Have you ever wondered how your local fitness center makes money?
Or do you dream of owning your own gym and want to plan out your sales revenues?
How do local gyms make money?
Local gyms make money from several sources, including selling memberships, providing services such as personal training and selling additional products such as drinks, proteins and equipment as well additional fitness related services including yoga, classes and daycare.
The average gym relies on its clients and members to pay for the gym facilities.
However, a gym’s business model and profitability may involve more than this. Below is an overview of how gyms make money and their various income streams.
1. Membership Fees
According to Healthline, the average cost of a gym membership is $58 per month. However, in cities such as Brooklyn, the monthly spending can go as high as $100. Gym membership fees can also go as low as $10 per month. Most gyms operate on membership models, providing their clients with fixed monthly, bi-annual, or annual rates to utilize gym facilities.
Unfortunately, most gyms that rely solely on membership fees as a revenue source don’t realize impressive returns. It is common for the average person to cancel or bail out of the gym shortly after joining and paying the fee. Reliance on this revenue source requires consistent customers and, ultimately, an alternative revenue source.
2. Group and Personal Training Programs
Personal training packages are the ideal solution and upgrades for those who want more than the average access to gym facilities. Gym personal trainers offer the extra service by customizing training plans to help them achieve maximum results and charge them the extra fee for the extra services.
Group classes are also a better premium alternative, especially for beginners looking to start small. The extra attention that a gym staff/trainer offers clients attracts an extra fee besides the general membership fee.
3. Extra Products and Services
Gyms can provide several extra products and services to their clients—depending on the facilities’ available space and structure—to enhance customers’ experiences and make more sales revenue.
Extra services a gym can provide include daycare, spa, or anything clients would appreciate. On the other hand, some gyms opt to sell branded products, bottled water, gym clothing, or supplements that customers need for their workout programs.
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Are Local Gyms Profitable?
The past two years have been challenging for the fitness industry, with most people opting for indoor and at-home fitness in compliance with the government’s social distance and lockdown directive. This led to a reduction in revenue for most gyms and further verified the need for a great online presence to continue providing fitness services.
However, the industry is thriving again amid the new normal, with gym activities estimated to be somewhere near about 90% of pre-Covid levels. Such activities include online gym classes which contribute to a significant percentage of a gym’s revenue. Evidently, gyms balancing a physical and digital presence realize more sales revenue and net profits than those that strictly rely on a physical presence. The internet also provides an e-commerce opportunity for local gyms to sell additional branded products and make more sales revenue.
Local gyms are profitable subject to certain conditions.
For starters, a local gym with multiple revenue streams in addition to membership fees and personal training can realize more sales revenue and can potentially be more profitable. Unfortunately, simply having different ways to make money doesn’t automatically make a local gym profitable. In fact, this can often lead to extra organization chaos and additional management headaches that may take away from the gym’s core business model, rather than making it stronger.
There is a need for a great customer value proposition, clear unique selling propositions, customer targeting, and supported by excellent financial systems, either by acquiring additional staff or using software such as QuickBooks.
How Much Does a Local Gym Owner Make?
A local gym owner’s earnings depend on several factors, such as:
Gym Size
How many members can a gym facility accommodate at any particular time? A facility’s capacity affects its revenue potential. A large, fully-equipped, and maximized gym facility generates more revenue than a smaller facility largely because it has the capacity to serve more customers.
The Gym’s Business Model
Gym business models vary in type, overhead costs, and potential revenue generation. Different gym models include:
- Conventional health style club
- Weightlifting center
- Cardio studio
- Aerobic studio
- Yoga studio
- Crossfit style
A typical business model may include one or combine more than one of the above to generate more sales revenue for a gym owner.
Reinvesting free cash flow to improve gym marketing, staffing, maintenance and operations
Reinvesting profits into business aspects such as marketing, staffing, advertising, maintenance, and repairs can help the business grow, resulting in more sales revenue and higher profits for a gym owner. Reinvesting may also have added tax benefits.
Consequently, how much can a local gym owner earn?
According to ZipRecruiter, the average annual salary of a gym owner in the US is $65,685. This translates to $31.58 hourly, $1,263 weekly, and $5,474 monthly. According to ZipRecriter, local gym owners can make as much as $224,500 annually, while the lowest may be approximately $10,000.
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Summary of How Do Local Gyms Make Money
Local gyms make money by:
- selling memberships,
- personal training services,
- merchandise, and
- other fitness related services.
Memberships make up the majority of income for most local gyms.
These memberships come in a variety of forms, such as monthly, quarterly, or yearly.
Most gyms also offer discounts for couples, families, or multi-year memberships. Memberships give gym-goers access to all of the gym’s equipment, classes, and other amenities. Gyms also make additional money by charging fees to use certain parts of the gym, such as the pool or racquetball courts.
Personal training services are another great source of income for local gyms. Customers can pay for one-on-one training sessions with certified trainers who can help them reach their fitness goals. Many gyms also offer group training programs which offer more affordable alternatives for those who can’t afford one-on-one training.
Merchandise is another major source of income for local gyms. This can include anything from clothing and accessories to nutritional supplements and protein shakes. Gyms often partner with major brands to offer branded merchandise to their customers. This helps the gym make money and also encourages customers to wear their gym’s logo.
Finally, local gyms can make money from other fitness-related services, such as nutrition counseling, massage therapy, and even spa treatments. These services help the gym diversify their income streams and provide additional value to their members.
In summary, local gyms make money by selling memberships, personal training services, merchandise, and other fitness related services. This helps them generate a steady stream of revenue and allows them to provide their customers with the best possible experience.
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Conclusion: Can a Local Gym Earn More?
Yes, it can. Every business strives to improve certain vital aspects such as sales revenue, gross profit and net income. A local gym with a solid business model and a great marketing plan can increase its sales revenue and net income. Local gym business owners who strive to continually optimize their main source of sales revenue and then stack on new revenue sources can experience great success.
Besides the traditional membership fees, you can offer personal training, extra services, or group classes to bring in additional sales revenue and net income. More importantly, ensure you maximize the available gym space fully and reinvest in your business to make it more accommodating, modern, and attractive. Finally, financial accountability is elemental to helping a business keep track of its Key Performance Indicators (KPIs) including expenses and net profits.
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