Quality gyms are in great demand, and for many segments of the health and fitness industry, the target market’s disposable income is also great — making for an ideal combination for business success.
However, the gym sector has been devastated by recent events, a questionable economy, and unfortunately, many failed business ventures.
How do I start my own gym business?
To start a gym business, the most important element is to identify a target market within a geographic location that has enough potential customers for your fitness business. Once identified, the next steps include: 1) securing a location, 2) obtaining local licenses and permits, 3) real estate and design improvements, 4) gaining insurance and 5) securing the necessary equipment.
To start your own gym business in the highly competitive fitness market, you must set yourself apart by developing a clear value proposition supported by a great product or service, solid customer service and an excellent customer experience.
Let’s explore nine of the key factors to consider as you start your own gym business:
1. Being aware of market trends
The gym industry is rapidly changing. New training methods, business models, and cutting-edge fitness sciences are discovered regularly.
Staying healthy, losing weight, increasing muscle strength, sport specific training, developing strength and endurance, anti-aging, body composition, building community and enhancing overall physical fitness are some major motivations for joining a gym.
Additionally, new opportunities such as socializing, motivation and accountability, team building and group exercise has become a big priority for many gym go-ers. The fitness business has been revolutionized as a result of this literal cultural shift since many consumers now place a higher value on the gym environment, leading to a better customer experience. To learn more about how to do this and conduct proper market research, visit: 8 market research strategies used by marketing professionals.
2. Identifying the demographics of your target market
Individuals residing within a 3-5 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. Residents of such a location may be between 25 and 44 in age. Another market to consider is those who work in a business within a 3-5 mile radius of your gym.
You might also narrow your location focus even more by targeting a smaller area, like a 1- or 2-mile radius, this could help you achieve superior strategic outcomes, particularly as you start to build your customer base. For more information on how to target new customers, visit: How do you target new customers (6 simple steps).
3. Selecting a strategic location
When customers are looking for a gym, accessibility and proximity are important considerations. By being strategically and conveniently positioned in a dynamic and rapidly rising area, your site provides both of these qualities.
Because you have chosen to operate your gym business surrounded by a robust 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. In addition, a good location for your gym business will have easy access on and off the area’s main roads and or highways.
Many successful organizations choose a location with a prominent “anchor”. An anchor is a well known brand that has a large and active customer base such as Home Depot, Lowe’s, Starbucks, Whole Foods, 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.
An excellent strategy to leverage the success of these big brands is to use low cost / high value strategies of Guerrilla Marketing. To learn more, visit: How do you use Guerrilla Marketing?
4. Choosing appropriate supporting services based on your Customer Value Proposition
Your job as a successful gym owner is to 1) Gain a customer and 2) Keep a customer. Really nothing else matters.
And once you have acquired a customer, it is crucial that you regularly innovate new products and services that your customers place a high value on.
When communicated properly, your customers will appreciate extra care and personal attention, in addition to a higher service level that will set you apart from the competition. This alone will give you a competitive advantage over many fitness franchises and gym businesses.
Your gym doesn’t necessarily 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).
Once you have established the core value that is most valued by customer base, you just need to meet the bare-bones basic requirements that other facilities meet in order to keep your customers coming back, such as a safe and clean gym, a modern enough facility, functioning equipment, competent training personnel, polite customer service, member check in and check out, etc.
5. Creating a budget
As you start your own gym business, you will have two basic costs: 1. Start-up costs and 2. 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 will 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.
Second, once you have started your gym business and it is operating, you will need an operating budget. Your accountant will help you set up your books. This will require you to pay careful attention to your sales revenue, gross profit and net income. These numbers are reliant upon your costs, 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.
6. Being aware of your competition
Keeping tabs on your competition is extremely important. Not just because you are competing with them for an increase in sales, but because your competition can help you keep track of what the industry is doing.
As you keep an eye on your competition, keep it simple. It doesn’t have to be complicated. You could keep a folder on your computer named: “Competition”, and make subfolders with the name of each competitor. Once a month you could invest a few minutes and see what kind of promotions they are doing, what price points, services, bundles, events, new offerings, etc.
You should even call them and “shop them” to see how they are answering their phone, write down their phone scripts (all good businesses have a careful and deliberate inbound telephone script).
Your job is to be at least a little better in every way than your competition. It’s not hard because very very few businesses even try. You can do it!
7. Ensure proper 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.
Then, and for best results, in addition to a quality accountant, it is a wise idea to consult with a legit, experienced tax attorney to ensure you are set up properly.
8. Acquiring modern-enough gym equipment
Of course gym equipment is highly important. It doesn’t have to be the most cutting-edge functional fitness machines, but it does have to be clean, safe and working at all times.
There are plenty of resources you can go to find quality equipment. Also remember, the gym equipment you choose is directly related to your ideal customer base.
If you are planning on only working with 18-25 year old tennis athletes who are coming to you to increase their speed and explosiveness as it relates to playing for college or professional tennis, your gym equipment needs are much different than a 60 year old CEO who lives in a very high cost of living neighborhood.
This comes back to the Customer Value Proposition you have chosen to compete on.
9. Pre-opening advertising for your gym business
This is quite possibly the most important portion of building success quickly.
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 business is open. It’s also a great opportunity to start accepting customers and generating sales revenue early on. In fact, this can help you start to develop some important customer feedback and marketing and business analytics.
Begin marketing before launching your gym to ensure that you sell gym memberships to pay costs such as rent, design, and equipment.
This is literally the process where you start to implement the first rule of marketing and begin to gauge the success of your own gym business.
As you can see, there is a lot more to opening a gym than meets the eye.
Many gym businesses fail early because they cut corners in their market research and planning phase. When you carefully develop these 9 steps, you will be well on your way to owning your own successful gym business!