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How to Start a Gym: VIDEO | OriGym

Watch our step-by-step videos on "How to Start a Gym". We have broken this down into 2 videos for you or you can read the artice version below.

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STEP 1 – Get Qualified in What your Preaching

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Before you even consider starting a gym, you really need to have an understanding of the industry both from a commercial perspective and as authoritative one. If you’re already a qualified Personal Trainer, you can skip to step 2!

Getting yourself qualified as a Personal Trainer and working as one gives you this industry insight and commercial awareness of what your prospective customers want and the relevant expertise to become successful in this sector.

If you’re looking to set-up a PT Studio as a sole trader this becomes even more paramount as its fundamental to your business and a legal requirement for insurance.

To get qualified head over to origympersonaltrainercourses.co.uk and see our range of internationally accredited courses where you can qualify in as a little as 4 weeks or download our free course prospectus in the description below – Show OriGym website / Courses

STEP 2 - Establish the type of Gym you want to set-up based on your target market

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There are several types of gym that you could open, you need to establish what aspect of the fitness market interests you, the demographic you want to target, and in what style of building you wish to run your gym or Personal Training studio from. 

These three aspects are critical as it influences your branding, your market appeal, start-up costs and much more.

As an exercise simply write down the following:

  1. The type of training you envisage your gym running
  2. Who you want to target, what does your ideal client look like?
  3. The style of building you want to run your gym from

For example: 

  • NICHE: weight training, strength and powerlifting
  • DEMOGRAPHIC: Mainly men – aged 18 – 45
  • VENUE: Warehouse based, out of a city centre

Of course, there are other routes you could take another example could be:

  • NICHE: weight loss, toning, private personal training
  • DEMOGRAPHIC: Mainly women – aged 30 – 55
  • VENUE: plush, boutique in commercial area of city centre

Once you have established the type of gym, you can then move onto the services and what makes your gym unique and why people will want to be members there. 

STEP 3 - What Services are you Going to Offer?

Before you identify your income streams, you need to outline what serviced you’re planning on including in your membership. What is your unique selling points or USPS? What services are going to be included in membership and which services are extra cost? 

Your membership cost and structure should depend on these factors and be determined by the perceived value of the services within the membership.

Here are some things you might want to consider in your membership services:

  • Contract length – is it rolling month to month contract or a 12-month minimum term
  • Joining Fees – are you going to apply joining fees?
  • Opening hours – longer opening hours offers more value and flexibility
  • Type & quality of Equipment (we’ll touch on this later in this article)
  • Classes – how many classes per week / how specialised those classes are
  • Personal Training – are you going to offer any PT sessions as part of your membership?
  • Nutrition Plans – Are you going to include any nutrition guidance to your members.
  • Kids club – Can kids access the gym at certain times with a member.
  • Health MOTs – Run free health MOTs that review blood pressure and body composition
  • Progress tracking – You could include monthly progress checks or use progress tracking software, which members can access via a member login
  • Towels – Do members need to bring their own towel?
  • Resource Hub – Have a dedicated member only section on your website where members could access workouts, programmes, seminars, podcasts or educational guides.
  • Sauna / steam / pool – If you’re planning to have any of these facilities, is it going to be a one-off extra cost for members to use or would it be a different type of membership?

All these factors influence your PT Studio or gym start-up costs as they either cost money to set-up, run or deliver. This money needs to be recuperated with profit, from your services and how much you recuperate depends on how well you have executed these services, the amount its costs to the end gym user and the demand for what you’re you’re offering. 

For example, you could offer a free nutrition consultation and plan to every new gym member, which sounds like a great additional service you could provide and would certainly be an awesome USP, however, you would need a nutritionist, dietician or Personal Trainer to administer these nutrition plans and implementation could drive your running costs through  the roof. 

For example, if you had 300 new gym members a month and on average 60% of them wanted to take use of this free nutrition plan and you paid a PT £15 an hour to deliver them, that would cost you £2,700 a month to deliver and £32,400 a year. This doesn’t even factor for existing members coming back for a revamp to their existing nutrition plan.

Additional services drive up your costs and subsequently the price to the member, which could affect gym members joining in the first place.

This is why services need to be thought out and financially planned thoroughly. 

STEP 4 – Market Research

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Market research is important to establish to see if your gym idea resonates with your target demographic.

By performing market research, it allows you to compile data to see if this is the type of gym people want or the services you want to include they would value and benefit from. 

How to do market research for a gym:

  • Surveys

You can run a survey using Censuswide or YouGov who will run a survey for you against your criteria, whether that age, gender or if they are a member of a gym.

  • Focus Groups

Run an advert for a focus group of people that match your customer profile in your local area, present your idea and open the floor for questions and answers. Focus groups can find flaws in your business model that you can fix, as well as generate new ideas that perhaps you have not yet thought about. 

  • Ask Industry Experts

You can ask industry experts or current gym owners who have already set-up a gym or studio successfully to offer insight and opinion on your gym model and services.

  • Looking at positive and negative reviews

Review your immediate competition’s reviews of what they do very well and what customers complain about.

For example, if you want to start a health a club, look at the 1 and 5 star reviews of other health clubs on Trustpilot, Google, Review Centre and Feefo to see what areas can be emulated or problems that you feel your gym can solve.

For example, see these real Google reviews about a health club in Liverpool:

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These 1-star reviews show you that this gym’s weakness is cleanliness and equipment maintenance, which is valued by their members.

If you were setting up a health club in that area, you could get cleaners on site at all times the gym is open to ensure the changing rooms and gym equipment is looking immaculate and hire a contracted gym maintenance company to be on call for when equipment breaks, reducing down time to your members. You would need to factor these costs into your services and gym membership.

Ensure to analyse the positive reviews to, using a different gym you can see what positive aspects your potential customers value:

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As you can see from this gyms example, dozens of members put up positive reviews about the volume of classes and the quality and friendlies of the instructors. If you were planning to set-up a health club style gym without classes, you could add this in as an extra service as this is what your members would value, this is why you do market research to make adjustments to your business model.

You can even take it a step further by tallying up all the positive and negative reviews just on classes to see which classes people enjoy the most, so you know which ones to focus on or put more of on your class timetable. 

You can repeat this process for bodybuilding gyms, Personal training or powerlifting studios and see what those members value by scanning direct competitors positive and negative reviews.

STEP – 4 Location, Location, Location

Now you have decided on the type of gym you want to run, you need to think about location, before creating or determining pricing points as the venue cost, position and structure will place a huge role in this.

Location is arguably the most important part to consider when setting up a gym. 

There is a whole host of factors that you need to consider when deciding on prospective locations and which venue to go for, including: 

  • Foot fall
  • Accessibility
  • Parking
  • Competition
  • Council Permission
  • Development work nearby
  • Rent & Lease terms
  • Space
  • Other amenities
  • Style of Building

To name just a few. 

Let’s break down these key location point for consideration. 

A) Foot Fall

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The difference a high footfall can make is astronomical for some gyms, but other types of gyms it is far less critical. For example, 24-hour gym chains like Pure Gym and The Gym Group always opt for really busy footfall spots generally in city centres or retail parks, this is because they need a huge foot flow of potential members to sustain their gym model. If you opt for a high visibility footfall area, you need to bear in mind that this is factored into lease pricing and will drive up your monthly outgoings.

By contrast, you could opt to pay far less for a venue in a sub-urban area, where there is less footfall, but that in turn potentially means less gym members.

The necessity for footfall really depends on the type of gym you’re looking to set-up and whether or not you’re aiming for a volume-based model or a boutique gym or PT studio, where you need fewer, but higher paying clients to sustain your business.

PRO TIP: It is difficult to calculate footfall of an outside area, but city councils do track this information to manage flow of people and vehicles.

You should request this information from the property management company when viewing a city centre-based premises to ensure you get a guestimate of visibility.

Try to avoid premises where you’re paying the inflated visibility price, but the actual foot flow that passes by is low, which is often found in small off roads or where traffic diverts away from the road via one road systems.  

 

B) Accessibility

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Accessibility ties into footfall. Before progressing with a venue, checking its accessibility points for transit, bus and car is important. The easier it is for your potential customers to reach get to your facility the better. 

PRO TIP: Finding venues on A roads leading into city or town centres can give your site the exposure it needs without having to pay the inflated prices of central based locations. Anytime Fitness and Snap fitness have built their franchise models using this principle. 

Take this Everlast Gym in Northfield, Birmingham. This gym is based towards the edge of the city, but it is located on the A38, Bristol Road, that gets tens of thousands of daily traffic going past every day:

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If you’re planning on starting a big gym, then either visibility, accessibility or both is paramount to your gym’s success. 

C) Should you Start a Gym with a Car Park?

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Should you find a site that has car parking? There are pros and cons both ways.

Having the space and availability for you members to park improves the sites accessibility, improves convivence and is a useful feature, however if you’re starting a gym or personal training studio on a budget this could be a huge mistake. 

When you lease a premise, you’re paying per square ft and if you have a small car park that could drive your rent up £1,00-£2,000 a month outside of a city centre, let alone you would pay city centre pricing if it is located in a high footfall area. 

PRO TIP: You can find venues on retail parks or areas where there is shared car parking, such as this one on screen, where the gym group has set-up on a retail park next to BM Home stores amongst other big names retailers. These car parking spaces are normally included in your lease and you get the best of great visibility and footfall.

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D) 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.

it is a legal requirement for a gym in the UK to have D2 planning permission. 

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

You can 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.

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

Often finding an already authorised D2 premises by searching on Google for “D2 Premises for lease (INSERT LOCATION) followed by your desired location will narrow listings to just D2 premises or you can search on Zoopla, right move, or NovaLoca and filter your search by commercial property use classes or by “Leisure”.

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For example, I googled “D2 premises for lease Manchester” and clicked through to Realla, a local estate agent and found this premises previously occupied by Mothercare being advertised, which could be converted into a gym as it has the correct planning permissions, size, space and visibility.

 

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E) Nearby Development Work

Before going ahead with any venue, you should perform a quick search using the government “search register for planning decisions

This allows out to search for future scheduled development work in and around the location you’re planning to start a gym.

The reason this is important is that it can affect your business either positively or negatively in the long run.

For example, positives would be:

  • New transport links opening nearby
  • Retail development that can increase footfall
  • More residential flats opening, thus increasing your market reach

Negatives could be 

  • A large gym opening nearby
  • Transit links being removed 

Competition Analysis

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Before going ahead with any venue, you need to perform a competitor analysis of the local area. This should include:

  • How many other gyms are operating in your vicinity?
  • What style of gyms are they?
  • How much do they charge?
  • What is their USPS? (unique selling points)
  • What level of threat do they pose to your gym business plan?

For example, let’s say you want to set-up a volume based 24-hour gym in a city centre and have found a great premise, but there is a Pure Gym opposite, and The Gym Group is further down the high street. 

This great looking venue, now does not appear so great as their almost unlimited marketing budgets, established brand names and more than likely, superior facilities may drown your business before you even get started.

This being said, starting a Personal Training studio or a high-end boutique fitness facility may not be affected at all as it targets a higher end demographic than someone who is paying £14.99 for their gym membership.

For example, ABS Personal Training studio is located in the heart of Liverpool City centre, just 2 minutes’ walk from JD Gyms and 5 minutes’ walk from the Gym Group, yet their business has been running successfully for years and has even expanded with another venue in Liverpool and Manchester.

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Space and Shape of Space

A very important aspect to have in the back of your mind when viewing premises is the building shape and space. As we mentioned earlier in this article, you will be charged per square ft, whether you utilise all of the available space or not.

Therefore, the shape of the venue matters a lot as you want to be able to maximise the space you’re paying for. 

The style of gym you wish to deploy will influence the gym equipment your venue will have, but a key component is the shape of the gym.

Cardiovascular and fixed resistance-based equipment in particular take up huge space and is most often square or rectangular in shape. Sourcing square or rectangular based venues that are spread over one or two floors would suit this type of equipment far more than a venue where some of the walls arc or is circular in shape.

This issue becomes less prevalent for Personal Training studio or functional based gyms as they tend to have less bulky apparatus and more functional based equipment.

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Getting a square or rectangular based gym is far easier for planning your gym layout, knowing what equipment you can fit in and creating walk ways for members to navigate from one piece of equipment to another.

G) Amenities  

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What do we mean by amenities? Amenities are desirable features for your gym or studio that you feel your members would benefit from or you can harness as a secondary income source.

Here are some examples:

  • Showers and changing facilities
  • Bar, café or seating area
  • Pools
  • Tennis or squash courts
  • Reception area
  • Vending machines
  • Gym Clothing store
  • Creche
  • Water Stations
  • Indoor running track

All of these amenities have two things in common:

  1. They all take up space
  2. They offer value to your members

You therefore need to work out if the amenity is worth the extra value it provides your members that you can recoup the extra income through membership sales. 

For example, let’s say you find a premise that is 5,000 square ft and you wanted t having changing facilities. This could take up 500sqaure ft and 10% of your gym floor. You need to ask yourself - Would you make 10% extra revenue from membership sales by having changing rooms? Or would you be better off filling that space with more gym apparatus?

Let’s look at another example from an amenity that actually makes direct revenue like adding a bar that sold fresh, healthy food to members with a few tables and chairs as a seating area:

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The value is that the members could access healthy food, coffees and smoothies straight after their workout and you can generate a revenue from this.

  • There is a place for members to sit before and after their workouts
  • And it provides a community area 

But is the money you project to take from this bar going to outweigh, the set-up costs to get the bar installed and staff the bar? Or would you be better off again just having more gym equipment?

This is why you need to calculate the value of amenities and determine based on your style and size of gym whether it will be fruitful or not.

Rent & Lease Terms

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Of course, an important factor into any business is rent, i.e How much are you going to pay for your venue each month.

When starting a personal training studio or gym, most premise are leased, but there is more than just your monthly lease cost that you need to be aware of, such as: 

  • Service charges – (especially prevalent if you’re renting on the ground floor of offices in a city centre)
  • Commercial Stamp duty
  • Business rates
  • Deposit - typically equivalent to three- or six-months’ rent upfront 

All this should be factored into your gym business plan start-up costs and overheads.

PRO TIP: Some Property management companies charge low rent costs so they can draw in enquires, but charge huge services charges to compensate for this. Always ask if there is any service charges and what you get for that service charge and add this to your monthly rent cost.

LEASE TERMS

There are pros and cons to having short and long-term leases.

For example: 

Short-term leases: 

PROS

  • If your business grows rapidly, you can move to a larger venue more easily
  • If your business doesn’t work as expected you’re not committed for a long period of time
  • Short-term leases come with reduced stamp duty as its calculated as a percentage of the total rent payable over the lease period
  • You can re-negotiate terms more frequently such as rent. 

CONS

  • You may not be able to renew your lease if the landlord wants a change of occupier or use, meaning you have to find another premise
  • You will pay a little more than a long-term lease

Long term leases

PROS

  • Landlords will be far more flexible with rent and terms if you’re showing you’re willing to commit
  • - More Security. With a long-term lease, you can be confident that even if the building is sold, you will not be forced to relocate 
  • Predictable Costs.A long-term lease makes budgeting easy, as you will know what your costs will be for a set number of years.

CONS

  • Inhibit growth. (Your gym might grow at a rapid rate and you might fi yourself stuck in a long-term lease when you may want to leave to find a new, larger venue.
  • Paying for unnecessary empty space. If your gym membership base does not accelerate in the manner you had hoped, you could be left paying for dead space that you had left for more equipment or amenities. 

PRO TIP: Like many things in life, lease terms can be negotiated, but this really depends on demand for the venue.

If the premise is highly sought after, negotiations points can be limited, but if the premises has been on the market for a while you can negotiate your lease terms to suit your gym or studio.

For example: 

  • You can get a free rent period
  • Free whilst you renovate and get your equipment in
  • Reduce the lease term to suit your gyms needs
  • Get a break clause in the lease so you have an exit option before you’re the end of your lease term
  • Not liable for building repairs

H) Style & Condition of the Building

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The style of building, the condition of the venue and renovations you need will play a role in how much it costs to start a gym.

For example, Industrial based warehouse gyms come with cheaper leases due to 2 factors, location and demand.

D2 applicable facilities in city centres, bottom of office blocks or retail parks can be used by dozens of companies from different sectors, whereas industrial warehouses are not normally located in central locations and can’t really be used for retail or offices, thus driving the lease cost down.

Along with style of building is renovations, which is determined by your gym model and the condition of the venue.

Renovations may include:

  • Inserting gym flooring / Studio flooring
  • Air Conditioning for summer months
  • Branding such as decals, banner and signage, slogans or social handles
  • Painting and decorating
  • Mirrors & Lighting
  • Electrical access points for cardio equipment or televisions
  • Swipe in systems for members
  • Partitions
  • Access points and fire escapes

STEP 6 – Gym Floor Planning & Equipment

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You need to plan your gym floor prior to buying all your desired equipment.

You need to plan for several reasons, including:

Health & Safety – You can’t have gym apparatus blocking fire exits or overcrowding the gym on entry.  

Profitability & Waiting Times – You want to be able to maximise how many people could workout at the same time in your venue. For example, fixed resistance equipment and large cardio machines, can only be used by one person at a time, but having a dedicated functional space, more free weights and benches allows more people the opportunity to work out whilst not taking up that much room. 

Waiting Times – Poor equipment choice can lead to members waiting around for equipment, which is a step closer to them cancelling their membership. Ever found a gym with just 1 squat rack and people are queuing up for it, yet they have 30 cardio machines untouched? This is poor equipment choice. Picking what you believe will be your most utilised equipment and buying multiple versions instead of equipment members will hardly use. 

Convenience – Depending on the style and size of your premises, you may want to zone your gym into cardio, free weights and machines, as members hate to walk far when switching apparatus.

Walk ways – As we have already touched upon in this article, walkways are important for members being able to navigate from piece of equipment to another without disrupting other members.

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You should obtain the dimensions for all equipment you buy so you can plan your gym floor to maximise space and reduce the risk of a piece of equipment not fitting into your gym.  

Sketch out your gym floor plan, shift things around, be creative and have fun.

What equipment should I get?

One of the service aspects that does determine cost to an extent is the amount of equipment, equipment type and and quality. 

The type of gym equipment you get is largely based on two factors: 

  • Money you have available to invest
  • The demographic you’re trying to attract.

For example, if you’re starting a personal training studio, the quality of the equipment available is less important than the quality of the services you are aiming to provide. You could easily get away with setting up a personal training studio with just functional based training equipment, which is fairly cost efficient.

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But if you’re planning to set-up a bodybuilding or strength training gym, some of the gym equipment is large, expensive and necessary to attract the right people to your facility. 

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Likewise ,if your planning to start a fitness centre or health club feel gym, where you want to have a vast range cardio equipment and fixed resistance machines, the cost of buying just one piece of apparatus brand new can cost you thousands, but equally this type and quality of equipment is what the demographic your trying to attract would expect in a health club feel gym.

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PRO TIPS on buying Equipment on a budget:

Buying any gym equipment brand new is costly, whether it’s just some suspension straps, a bench or a leg press. It’s like buying a brand-new car, as soon as you drive that car of the forecourt it instantly dilutes in value.

To combat this, there are a few tips of how you can buy high quality equipment for starting a gym on a budget, without inflating costs.

  1. Re-furbished gym equipment – to quote “BestGymEquipment.co.uk” “You will be able to find gym equipment that offers you everything you expect from brand new but without the price tag”. Re-furbished equipment is equipment that is pre-owned and has been exactly what the name suggests, “re-furbished” for re-sale. Re-furbished equipment is around 30-40% of the price of brand-new equipment and still comes with warranty periods.
  2. Gyms closing Down – If you notice a gym is closing down or is up for sale, you can approach the gym to bulk buy their gym equipment at a heavily discounted rate. 

Just because a gym is closing down, does not mean they don’t have great equipment. Both private gyms, National chains and big-name gym franchises with high end spec equipment close down all the time.

A quick Google search for “gym for sale”, will bring dozens of property websites of where gyms are actively selling their business. Simply pop the gym name and location into Google, navigate to their contact us page and drop them an message.

For example, I found this gym for sale in Hyde on Rightbiz.co.uk.

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I could then contact the seller or find the gym on Google and drop them an email regarding purchasing their gym equipment.

3. Second-hand Gym Equipment Websites

To save even more money, you can opt for second-hand gym equipment.

The difference between second hand and re-furbished is that your generally buying form the owner directly and it frequently does not come with warranty periods, thus has greater risk associated to it if the equipment breaks down.

As such, I would recommend only buying functional, strength or free weights from these sites.

You can find second-hand gym equipment on big general sites like:

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Or Specific Sites like:

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4. Dedicated Facebook Groups

There are even dedicated Facebook groups for buying and selling gym equipment that you can request to join and scan their feeds for bargain buys:

 

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PRO TIP:

  • If you’re planning to have cardio-based equipment, a cost saving factor is to have non-motorised cardio machines that do not require electricity to operate. When you have dozens of cross trainers, rowers and treadmills plugged in for 16 hours a day, this drives up your running costs substantially. 

STEP 7 – Gym Membership Costs & Additional Revenue Streams

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When starting your gym, your gym membership price should depend on a variety of factors. 

Let’s break these down:

The Level of Service you provide

As we discussed earlier in this article, the quality and level of services you provide will directly influence how much you should charge for your gym membership.

You may want one more than membership tier that has extra services included, but the membership cost should increase to reflect this.

A good example of this is Nuffield Health, where you have a basic gym membership option and their wellbeing membership option, which includes sessions with a Personal Trainer, physiotherapist or a physiologist. 

Contract Length & Usage

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You may want to set your gym up with a peak or off-peak membership type which have different costs associated to them. Additionally, you could have a rolling month by month price or a 12-month commitment price, which is diluted in cost in exchange for contractual commitment. 

Competition in your local area

Always factor your pricing in relation to your immediate competition. Focus on the gym types similar to yours as they will be competing for the same customers. Can you beat them on price? Or if not, can you add a service of real value and justify a much higher price.

The Demographic you’re looking to attract

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This is where you market research should come into play. 

If you’re looking to start a high-end gym, that is city centre based with a plush feel and extra value services such as towels with the membership, Personal Training and high spec equipment to target high end working commercials, your gym membership price should reflect this.

Margins & Running Costs

The most important part is that you need to financially plan for success.

You need to offset both start-up and running costs with gym memberships and additional revenue streams.

You need to add up all your running costs and then workout out based on your business model and facility size to see how many members you need to turn a profit. We will go in depth into this part in the financial forecasting section towards the end of this article.

Additional Revenue Streams

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When thinking how to start a gym business, an overlooked factor is often the value in secondary income streams.

These additional revenue streams can add huge value and, in some cases, make or break a gym. 

Here are some additional revenue streams you can consider for your gym.

1. Personal Training

Personal Training is actually the biggest secondary revenue streams for National gym chains.

Depending on your gym’s model, you could charge rent for Personal Trainers to operate out of your gym. How much you can charge in PT rent depends on your location, affluency of the area, type of gym, membership base and support you will provide trainers.

A good example of PT rent done well is Gym Box, whose Central London site, charges £1,200 a month to trainers in rent, with 42 trainers at their club, this means they make £50,400 a month, which is £604,800 a year with little to no overheads.

Pure Gym also have over 5,000 trainers in their gyms, who pay around £400 a month average in rent, meaning they make around 2million a year in gym rent.

 2. Supplements

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You could sell supplements to your members. If you buy supplements at wholesale value and then add a decent mark-up you can make good revenue from supplement sales.

Additionally, supplements have good shelf life, are easy to store, and if you insert shelves behind your counter they don’t take up much space either. You should pick supplements in coherence to the membership demographic, for example if you set-up a powerlifting gym, choose supplements that powerlifters would benefit from the most. 

3. Gym Clothing 

You could sell gym clothing or gym clothing that has been customised with your brand. Companies such as Team shirts or Gym Fuse can produce vests, tracksuits, hoodies and much more customised clothing.

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Gym members love gym branding and I’ve even got OriGym’s gym hoodie on, made by under armour. You can save space by hanging them behind your counter using pegs in the wall or by having an online e-commerce shop on your website.

 4. Sell Advertising in your Fitness club

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You can sell advertisements in your gym for related products or services.

Whether that’s advertising via digital boards, roll-up banners, email marketing to your membership base or radio adverts over your speaker system to your members. 

We advertise our Personal trainer courses via these exact methods as you will have what we want, customers who perhaps want to turn their passion for fitness into a new career.

This income stream is often overlooked, which when considering it costs the gym nothing to implement, means you might be missing out on revenue.

 5. Venue / Studio Hire

You can hire out gym space in your gym to third parties. For example, if you have a studio you can hire this pace out to independent trainers that perhaps want to run their own fitness or martial arts class. See Here the Warehouse gym actively promoting their studio hire via their webiste to increase revenue:

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If you’re not planning on setting up a gym with a studio, no problem, you could allow Colleges and Training providers such as ourselves to pay to run our courses from your gym floor.

We run our fitess courses from 14 third party gyms across the country all of which we pay a day rate to the gym and better yet, it costs the gym virtually nothing in overheads.

This image is from a practical workshop run from the gym “The Lab”, a private venue we use to run course from on weekends:

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A standard day rate is around £150, but since we use their facility and many others every weekend all year round, this means they get £15,600 a year from us with no overheads, just pure profit.

6. Locker Hire

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Locker hire is another secondary revenue stream you may want to consider when thinking of how to set up a gym. You might opt for no lockers at all to save space or allow your members to use them for free, but another option is to charge a flat monthly fee for those who want to leave items overnight.

The standard locker hire cost would be around £30 a month, working out at £1 a day.

These are just some of the options you should consider, but you also have other routes, such as room space for physiotherapists or massage therapists to rent, if you have a premium class that you want to charge for separately to the membership or perhaps online educational seminars that you can run via your website. The list of opportunities is almost endless. 

When starting a gym from scratch, you need to outline these secondary gym income streams into your gym business plan and plan projections.

 

STEP 8 - Recruitment

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One very key factor when evaluating how much would it cost to set-up a gym comes down to the volume of staff you need to support your services and the expected salary of those staff members in relation to the ­­number of members you aim to have and cost of the membership.

Staff you may need to pay include: 

  • Receptionists – if you run classes or inductions, how are they going to book these, who’s going to let members into the gym, sell products and welcome members.
  • Sales staff – who is going to tour prospective members, follow up on website enquiries or free trials.
  • Operations & admin staff – who is going to enrol process paperwork for new members, pull off reports or handle complaints.
  • Gym Manager – who is going to manage the staff and run the business day-to-day
  • Trainers /Coaches – you might opt for paying your trainers and coaches if your services require it or if it adds a better customer experience.
  • Class Co-Ordinator /Fitness Manager – Who is going to manage classes on the timetable, the instructors or take accountability when an instructor does not show up.
  • Marketing – Who is going to drive people to your gym, website and mange your branding and social media pages.
  • Agencies– You may need to use agencies for things like web development SEO and PR to fill gaps in your marketing skill set.
  • Professional Services – You will need an accountant to manage your books, process VAT returns and annual tax.

The more restricted the services you offer, the easier this process is. For example, if you’re looking to start a 24-hour gym in a warehouse facility, where members are just paying to utilise the gym equipment, you won’t need many staff to run this facility.

This is why Pure Gym, JD Gyms and The Gym Group can charge so little per month, as they do not require receptionists as they have auto swipe in systems, operations staff or sales staff as all their sales are done online and all their trainers are freelance, meaning they are not burdened by high salaries each month. 

PRO TIP: If you’re starting a gym with small capital for staff recruitment and job adverts.

You can partner with a local training provider, like ourselves to offer their graduates a guaranteed interview directly after qualifying in exchange for them sending all their local graduates to you. We have partnerships with dozens of privately owned studios and gyms that we send our graduates to as it helps us sustain our commitment to our students that we will help then post course into the industry.

Another little tip to save money is to use job site Indeed over other job sites as they allow you to post one job advert for free. See our job advert that we put up for free on Indeed for a Personal Trainer in West London. This generated 217 applications.

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STEP 9 – Other Gym Start-up Costs

As part of the costs to start a gym there are some other fees you need to be aware of, that impacts your gym or personal training studio. 

1. Legal Costs to set up a gym

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Legal costs for any business are inevitable. Most are just one-off costs, others are costs that need to be paid as and when you update your services. 

Here is a breakdown of potential legal costs that your gym may need to prepare for: 

  • Solicitor fees for Venue acquisition
  • Membership contracts
  • Trademark for you brand name and logo
  • Registering your business
  • Terms and Conditions
  • Service Level. Agreement
  • Privacy policy for your website
  • Pre-exercise questionnaire & liability waiver
  • Staff Qualifications such as first aid courses 

PRO TIP: Registering your business trademarking your brand is easy to do. Do not pay out for a solicitor to do these actions for you as it can costs thousands when in reality it could cost you as little as a couple of hundred pound if you do this yourself.

For all other legal documents, pay a solicitor to this for you and if you give all the work to one solicitor you generally can get a discount on their services and time.

2. Security

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You need to allocate some cost towards security of your premises.

The level of security you need depends on the venue, the amount of cash that flows through your business and the value of the contents of your gym.

On top of that, you need to ensure your security matches your insurance requirement, otherwise if you need to make a claim, you might be found that your claim is invalid.

Basic security you could get:

  • CCTV
  • Locks on doors & Windows
  • Alarm System
  • Software security
  • Safe

Security systems are to prevent and deter financial loss, and should be used to protect your gym from fraud, theft and any other illegal practices that may occur on your premises from both staff, members and the general public.

3. Gym Insurance

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You will need insurance to run a gym, this goes without saying.

Gym Insurance will cover your staff, your building, equipment damage, your staff, as well as external factors such as the COVID-19 pandemic.

You can get gym insurance from fitness specific insurance brokers like Insure4sport or Sports cover Direct or more general companies like Protectivity, just ensure to shop around and get the best deal for your gym.

Running Costs:

Running costs are just cost that you spend regularly to sustain your gym, for example your lease and insurance would be a running cost.

But there are a whole host of other running costs you need to plan for and include in your gym business plan, including:

  • Lighting, heating & plumbing
  • Supplies & equipment maintenance
  • Equipment lease payments
  • Salaries & uniform
  • Advertising, marketing & website development
  • Professional services like accountancy
  • Credit card / terminal payment fees
  • Software, phones and internet
  • Payroll
  • Cleaning supplies
  • Health and safety license fees
  • Tax and VAT

We’ll be coming back to running costs shortly when we finically plan our gyms success.

Step 10 - Marketing & Advertisement & Pre-selling

You have now paid out costs for a venue, to equip it and all the logistics mentioned in this article to get it ready for launch, but you must leave some cash left over to promote it.

In the months running up to your gym opening you should start the pre-selling process. 

See here how Pure Gym are advertising their new gym in Bracknell months before its due to even open:

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How to Pre-sell your Gym

The aim of the pre-sell is so by the time your gym doors open, you have a foundation membership base already there and income is flowing into your business form day 1.

Normally when pre-selling you give an extra incentive to the member to sign up prior to the gym opening, whether that’s a reduction in membership price for the first 12 months, no joining fee or an extra benefit that is just for those who sign up prior to the gym opening.

Using our Pure Gym Example, you can see they have reduced the membership cost from their typical £15.99 to £12.99: 

“PureGym is currently offering memberships for £12.99 per month for a core membership at the gym in Bracknell for the first six months ‘for a limited time.”

Most Anytime Fitness franchises will open their doors with over 1,000 members already signed up, which based on their average price of £30 per month is £30,000 a month in revenue that the walk into when the gym opens. 

Setting up your Gym Marketing and Advertising

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As your sorting out the logistics of your gym, you should simultaneously be setting up the essential marketing foundations such as your website, and social media profiles. 

Public Relations (PR)

Local PR is critical to generating awareness of your gym in your local area online.

By creating a press release and ambition statement and sending out to local newspapers, and fitness specific sites cannot just help with your SEO and create awareness locally, but actually drive traffic to your website.

See here how Pure Gym in Bracknell has featured in the Bracknell live newspaper below:

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Leafleting / flyers

You can create flyers or leaflets and strategically flyer your local area door to door, in high footfall areas and local business’. See here how Pure Gym has created flyers for their Stockport North branch:

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Local Radio Adverts

Another way to promote your gym or Personal Training studio is to advertise via local radio stations. Have a clear call to action on your radio ads of what you want the listener to do. Whether that’s to call, go to your website or text a promo code.

Google my Business / Bing listing

One of the first thigs you should do when starting a gym to is get your Google my business listing set-up. Its free and drives people local to you searching for exactly what you sell to your website.

See here how Pure Gym has set-up their Google my busines listing in advance to their gym opening and it is already showing in the search for “gyms in Bracknell” on Google’s snap map for those looking for a gym in that area:

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Google ads / Bing Ads

If you have already done the leg work to get your website up and running, you can do geo-location Google ads to drive customers to your website and pre-sale offer page. 

When we’re looking for a product or service, what do we all do? Google it! In fact, Google has over 75% of the entire worlds traffic on one website, meaning Google ads are a must!

See here how Pure Gym in Bracknell is driving people searching for a gym in Bracknell even before the gym has opened.

With Google ads you can target set keywords or phrases that people are searching for online to show your business right at the top of the search engine. In this example, Pure Gym have adverts running for “Gyms in Bracknell”, but they would also have adverts running for hundreds of other phrases similar phrases, such as “cheap gym in Bracknell”, “large gym in Bracknell”, “fitness centre bracknell’, to name just a few.

Facebook / Instagram Ads

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Before starting a gym business, you can run local social media adverts via Facebook or Instagram.

Facebook has more data on us than any other website, which from a marketing perspective is great as you can target your ads to your ideal customers. You can target your exact target market based on their location, likes, interests, marital status, income and much more. 

With Facebook ads, you can drive people to your website, get enquiries to your inbox, generate comments, leads on Facebook itself or video views:

 

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See here an example by Pure Gym, targeting me down my Facebook feed to “learn more” by heading over to their website:

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There then trying to entice me in to join with a £0 joining fee and to join now on this limited time offer:

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Gym Business Plan & Financial Forecasting

In this article we have discussed a series of possible income and expenditures that’s starting a gym will incur.

Before your start any wheels in motion, you must document and plan for your gym’s success by creating a gym business plan and forecasting for your gym’s financial projections. 

A simple and cost-effective approach is to just use Microsoft excel and have one column for start-up costs, one column for monthly expenditures and then 12 columns, one for each month of the year for their anticipated income. Just label them January through to December:

Using all the points listed in this article, start by populating your gym start-up costs column.

This should be any costs that you incur to get your gym business off the ground, whether its venue deposit, gym equipment and building repairs, all the way through to your security cameras and banner and signage. These are your one-off costs to get your gym up and running. 

Now fill in your expenditure column, this is your costs you need to pay out each month such as:

  • your gym insurance
  • staff salaries
  • bills
  • advertising
  • lease and busines rates.

Finally, you need to fill in your income columns with predictions or forecasts of what income you will receive from the services you are going to provide, this includes your gym membership and different membership tiers if you have them, and any other secondary revenue streams that we discussed earlier in this article, such as:

  • selling advertisement
  • supplements
  • locker hire
  • Personal Training

The first income column is going to be your opening month and hopefully if you do a pre-sales process, you will already have some membership foundation and income flowing into the business the day your gym opens.

For example, let’s say you are planning to start a gym in January and are aiming to get 300 members signed up on a pre-sale offer of £25 a month.

300 X £25 = £7,500

This would go in your first income column for January.

Now for the remaining months set financial objectives and projections of what you’re aiming to achieve.

For example, it could be that you’re aiming to make a 100-member net gain in your first month at the now standard gym membership price of £30 a month, which brings your gym membership income to £10,500 a month.

Ensure to factor in member attrition, that some members may leave.

Repeat this process for all your revenue streams for each month for 12 months.

For example, if you plan to have Personal Trainers rent gym space at £400 rent a month and in your first month you aim to just get 1 trainer onboard, then £400 would go into the projection column for Personal Training. Then if you plan to increase this to 4 trainers by the end of your second month then £1,600 would go into this column and so forth and so forth.

Projections and forecasting allow you to stay focused, set yourself goals and see when your business can start beating the running costs, start recuperating the start-up costs and making profit.

Many gyms and other businesses evaluate and adjust their pricing strategy at this stage as once you have totalled your expenditure and income columns, you may see that you need 3,000 members just to break even as the gym membership price is simply too low to support your overheads or that the venue is too small to support enough members past the 3,000-member mark. 

This is why you must calculate:

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For example, removing secondary income streams from the equation, if you set-up a 2,500 square ft gym and your running costs are at £8,000 a month and you plan by after 6 months of being open to have 400 members, at £20 a month, which equals £8,000 a month in membership income, you have broken even before tax and VAT.

 

But if your gym only has the room for an extra 200 members before it reaches health and safety capacity and you hit this in month 12, that only leaves a 4,000 a month profit, before  you’re going to have to pay tax and VAT. This would indicate your gym membership price is simply too cheap in relation to running costs and venue size.

By upping the price to £30 a month that would bring you £10,000 a month profit before tax at capacity making the business far more financially viable. 

Let’s look at another example for a bigger gym. Let’s say you opened a 14,000 square ft, 24-hour gym. The running costs total £17,000 a month due to the venues size and you charge £15 a month and aim to hit 700 members after 6 months that equals £10,500 and a gross loss of £6,500, before tax and VAT.

 

By month 12 though you aim to hit 1,200 members, you would now have passed the break even mark with £18,000 income and £1,000 profit before tax and VAT.

 

But since this is a large venue and has the capacity to support up to 7,000 members, this pricing model works really well, despite the huge running costs as the venue capacity is far larger. If you then built this gym up to 4,000 members by month 18 on the £15 a month that’s £60,000 in gross revenue, leaving you £43,000 a month in profit before tax and VAT.

 

This is why isolating your running costs, assessing your venue capacity and forecasting is critical when starting a gym. The gym membership price you set first and foremost needs to be economically viable.

 

Setting up and running a gym requires extensive planning and hard work, but the rewards can be not just very lucrative but extremely emotionally rewarding.

 

CONCLUSION

 

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Written by Luke Hughes

CEO and Co-Founder

Join Luke on Facebook at the OriGym Facebook Group

Luke is the CEO and Co-Founder of OriGym. Holding a first-class degree in Sport and Exercise and an MSc in Sport and Nutrition, he is also qualified as a Level 4 Personal Trainer with various specialist credentials covering the entire spectrum of health, fitness and business. Luke has contributed to a variety of major industry publications, including Men’s Health, Women’s Health, Daily Telegraph, The Guardian, Metro, Cosmopolitan, The Mirror, The Sun, The Standard and more.

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