being the owner of a local gym gives you an immediate unfair advantage over any competitors. You can use this to your advantage.
Your main goal here is to befriend the editors of the local newspaper, business news, TV, radio, online influencers and anybody that has a local voice. Take them to lunch, ask them questions, and listen.
This will be one of the most valuable uses of your time.
Additionally, get good at guerilla marketing.
As its name suggests, guerilla marketing uses an element of surprise, customer experience and customer engagement to promote products to the right audience. The methods used are nontraditional and fun and creative in most cases, relying upon personal interactions — all while using a favorably smaller budget compared to traditional marketing approaches.
Go here for more information about using PR to promote your gym:
How public relations (PR) is used in marketing (+examples)
7. Take special care of your customer list from the beginning
This often overlooked step is possibly the most important step, 2nd only to clearly identifying your target market.
That’s because, the success of your gym is almost totally dependent upon:
- Gaining a customer, and
- Keeping a customer
After all, nothing else really matters.
Right from the start up phase of your gym, you need to carefully capture and maintain your customer list. Commonly referred to as the “House List”, this list is the most important list your gym owns.
Here’s a simple framework for organizing your list:
- Current customers
- Past customers
- Future customers
This again, will give you a competitive advantage over the big brands.
As you can see, there is a lot more to opening a small town gym than most fitness enthusiasts think.
This is one reason why choosing to be part of a successful fitness franchise network is a good choice for many as there are a lot of important details that go into a small town gym beyond just the location and equipment.
Many gym businesses fail early because they cut corners in their market research and planning phase. When you carefully develop these 7 steps, you will be well on your way to owning your own successful small town gym business!