Opening a Gym

[buccm09]

Excuse me if this isn't the proper section for this post. I'm currently active in the army and when I get out I want to open my own gym. I'm looking for any suggestions from anyone who has or has knowledge in running a gym. What should I expect when starting up...etc?

[WolfBeast]

You have to factor in cost of equipment, rental space, electric/water bills, paying employees, insurance.

I know around here a few gyms have closed down, once planet fitness moved into town. They couldnt compete with the low prices that PF had, and lost too many members so they had to close the doors.

[Voltri]

Excuse me if this isn't the proper section for this post. I'm currently active in the army and when I get out I want to open my own gym. I'm looking for any suggestions from anyone who has or has knowledge in running a gym. What should I expect when starting up...etc?

Start with this question: Why would / should someone go to your gym?

[WoofieNugget]

Take my advice - don't. You can't compete with big box gyms and shouldn't even try. Your best bet if you want to open a place is a small private PT studio or a CrossFit box. Mostly because they both allow low overhead and not too much equipment.

Leasing a space depending where you live is up to $10k a month (and that's for 4000 square feet in any large town/city), renovations, then equipment depending on what you purchase can be 50k alone just for cardio equipment (roughly 10-15 pieces), and that's without machines or anything else. And also without insurance, employees, internet, furniture, etc, etc, etc.

If you're young and have a good education from the army then feel free to go into physical fitness but being a gym owner is a losing proposition. Coming from someone who has worked in a couple that have had to shut down. Sorry to burst your bubble.

[Partyrocking]

I would not start off opening your own gym. Get some experience working in a gym first. Learn as much as you can about the industry inside and out before you commit hundreds of thousands of dollars. You may want to consider training out of your basement first and building up a clientele without all of the overhead of leasing a space.

[RamsdenF]

The wrong mindset is being displayed by some other posters. Mainly Woofie and Wolfbeast.

They talk about price/profit/competing/etc. Why is the first topic of conversation? Because the fitness industry has been dragged down to low intelligence thinking in terms of providing a service. PRICE PRICE PRICE PROFIT PROFIT PRICE blah blah....


The real question is....what is your vision? Voltri is 100% correct when he poses the question "Why would someone go to your gym?". I would argue, "price" shouldnt even be listed in the top 3. Our industry is so overwhelmed with maximizing profits that we have resorted to such tactics as "lengthy contracts", "paying trainers 15% of the fee", etc. Price is just but one factor.


Planet Fitness and other large chain gyms are absolutely horrible it terms of a service/product. They do well based solely on price. These are not the clients you would want to attract anyways. You want people that ask "what do I get" before they ask "how much is it". Those big chain gyms are atrocious and everyone complains about them because their are not that many alternatives because all competitors focus on "price" and worry about "profit".

Do not get discouraged by others. Research, plan and weigh all options.

[Moe4Babylon]

The wrong mindset is being displayed by some other posters. Mainly Woofie and Wolfbeast.

They talk about price/profit/competing/etc. Why is the first topic of conversation? Because the fitness industry has been dragged down to low intelligence thinking in terms of providing a service. PRICE PRICE PRICE PROFIT PROFIT PRICE blah blah....


The real question is....what is your vision? Voltri is 100% correct when he poses the question "Why would someone go to your gym?". I would argue, "price" shouldnt even be listed in the top 3. Our industry is so overwhelmed with maximizing profits that we have resorted to such tactics as "lengthy contracts", "paying trainers 15% of the fee", etc. Price is just but one factor.


Planet Fitness and other large chain gyms are absolutely horrible it terms of a service/product. They do well based solely on price. These are not the clients you would want to attract anyways. You want people that ask "what do I get" before they ask "how much is it". Those big chain gyms are atrocious and everyone complains about them because their are not that many alternatives because all competitors focus on "price" and worry about "profit".

Do not get discouraged by others. Research, plan and weigh all options.

I completely agree, I am not knowledgeable in the are of owning a gym, but when I chose the gym I'm at price was the last thing on mind. There's a gym 5 minutes away from mine at literally 1/2 the price yet I still went with mine. Have a large space. A good layout for equipment where everything's ordered. And a have a wide variety eg. Olympique lifting area cross fit area, boxing area etc.
If you can provide that people will come

[KyleAaron]

There may be some confusion of terms here. I believe that by "gym", woofie means "big box gym" like Fitness First, etc, while Ramsden means, "anywhere you go to work out."

If you want to run a big box gym with 1,000-5,000 members, it will be really tough to compete with the big chains. For most of their customers, price is the main issue - the quality of the training service is irrelevant to them since they won't be using it, their fee is to them just equipment rental. So the cheapest guy wins.

If you want to run a PT studio with 30-50 people, or a small training gym (like Crossfit) with 100-300 people, then price is not the main issue - people want quality training and atmosphere, and they expect to pay for it. Not the cheapest but the best guy wins.

So... same word, but maybe different meanings. It's important to make these distinctions, they're very different kinds of businesses requiring very different setup, staffing, marketing and so on.

[RamsdenF]

There may be some confusion of terms here. I believe that by "gym", woofie means "big box gym" like Fitness First, etc, while Ramsden means, "anywhere you go to work out."

If you want to run a big box gym with 1,000-5,000 members, it will be really tough to compete with the big chains. For most of their customers, price is the main issue - the quality of the training service is irrelevant to them since they won't be using it, their fee is to them just equipment rental. So the cheapest guy wins.

If you want to run a PT studio with 30-50 people, or a small training gym (like Crossfit) with 100-300 people, then price is not the main issue - people want quality training and atmosphere, and they expect to pay for it. Not the cheapest but the best guy wins.

So... same word, but maybe different meanings. It's important to make these distinctions, they're very different kinds of businesses requiring very different setup, staffing, marketing and so on.

This is a very accurate posting.

Most gyms fail because they don't define their goals or market. You have to know whether you are trying to attract quantity or quality.

[Derek2010]

If you want to open a gym, talk to Ramsden. Tons of experience opening gyms and he is very educated.

[WoofieNugget]

If you want to open a gym, talk to Ramsden. Tons of experience opening gyms and he is very educated.

Opening gyms? He runs a PT company going to people's homes. I don't think he's ever opened a gym in his life or run a business for more than the few years he's been a trainer. Correct me if I'm wrong of course.

As for the discussion, people get into business to make money - if you think otherwise then I'd love to hear it. The membership gym model is a losing proposition in terms of profits. Like Kyle said (and I was trying to say in my initial post) the profitable models are smaller boxes or private PT studios.

My studio is 3000 square feet with change rooms and showers and decent equipment. I rent the space to other trainers, which is how I pay the overhead and reinvest in new stuff, and then use my own PT business as my income. Basically, if you open a place you want to find a way to make the overhead disappear and then generate a bit of profit for emergencies and any additional staff or amenities.

[rockangel]

This is a good discussion.

A few years ago, a group of people asked me to open a gym in my hometown. It is a very small town, pop 2000, but is situated a short drive from major towns/cities so there is competition, just not less than a 15 - 20 minute drive.


I think when you look into opening any business, but especially a gym, you do need to identify your market/niche AND look at P&L. The gym business is tough, it has cycles (which we are about to enter)... the first few months of getting a gym open are both the toughest and easiest.

Tough to get it set up, but IME once the gym is open, people will come just because its new. That doesn't mean they will stay.

I have read studies that said that most gym memberships are canceled within the first 3 months, with "did not use" being the number one reason.

So I really don't get why people are saying "don't worry about the money".... since you need to be able to pay the bills to keep the place running plus make a living off any profits (profits don't have to be huge but do need to match up to the living standards you desire). Otherwise, why are you in business if you cant keep the place open and have money to live on???

I have worked at a gym where the management/owners where a complete mess, overhead was 15k a month and they barely brought in 5k a month.... had issues with paying staff (which is why I quit, not getting paid for months sucks), pissed off customers by randomly canceling classes and shutting down the gym at random hours (because they could not afford to pay).... trust me... money does count for something for running a business.

I'm not saying don't do it, but I think you need a lot more research into it before you commit yourself to the idea. Perhaps start with writing a proper business plan, which will require you to do a ton of research and you will need it anyways.

I have been working with 2 gyms from the ground up... the first I am still with since 2012, and the other is the above one I mentioned and they are close to going out of business within 18 months of opening. They have an amazing facility in an amazing location (which is what attracted me in the first place) but it has been so horribly managed.

[KyleAaron]

I worked for 4 years in the YMCA in 3 different gyms and a council-run community gym and was a very successful personal trainer. For the last year or so I've run my own moderately successful garage gym. By "moderate" success I mean I make as much or more money as I did working for others, but not so much that I can expand beyond the garage without taking some financial risks. I have before me KPI and budget reports from 5 community and 4 commercial gyms with at least 2,000 members each (I'm friends with the managers and have my own sources) and also several industry reports for an overview. So that's the basis of what I'm saying.

In Australia, the big box gyms have gone backwards or stagnated, and the new money has gone mainly to 24hr gyms but also a bit to small training gyms.

Anytime, Jetts and Snap together make up 36% of industry income, they're all 24hr gyms.
Fitness First, Goodlife and Genesis are together 34%, these are the traditional big box gyms.
Fernwood and Curves are women-only gyms and make up about 8%.
The other 22% is a mixture of independent and council-run gyms. Less than 5% is PT studios, crossfit gyms and so on.
Mobile trainers, bootcamps in parks and so on, they're just too small to even be measured in a nationwide survey. Ramsden with his in-home stuff and me with my garage gym, we're nothing, really. We're an accounting error.

In 2010-11 Fitness First earned $342 million, in 2014-15 $220 million. In the same period Anytime went from $26 to $233 million, Jetts $43 to $150 million, and so on. Overall industry revenue in that period went from $1,159 to $1,349 million. So there is extra money floating around, but it's not going to the big box gyms. It's the 24hr and training gyms, and also a bit to the women-only gyms (Curves has shrunk but Fernwood has grown much more).

Some gyms are trying to make up for this by having their own version of a training gym, like the YMCA has got "Adrenaline." Mostly these are dismal failures since people go to somewhere like Crossfit for better coaching and for community. As much as we like to rubbish Crossfit coaches, even the dumbest Crossfit coach will generally be smarter than the typical big box gym PT - they can at least coach a below-parallel squat, and know that effort is required in the gym. And you can have community much more easily in a place with 100-300 members than a place with 1,000-5,000 members. So the copies have just fizzled.

The stangation or failure of big box gym chains actually makes it tougher for someone who wants to open their own independent one, since you're competing against industry giants in a shrinking market, and as it's a mature market those big boxes are already everywhere. It's like opening a burger joint, just about wherever you are you'll be near a McDs, and they will out-advertise you and can afford to make offers like "30 days for free".

The average community gym is actually making a slight loss, 2% or so. Mostly this is because they can - the local council or YMCA or whoever will bail them out, and the secureness of public sector and NGO jobs at management level gives them no performance incentive. So they spend more than they have, usually unwisely. The increased spending is NOT on staff wages or training, it's on equipment (power racks, barbells, sled tracks) and programmes (like the Adrenaline Crossfit copy mentioned above) and of course more marketing to try to make up for falling market share.

The commercial gyms are making a small profit (about 3-5%). The 24hr franchises are all over the place, depending on how clued-in the owner is, but generally do very well. Part of the reason for their growth is because it's trendy, every yuppie and his dog is opening one - and never having set foot in a gym before doesn't stop him. This is pretty similar to the way cafes were 10-20 years ago. So they open quick and close quick.

This is probably more true of the training gyms, like crossfit. It's hard to find a place that's been open for more than 2 years, but if you do, you'll find the owner has 2-3 former members who have now opened places of their own. There's a big turnover here, and anyone looking to open their own place can get secondhand gym gear cheap - not much treadmills and bikes, but lots of barbells and plates and kettlebells and so on.

Like the person who wants to open a restaurant, you can't compete with the big chains on price unless you have a lot of cash behind you (it's about $1.5 million to open a Fitness First, though one guy spent $12 million - and crashed). So as a restaurant you compete on quality of food and service and "family feel". As I said above about Crossfit, good coaching and community.

Of course, it's not easy to become a good trainer/coach, but I'd say it's easier than finding a few million bucks so you can compete with the big boys in town. So this is why we make the recommendation to have a small training gym. It's more income and less hassle than mobile PT, but easier to get into and survive than a big box gym.

Of course if all you want to do is make money, pick a 24hr franchise. But we're assuming you actually want to train some people - at least for now.

But either way generally I do NOT recommend a newbie trainer open their own business, any more than an apprentice chef should open their own restaurant. Work for someone else for a few years, getting a feel for training people and the industry generally. Then you'll have a clearer idea of what you can and should do.

Thomas Plummer talks a lot about this stuff, look him up.

[Partyrocking]

But either way generally I do NOT recommend a newbie trainer open their own business, any more than an apprentice chef should open their own restaurant. Work for someone else for a few years, getting a feel for training people and the industry generally. Then you'll have a clearer idea of what you can and should do.

This is basically what I was trying to say. Way too many people take their life savings or a second mortgage on their house to open a business without the proper experience just to lose it all and have to go move in with mommy (if they're lucky). Being a successful owner isn't just sitting back and watching money come in- anyone could do that. You have to know the industry well enough to know what can be successful and how to achieve it.

[WoofieNugget]

This is basically what I was trying to say. Way too many people take their life savings or a second mortgage on their house to open a business without the proper experience just to lose it all and have to go move in with mommy (if they're lucky). Being a successful owner isn't just sitting back and watching money come in- anyone could do that. You have to know the industry well enough to know what can be successful and how to achieve it.

Bingo. Totally agree.

[ironwill2008]

Excuse me if this isn't the proper section for this post. I'm currently active in the army and when I get out I want to open my own gym. I'm looking for any suggestions from anyone who has or has knowledge in running a gym.




What should I expect when starting up...etc?

Expect to lose you a$$.




Find something else in which to invest. srs.

[RamsdenF]

Opening gyms? He runs a PT company going to people's homes. I don't think he's ever opened a gym in his life or run a business for more than the few years he's been a trainer. Correct me if I'm wrong of course.

He thinks he's funny is all. Doesn't like advice that runs counterpoint to his views. You are correct Woofie.

As for the discussion, people get into business to make money - if you think otherwise then I'd love to hear it.

This is one of the most cringe worthy opinions that I hear when it comes to business. (it's a common one btw).

If you decide to start a business in order to make lots of money you will eventually end up out of business. Individuals should go into business in order to solve a "pain". Here is an article on "painkillers" - http://www.forbes.com/sites/georgede...-a-painkiller/

You need to have a passion and be able to help others or provide a service that is needed. That is more important than trying to generate profits. If you create a painkiller....profits will follow.

[RamsdenF]

I worked for 4 years in the YMCA in 3 different gyms and a council-run community gym and was a very successful personal trainer. For the last year or so I've run my own moderately successful garage

gym. By "moderate" success I mean I make as much or more money as I did working for others, but not so much that I can expand beyond the garage without taking some financial risks. I have before

me KPI and budget reports from 5 community and 4 commercial gyms with at least 2,000 members each (I'm friends with the managers and have my own sources) and also several industry reports

for an overview. So that's the basis of what I'm saying.

In Australia, the big box gyms have gone backwards or stagnated, and the new money has gone mainly to 24hr gyms but also a bit to small training gyms.

Anytime, Jetts and Snap together make up 36% of industry income, they're all 24hr gyms.
Fitness First, Goodlife and Genesis are together 34%, these are the traditional big box gyms.
Fernwood and Curves are women-only gyms and make up about 8%.
The other 22% is a mixture of independent and council-run gyms. Less than 5% is PT studios, crossfit gyms and so on.
Mobile trainers, bootcamps in parks and so on, they're just too small to even be measured in a nationwide survey. Ramsden with his in-home stuff and me with my garage gym, we're nothing, really. We're an accounting error.

In 2010-11 Fitness First earned $342 million, in 2014-15 $220 million. In the same period Anytime went from $26 to $233 million, Jetts $43 to $150 million, and so on. Overall industry revenue in that period went from $1,159 to $1,349 million. So there is extra money floating around, but it's not going to the big box gyms. It's the 24hr and training gyms, and also a bit to the women-only gyms (Curves has shrunk but Fernwood has grown much more).

Some gyms are trying to make up for this by having their own version of a training gym, like the YMCA has got "Adrenaline." Mostly these are dismal failures since people go to somewhere like Crossfit for better coaching and for community. As much as we like to rubbish Crossfit coaches, even the dumbest Crossfit coach will generally be smarter than the typical big box gym PT - they can at least coach a below-parallel squat, and know that effort is required in the gym. And you can have community much more easily in a place with 100-300 members than a place with 1,000-5,000 members. So the copies have just fizzled.

The stangation or failure of big box gym chains actually makes it tougher for someone who wants to open their own independent one, since you're competing against industry giants in a shrinking market, and as it's a mature market those big boxes are already everywhere. It's like opening a burger joint, just about wherever you are you'll be near a McDs, and they will out-advertise you and can afford to make offers like "30 days for free".

The average community gym is actually making a slight loss, 2% or so. Mostly this is because they can - the local council or YMCA or whoever will bail them out, and the secureness of public sector and NGO jobs at management level gives them no performance incentive. So they spend more than they have, usually unwisely. The increased spending is NOT on staff wages or training, it's on equipment (power racks, barbells, sled tracks) and programmes (like the Adrenaline Crossfit copy mentioned above) and of course more marketing to try to make up for falling market share.

The commercial gyms are making a small profit (about 3-5%). The 24hr franchises are all over the place, depending on how clued-in the owner is, but generally do very well. Part of the reason for their growth is because it's trendy, every yuppie and his dog is opening one - and never having set foot in a gym before doesn't stop him. This is pretty similar to the way cafes were 10-20 years ago. So they open quick and close quick.

This is probably more true of the training gyms, like crossfit. It's hard to find a place that's been open for more than 2 years, but if you do, you'll find the owner has 2-3 former members who have now opened places of their own. There's a big turnover here, and anyone looking to open their own place can get secondhand gym gear cheap - not much treadmills and bikes, but lots of barbells and plates and kettlebells and so on.

Like the person who wants to open a restaurant, you can't compete with the big chains on price unless you have a lot of cash behind you (it's about $1.5 million to open a Fitness First, though one guy spent $12 million - and crashed). So as a restaurant you compete on quality of food and service and "family feel". As I said above about Crossfit, good coaching and community.

Of course, it's not easy to become a good trainer/coach, but I'd say it's easier than finding a few million bucks so you can compete with the big boys in town. So this is why we make the recommendation to have a small training gym. It's more income and less hassle than mobile PT, but easier to get into and survive than a big box gym.

Of course if all you want to do is make money, pick a 24hr franchise. But we're assuming you actually want to train some people - at least for now.

But either way generally I do NOT recommend a newbie trainer open their own business, any more than an apprentice chef should open their own restaurant. Work for someone else for a few years, getting a feel for training people and the industry generally. Then you'll have a clearer idea of what you can and should do.

Thomas Plummer talks a lot about this stuff, look him up.

Very good post concerning industry statistics.

[SonofJack77]

This is one of the most cringe worthy opinions that I hear when it comes to business. (it's a common one btw).

If you decide to start a business in order to make lots of money you will eventually end up out of business. Individuals should go into business in order to solve a "pain".

You need to have a passion and be able to help others or provide a service that is needed. That is more important than trying to generate profits. If you create a painkiller....profits will follow.

The way my old man used to put it.
- Business is not about making a profit; business is about adding value; profit is just a necessary by product.
- You don't go into business to make a profit; you make a profit to retain the privilege of staying in business (continuing to experience the joy of adding value).

Sean

[KyleAaron]

This is worth bumping for more discussion.

[TheSteve39]

I'm glad I stumbled onto this thread. It's been a dream of mine to own a gym sometime in my life after those pesky student loans are gone. KyleArron's post is definitely not a TL;DR sitch, don't breeze over that one.

I think it's worth noting that past failures (have the potential to) fuel future success. Perhaps it may be best to start out in a gym as a trainer, learn the ropes and then branch out, as others have mentioned, to a small home gym, training studio and expand even further when financially comfortable to do so. While risks are certainly worth taking to achieve goals, I think this is a case of going from A to E and skipping some key stops in between.

[rockangel]

Seeing this post made me look up the old gym I worked for just to see where they were at. It seems the owners/management I worked for have sold out to someone else, and the staff has completely changed. This makes the 4th owner of that facility.

That didn't last as long as I thought

[KyleAaron]

Well, rockangel, I've long said the fitness industry is quite similar to the hospitality industry: low barrier to entry, lots of casual part-time work no career progression so it attracts indifferent amateurs, and it gets trendy and people think they can make a big buck with no education, training or planning. So... big turnover of staff, and big turnover of businesses.

This is a bit gloomy, but it also means that a competent person who takes time to plan things can do very well.

[rockangel]

Well, rockangel, I've long said the fitness industry is quite similar to the hospitality industry: low barrier to entry, lots of casual part-time work no career progression so it attracts indifferent amateurs, and it gets trendy and people think they can make a big buck with no education, training or planning. So... big turnover of staff, and big turnover of businesses.

This is a bit gloomy, but it also means that a competent person who takes time to plan things can do very well.

You are right, however, the very knowledgeable and competent trainer who did work there when I did, actually did open his own small training studio in a better location and is doing very well. He worked at this defunct gym long enough to purchase his own space and equipment, and to build his clientele at the new location.

He did a crap ton of double work, being as he was working at both locations and they are far apart, but he now is his own boss and is successful. So its not all gloomy.

Only gloomy for those that don't do the homework and don't listen to the industry vibes

[Ronin4help]

You have to factor in cost of equipment, rental space, electric/water bills, paying employees, insurance.

I know around here a few gyms have closed down, once planet fitness moved into town. They couldnt compete with the low prices that PF had, and lost too many members so they had to close the doors.

I would not recommend this jump into ownership. I would start as a trainer or gym manager for a few years. There are so many intangibles that unless you experience them from experience before owning a gym, they can cause you to ultimately fail as an inexperienced gym owner.

[smakk]

Excuse me if this isn't the proper section for this post. I'm currently active in the army and when I get out I want to open my own gym. I'm looking for any suggestions from anyone who has or has knowledge in running a gym. What should I expect when starting up...etc?

Ive been in the fitness industry for a long time, and you need to right reason to open a gym.

Your best bet is a smaller niche gym, combat sports, crossfit, powerlifting, etc.

Just know that if the reason you want a gym is because you like training, you are better off becoming a PT and subcontracting to a larger facility, that way you are still your own boss.

I've seen countless gyms start and fail because the owner didn't have the right mindset, just because you are a good coach or PT or fitness instructor, that doesn't mean you will be a good businessman.

Your gym will survive or fail on your ability to sell and market it.

[JohnSmeton]

well you better have good credit or be able to convince someone to loan you the money to open a gym, unless you won the lottery or inheritance etc

you better know what your doing. Id for sure start small, that way you can learn and wont be a big risk.

[KyleAaron]

Or you could save up money first. I know, saving and waiting for things you want, radical idea

[Ronin4help]

The wrong mindset is being displayed by some other posters. Mainly Woofie and Wolfbeast.

They talk about price/profit/competing/etc. Why is the first topic of conversation? Because the fitness industry has been dragged down to low intelligence thinking in terms of providing a service. PRICE PRICE PRICE PROFIT PROFIT PRICE blah blah....


The real question is....what is your vision? Voltri is 100% correct when he poses the question "Why would someone go to your gym?". I would argue, "price" shouldnt even be listed in the top 3. Our industry is so overwhelmed with maximizing profits that we have resorted to such tactics as "lengthy contracts", "paying trainers 15% of the fee", etc. Price is just but one factor.


Planet Fitness and other large chain gyms are absolutely horrible it terms of a service/product. They do well based solely on price. These are not the clients you would want to attract anyways. You want people that ask "what do I get" before they ask "how much is it". Those big chain gyms are atrocious and everyone complains about them because their are not that many alternatives because all competitors focus on "price" and worry about "profit".

Do not get discouraged by others. Research, plan and weigh all options.

I agree. Also, consider failure as much as success. Most people spend all their time thinking about the areas in which they wish to succeed and not enough time thinking about all the many ways they could fail. Consider the things that might not go well and what effects those things will have on you ultimate succeeding and you may be able to come up wit solutions before those things come to fruition. I will guarantee you one thing, everyone who has failed thinks of those things. They all try to figure out what where it all went wrong. I am simply saying, do that thinking before hand.

[KyleAaron]

Worth bumping a year later. The trends have continued. Big box gyms still struggling, 24hr, women-only and training gyms are growing.