Writing a Gym Business Plan (How-to Guide + Case Study!)

Gym Business Plan - Featured Image

We all love a good success story, don’t we?

How about one that could teach you all the skills and insider tips for drafting up a gym business plan?

Sound good?

Well, look no further!

In this article, we’re going to look at how OriGym grew from a start-up personal training studio based in Liverpool, to owning 12 gyms across the UK along with thousands of students and personal trainers.

Over the three years that OriGym has been running, it has achieved:

  • A regular turnover in excess of £5million
  • An employee list of 70+ trainers, freelancers, and contractors
  • Qualifying over 4,000 professionals per year
  • Setting up industry-leading academies with the likes of Sports Direct and JD Gyms

This was all achieved despite:

  • A limited budget
  • No prior experience managing a gym or being a course provider
  • No qualifications in business or management

The most important part of all this is that OriGym’s success is replicable through the guide outlined in this article.

We’re not only going to show you the results of OriGym’s business ventures: we’re actually going to show you how we did it, step-by-step, and give you all the industry tips for developing your own gym business plan.

Want to finally know how to achieve the success you’ve always dreamed of, in a competitive and fast-moving industry?

Well, get reading!

 

Step One – Market Research

First you need to brainstorm some ideas.

You need to decide what type of gym you feel your target market in your location would benefit from, and how that would differ from the competition.

Gym Business Plan - Market Research

 

Step Two – Why finding the perfect location is one of the most important aspects of setting up a successful gym

When writing your gym business plan or personal training studio plan, you need to think about the location of the gym. Even if everything else is water-tight, a large part of your success will be determined by where you choose to set up.

 

Why gym location is so important…

When you’re trying to complete a gym business plan, or any business plan that operates within a specific location for that matter, it only makes sense that your first thoughts should immediately turn to the location of your business premises.

A good location improves your marketing, makes attracting audiences easier, and can be the difference between your business flourishing, or crashing out at the first hurdle.

When setting up OriGym, location was of primary concern:

 

Luke Hughes: “When deciding how to set-up a gym, location was key, irrespective of how unique or innovative our later plans were. Before we settled on our final premises to start OriGym, we had visited over 30 different sites.

“What’s important to remember is that there are so many variables that you need to consider that could affect your future success of your business. For us, being close to a target audience, and being able to find the right staff was key, so we chose our venue based on these factors.”

 

What location factors you need to consider when setting up a gym…

As well as business-specific factors, there are also a few practical considerations that you have to keep in mind when you’re choosing the site of your venue.

Any gym business plan that doesn’t consider the following, risks having their business stifled by regulations and red tape…

Gym Business Plan - Location Factors

 

Luke Hughes: “We elected to go for a warehouse-based gym that was just off a main A road. Our venue therefore had plenty of accessibility, visibility to passing traffic, and came with a free car park for our gym members.

“There were no competing gyms within a three mile radius, no business rates, and rent was low due to it being a warehouse that we converted into a gym”

 

Before we move on, let’s look at some of the most important factors to consider when drafting up your business plan.

Remember, neglecting to cater for any of the below could see your whole plan, and business, collapse at an early stage.

 

Council Permission

You might have started with an aesthetic vision for your business, be it a boutique gym, a warehouse conversion, or even an inner-city venue with more of a commercial feel.

Regardless of your plans, one thing that all new gyms need is council permission and landlord authorisation.

Gym Business Plan - Property Search Engines

On most search engines, you can search via D1 premises, inputting your location and industry to pinpoint ideal locations.

You may believe that you have found the ideal location for your new gym, however, bear in mind that it often turns out to be the case that a premises requires you to officially declare the purposes of your business, in order for you to legally open a gym in that building.

Now, here’s the important part: it is a legal requirement for a gym in the UK to have D1 planning permission. 

Many applicable sites will already come with this planning permission, but it can become a difficult process if you find a perfect site that only has the planning available for offices or retail.

While the process has many steps – outlined in this excellent article – the basics are that you will need to ask the estate agent if the landlord would be willing to support a change of use, before applying via the local council for that planning permission to be accepted.

As you can imagine, this can be a time-consuming process, during which there is the potential for another company to swoop in if they do not require so many changes to existing regulations.

 

Foot Flow & Visibility

Finding a suitable premises that has a guaranteed foot flow, or, at the very least, consistent volumes of traffic that pass by throughout the day, is critical for setting up a successful gym.

Keep in mind that venues placed on high streets or close to major transportation links often charge more on their leases, as they know this is what most businesses want.

 

Competition

When writing your gym business plan, you need to conduct a SWOT analysis of the immediate area in relation to your competition.

It’s all well and good securing a gym premises on a busy high street or main road, but if you are setting up a personal training studio next to a large national chain with a massive marketing budget, you could find yourself getting priced out of the market and struggling to make your lease rent.

 

Accessibility

When contemplating how to start a gym and putting your gym business plan together, you should always consider how accessible your potential venue is to your customers.

Is there good public transportation links such as bus stops and a train station nearby?  Is your prospective venue situated off a main road? Are you in a thriving business area?

You must calculate the cost difference of being on the main road or high street, against the cost of the increases in gym rent and, potentially, reduced gym space.

 

Future Development Work

Another industry tip to when it comes to opening a gym is to consider what development is planned in the coming years for the surrounding area.

If you find a potential gym premises that has scheduled increased public transport, infrastructural changes, or business development e.g. a nearby business park, you could be getting a real steal on your premises before the land value sores.

 

Rent Price

When evaluating how much it costs to start a gym, one of the biggest outgoings to consider is the rent or lease cost.

Bear in mind that lease costs can vary based on where the venue is located, the type of premises it is, the square foot of the venue, and the level of accessibility / visibility your gym would receive.

Another aspect to take into consideration when evaluating how much it costs to start your own gym are business rates.

A business rate is the tax you pay to the council for having a commercial premises. It is calculated based on the rateable value of that premises. With gyms requiring large spaces, they normally have large business rates that come with the property.

That being said there are a few ways around business rates:

  • Firstly, you do not pay business rates on a property under £12,000 per annum.
  • A shrewd way of saving money is renting a venue where the space you are renting is part of a larger overall building, meaning your neighbours may be paying the business rates on that property, or you could at least split the costs between your businesses.

 

Style of Building

 One major cost to factor into your gym business plan is if there are any works to the prospective venue that need completing, in addition to any other work in the way of renovation.

These may include:

Gym Business Plan: Property factors

 

Step Three – What services will you offer?

When writing your gym business plan, you need to be clear in your mind what services your gym is going to offer.

Without knowing what you want to offer, you can’t make provisions for target audiences, and without planning for target audiences, you can’t accurately choose a location.

So, how best to condense what you are going to offer to your paying customers?

Let’s start with the factors you need to consider…

Gym business plan: services to consider

 

Step Four – What fitness equipment should you get? Should you buy equipment or lease it?

Of course, there is no one straight forward answer here.

Your budget for equipment depends on factors like what type of gym you are looking to set-up, the overall budget you have for your gym business plan, the size of the premises, and the expertise of your future clientele.

If there was one golden rule – and this applies to all aspects of business planning – it would be to not get carried away trying to beat your competitors in terms of buying state-of-the-art equipment.

Different gyms have difference client-needs to serve: being the best doesn’t necessarily mean owning the most expensive equipment.

But don’t just take my word for it…

 

Steph Roberts: “If your costs for setting up a gym are limited, or you just want to start a personal training studio, having a large functional based space is a great place to start, as it does not require much investment and is multi-purpose.

“When we set-up our first gym, we leased a few pieces of cardiovascular machines and fixed resistance equipment as they depreciate in value and soon become outdated. Most of our investment was originally spent on functional equipment, weights such as a squat rack, Olympic bars, and dumbbells as they have a much longer shelf life.”

 

Where should you buy your fitness equipment from?

Again, there is no straightforward answer to this…

Depending on who your clients are, and what they need from your facility, you might be able to save a lot of money only buying certain, specialist equipment, and avoiding expensive weights machines entirely.

A CrossFit Box, for example, may draw just as many clients than a commercial gym, and will usually have less than half of the equipment.

But if you do need to buy expensive equipment, where can you save money?

Major fitness equipment brands provide finance, and will allow you to lease or buy gym equipment outright if you have the capital to do so. They also provide packaged discounts the more gym equipment you buy, so it’s advisable to coordinate your equipment needs and buy in bulk.

Some of the brands OriGym had particular success with were:

Gym Business Plan - Gym Retailers

Luke Hughes: “Looking on Ebay or Gumtree always produces some hidden gems, especially for cardiovascular based equipment such as treadmills, cross trainers, bikes, or rowers for your gym.”

“Like most aspects of life, being pro-active has its rewards.

“If you see a gym closing down or a gym planning to announce an upgrade on its gym equipment, a pro-active email / phone call could help you secure cheap gym equipment in bulk for your new venue.

“In the past, we’ve even had gyms give us used fitness equipment for free, as long as we were willing to come and pick it up!”

 

Step Five – Where are you getting revenue from?

How much should I charge for gym memberships?

So, you’ve sorted your location, you’ve conducted market research, and you’re certain that your target audience are in the local vicinity of your gym…

One question: why is everything so quiet?

If you’re experiencing a low take-up in your new facility, it’s probably because your prices are too high.

Similarly, if you’re experiencing unprecedented business uptake, but you’re still struggling to pay the rent, then it’s probably because you’re not charging enough.

Choosing how much to charge your members can depend on local competition, what equipment you have secured, and the contact hours you and your staff intend to have with clients (weekly personal training vs. pay-as-you-go gym sessions, for example)

Here are some of the main factors you need to consider:

  • Service Ad-ons – Are you including any additional services, alongside access to the gym? E.g. free personal training sessions, free supplements, or free health checks.
  • Gym Facilities – Is there going to be a pool? Are there going to be fitness classes running out of a studio?
  • Gym contract – Normally the longer you get someone to commit to a contract for, the lower the monthly amount they have to pay. Many gyms now do not even have a contract
  • Gym Equipment – How much fitness equipment will there be? Will the gym equipment be branded and new?

Now listen up, because the next step is crucial.

When writing your gym business plan, you need to factor in how many gym members you believe will sign up to your facility in the early months, and you need to go on to make accurate predictions of your month-by-month growth.

 

What secondary gym revenue streams will there be?

A well thought out fitness business plan will evaluate every angle of potential revenue that the gym might earn.

When asking yourself how much would it cost to start your own gym, you must first anticipate the possible income generated through your primary services, in order to find out what potential there is for secondary revenue streams.

Here are a few additional revenue streams you might not have factored into your gym or personal training studio business plan:

Gym Business Plan - Services to Consider

 

Step Six – Gym advertising and marketing to get your gym off the ground

I can’t tell you how many people neglect this step, and as a result, how quickly their business ambitions fall through the floor.

It is a truth universally acknowledged that in order to succeed in business, you need to learn about marketing.

Or, you need to hire someone who knows about marketing.

Or, pay for freelancers who are professionals in marketing.

Basically, if you can’t compete with other gyms in terms of marketing, you’re going to lose out. 

 

Luke Hughes – “Gym advertising and marketing is extremely important, and you need to have a clear route to market and a gym advertising budget set aside to promote when setting up a gym.

“There are two forms of advertising: organic and paid.

“Paid gym advertising should be your first point of call to get immediate results, where organic gym advertising should be your long-term strategy.”

 

Gym business plan - Marketing

 

Step Seven – Factoring recruitment costs into your gym business plan 

When asking yourself how much would it cost to start a gym, you need to start thinking about how many members of staff you will need, and what their wage will be, determined by their expertise.

Below, we’ve compiled the most important factors you should consider when budgeting for staff and recruitment.

 

Steph Roberts: When starting a gym, one of the biggest gym costs to place in your gym business plan is staff costs. With OriGym, we used some free platforms and business links to get our first staff without paying any upfront costs to advertise for positions”

 

So, what are the best avenues for recruiting gym staff?

General Jobs Boards

Featured: Indeed is the largest jobs board in the world, and it is perfect for starting a private gym as it allows you to advertise jobs in one location, completely free of charge.

 

Leisure Specific Jobs Boards

Featured: Active Careers is a free jobs board within the health and fitness sector, where you can advertise for fitness-based positions completely free of charge.

 

Gym Recruitment Agencies

Featured: Gym Career is a recruitment agency specifically focusing on fitness professionals. With access to a huge database of high quality trainers, you will have plenty to pick from. But be warned, it will come at a financial cost.

 

Partnering with a fitness training provider

Most reputable fitness training providers have obligations to their graduates after they have finished completing their fitness qualifications, including guaranteeing interviews with gyms.

By offering to help their fitness instructing and personal training graduates find employment, you get a new staff member and the training provider fulfils their promises to their students.

 

 

What personal training structure should you use?

Remember, the structure with which you pay your personal trainers can drastically affect both your ability to earn, and theirs.

You want to design a structure that is enticing in order to attract the best personal trainers, but also one that ensures that your business remains profitable.

 

Steph Roberts: There are many different ways to offer personal training in your gym. In general, you can treat your trainers as a revenue stream, or hire them on an annual salary. At OriGym we combined paying some of our trainers per hour with options where freelance trainers could pay per client they bought into the gym.

“This allowed us to generate some income, but still have the best trainers around for our gym members to work with.”

 

Gym Business Plan - Fitness Careers Overview

 

Step Eight – Gym Insurance

There are many legality issues that you need to factor into your gym business plan, and taking out a policy of public liability insurance is an absolute must.

Insurance companies such as Protectivity and Insure4sport specialise in gym insurance and have specific packages to cater for the following:

Gym business Plan - Insurance

 

Step Nine – Unexpected overheads to consider in your gym business plan

As any business owner will tell you, it is often the aspects of running a venue that you can’t plan for that will cause you to lose sleep at night. 

Even if you have the best gym business plan in the world, planned to every immaculate detail, there’s always going to be something at the end of the month that you didn’t expect.

Of course, one problem with unexpected costs is that we can’t exactly write a definitive list of what they might be… Otherwise, they wouldn’t be unexpected, would they?

However, here’s some of the costs that caused us to double-take while getting our first OriGym venue of the ground:

Gym Business Plan: Overheads

 

 

Aaaand breathe.

You’ve made it through all the foundational steps of drafting your gym business plan, and got some valube insights from OriGym’s co-owners along the way.

Deserved pats on backs all round.

But we’re not done yet…

For the serious prospective gym owners, below you can find everything you need to know – and what we wish we’d known – in order to execute your gym business plan to its maximum potential.

 

Why it helps to be personal training qualified before opening a gym

There are many successful gyms out there run by individuals who have never set foot in a classroom to complete their level 2 or level 3 personal training courses.

And it’s true, business acumen, a sharp eye for marketing, and a great sense of timing are all aspects that are going to help you succeed if you’re looking to open your own gym: all skills more aligned with a business graduate than with a fitness one.

But there are also some huge benefits if you’re a qualified personal trainer looking to expand your business by owning your own venue…

 

Luke Hughes: Becoming PT qualified enables you to understand the market, in addition to the needs of your customers and staff to provide a better service.

“Additionally, if you are planning to run personal training sessions, conduct gym inductions or perform health checks yourself, you must be PT qualified to do this legally.

“Lastly, even if you have no intention of running any physical sessions yourself, you can fill in for staff absences, holidays or sickness to keep your customers happy.”

 

How should you name your brand?

Creating a brand is the aspect of setting up a business that many entrepreneurs get excited by.

After all, this may be the culmination of years of planning and ambition, so you want to be proud of the sign above your door and the branding of your website.

There’s only one small problem: it’s actually pretty difficult…

To avoid spectacularly missing the mark when it comes to naming your brand, keep these tips in mind:

Gym Business Plan - Choosing a brand

Creating a memorable fitness brand name that leaves a clear first impression of what your business does is crucial when learning how to set up a gym.

 

Steph Roberts: “We selected OriGym as our brand name as it combined the word “original” with the word “gym” to capture our brand ethos.” 

 

Registering your gym or personal training studio on Companies House.

 Before officially registering your gym name on Companies House, there are a couple of housekeeping rules to be aware of…

Gym Business Plan - Registering on Companies House

What you register your business name as on Companies House has little bearing to what name you can market as a trading name, as long as this is transparent on your website and marketing materials. Getting your brand name trademark protected is far more valuable and should be a priority when incorporation incurs.

 

Don’t forget to pencil in a pre-sale event into your gym business plan!

Ever wondered how all those new gyms seem so busy as soon as their doors open?

Well, now you have an answer, and its gym pre-sales.

Once you’ve established the day that your gym will open, you should immediately launch a gym-presale event in order to attract your first members.

The whole idea of your presale is to draw customers to your new facility, and the easiest way to do this is to offer a discounted price for pre-sale clients.

Remember, marketing is a key aspect of your gym business plan, and this kind of campaign is an easy win in terms of attracting some early customers and attention.

Add to your pre-sale by offering virtual tours of what your gym is going to look like upon completion, and by offering brochures with price-lists for more services (this way, new clients can see how much money they are saving too!).

 

And with that, our guide to writing the ultimate gym business plan is complete!

If you follow all the steps outlined above, and deliver a unique service and brand to your area, you’ll set yourself on the right path to expanding your local business into a national one.

We’re not just confident that our step-by-step guide will work, we’re sure of it! Having used exactly the same steps outlined above, OriGym continues to expand into an international business.

And we want to hear from you!

Have you joined one of our many successful graduates in starting your own gym business? Get in touch in the comment section below, or via Facebook or Twitter, and let us know what lies next for you in this exciting industry.

And if you’re at the start of your business journey, remember: there is no better way to prepare yourself for a career owning a gym than to gain your Level 2 and Level 3 personal trainer qualifications.

For all you need to know in terms of the career paths available to you, download our free prospectus. You can also contact us at any time via [email protected] or 0800 002 9599.

 

 

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