How to Start a Gym Business?

How to Start a Gym Business?

Starting a gym or any health and fitness center is a lucrative opportunity for starting your journey into the business world. According to International Health, Racquet and Sportsclub Association (IHRSA), the revenue for Health, Gyms and fitness industry is totaled $87.2 billion in 2017. If we take the example of US health club members, there were 45.6 million members in 2008 and 60.9 million members were determined in 2017 which amounts to growth of 33.6%.    

As per “2018 IHRSA Global Report: The State of the Health Club Industry”, a global initiative is launched to reach 230 million health club members by 2030. However, before we move forward it’s important to understand that there’s no fixed route to success. The opportunity varies from place to place, hence it’s important to explore the possible business models, assess, compare and review the models before zeroing down on one. There are various interdependent factors that influence set up of a gym to a large extent which should be kept in mind.

Types of Fitness & Wellness Services

An entrepreneur can choose any one or combination of the following with respect to the factors like the preference of the target consumer, estimated cost and feasibility etc. The various options are:

1. CardioVascular Exercise- This type is considered as traditionally perceived exercises such as cycling, running etc.

2. Strength Training-It helps to build and maintain muscles in the body progressively by using weights.

3. Yoga and Meditation- A form of exercise which traditionally aims to keep the mind and body healthy and happy.

4. Aerobics- This includes stretching and strength based exercises followed by rhythm and fun.

5. Functional Training- This includes exercises that help an individual to maintain fitness and wellness so that he can perform routine activities of life smoothly.

6. Hot Yoga- Exercises that are performed under hot and humid conditions in order to increase the heart rate and profuse sweating which is popular for losing weight.

Business Roadmap

There are two ways in which you can start your gym. One is by starting your own gym and second option is to take franchise of branded gym. Then the success of gym depends on various things such as: to look for a place,  to find loopholes in the gym of competitors, to contact trainers and other staff members, to contact suppliers of workout machines and equipment, gym set up or layout plan and look for promotion strategies as well.

A major part of planning depends upon the judgment of availability of the resources also such as the supply of power, water, parking space, specialized human resource, etc. Another important component of feasibility is longevity that how long startup is going to survive. For instance: To study feasibility, probable traits of the gym that we would like to consider are:

  1. A gym floor with various types of equipment for workout. (Approximately 2,000 sq ft and above)
  2. Place with a high ceiling for Yoga and other health-related recreational activities.
  3. Swimming pool

Investment Needed

It is very important to understand the accuracy of the funds required for capital expenditure. Since starting a gym involves a huge amount of funds based on long-term planning as per the requirements of the target customers.

There are two types of costs: Variable Cost and Fixed Cost. To start the gym first most important requirement will be land or place, then exercise machines and followed by other assets. This is an example of fixed cost (huge investment for a long period of time). To train customers, maintenance, hygiene, power, water etc all are examples of variable costs. Both types of costs should be assessed beforehand for smoothness of further decisions to be taken to set up business.

Now as I have mentioned there are 2 ways to start a gym to budget also varies according to them.

Budget Needed for Gym Franchisee

Franchisee would require extra cost added usual business cost as we have to pay to the company for taking their brand name to start a business. For example: to open a gym in the Indian market with the brand name “Ozone”, an individual is supposed to pay approx. Rs 1 crores as a franchise fee and total investment go up to Rs 2cr including equipment and all.

Budget Needed to Start Your Own Gym

It would be wise to find the best possible alternatives to be cost efficient on the basis of the availability, quality, and durability of the goods and services. So if you are starting your own gym then the budget needed would be as follow:

  • Rent:   Rs 30,000 to 300,000 (per month)
  • Machines: Rs 15,00,000 to 70,00,000 (one time cost-fixed cost)
  • Interiors: Rs 500,000- 10,00,000
  • Salaries: Rs 300,000 to 10,00,000 per annum (inclusive of professional staff and maintenance staff)
  • Other expenses: Rs 300,000 to 10,00,000

And if you talk about returns, general waiting time is around 18 months to earn profits. So there is a requirement of running cost also for 1.5 years.

Legal Aspects

Every gym irrespective of the size of operations needs to be in line with the rules, regulations, and laws of the respective place of operations. To begin with, a business plan has to register under a preferred name with respect to the selected form of business model. Another important aspect is to decide on the form of business. The business structure usually tells about ownership of a business. There are various forms of ownership which you can choose as per your ease and understanding. I am mentioning 2 most popular form in India just as an example, but you can choose according to youself after consulting your attory.

1. Single Owner business- It is the most common and widely applied form in which the idea generator of startup will be the sole owner of a business and will earn all profits and bear all losses. In India, this form of business is popularly known as a Sole Proprietorship business.

2. Partnership- When two or more people join hands and become partners to get ready to share profits and bear all losses together according to capital invested by each partner.

After deciding the form of business, it’s a prerequisite to acquiring the various licenses so as to facilitate the smooth functioning of gym such as the license for using the property for commercial purposes, registration for water & power supply under the registered name of the business. You also need to take permission from local authorities. Also, you should analyze the political system of your country carefully to avoid further legal allegations.

Target Customers

In order to make your gym successful, one needs to target customers carefully. And the prime focus should be on potential customers such as:

  1. Sports Personalities: They are the most regular and loyal customers.
  2. Gym Freaks: They are crazy for fitness and ever ready to spend a penny on fitness.
  3. Housewives: Who usually remain free at home and getting out of shape.
  4. Sufferers: People who are suffering from some health issues.
  5. GenY: College going students fascinated by toned bodies and well-maintained muscles.

Hence, it is very important to understand what the target consumers think and understand about fitness & wellness, level of enthusiasm, and motivation prevailing in order to design the business marketing model. For this, we analyze the industry, city culture, demographics, facility costs, and the area’s competitiveness for health facilities.

Pricing & Membership Offers

To determine perfect pricing strategy is most important as it affects business profitability. Before setting the price you need to consider market demand, competitors’ pricing, company costs, pricing method and risk involved. Pricing differs from country to country due to different economies prevailing in different countries. Purchasing power is other important indicators for determining initial prices. It is very important to set the price according to consumer ease and company’s existence initially because only the right pricing strategy can help to achieve the following pricing objectives:

  1. Survival
  2. Maximum Current Profit
  3. Maximum Market Share   

In the case of the gym, the primary strategy for pricing is to consider the competitor’s pricing strategy. If you are new entrant you have to enter with pocket-friendly price, generally slightly lower than the competitor’s price. But if you are offering other new facilities like a sauna bath, swimming pool, yoga centers etc. then you can charge a good price. On the other side, if you are entering with a brand name such as Fitness First, Ozone, or Gold’s Gym then you can keep a high price which will provide you with a competitive advantage.

Professional Staff

gym trainer, gym trainer teaching

After crossing the initial hurdle of zeroing down the business plan and registration whereby the business officially comes into existence, the next important ingredient is the appointment of expert, dedicated and professional staff for the various roles such as:

  1. Fitness & wellness expert
  2. Diet & nutrition expert
  3.  Manager to look after the day to day functioning and the maintenance of the records of customers and types of equipment.
  4. Assistant staff (cleaner, security guards, technicians etc).

During the course, the owner(s) can act as managers and look after the operations so as to maintain a closer look, though this is purely on the discretion of the owners during the initial days it is recommended to self assist since the new born requires to be looked after and closer watch.

Required Certificates of Trainers

Hiring a fitness manager is quite a tedious task because one wrong hiring can spoil the whole business. Better is to get sure about the person by taking a few updates about his previous workplace before hiring him. Moreover, there are few qualifications which a fitness manager should possess:

  • Level 2 Fitness Instructor Qualification
  • Level 3 Certificate in Personal Training
  • First aid Certification
  • REP’S Membership
  • First aid certification

Also, if a person is qualified from either of the following institutes, then you can hire him or her without a second thought:

  • Indian Academy of Fitness Training(IAFT)
  • Gold’s Gym Fitness Institute(GFFI)
  • Certifies Bodybuilding and Gym Personal Trainer

Ambiance & Amenities

It’s the definition of the character and energy the place offers. If the place people come for fitness & wellness and then they find the synergy missing, it’ll be a major setback and would not be a motivational factor to look forward to enrolling and thereby the purpose would be defeated. As it’s truly believed that aura leaves a nostalgic impact in the minds of the people. Howsoever much one may think that it’s only the facilities, services and feasibility that would affect the success of the business. Ambiance carries the aura those synergies with the interest of the individuals and creates success stories. To facilitate customer’s convenience, we should add the following parameters as well:

  1. Parking area.         
  2. Locker rooms,
  3. Showers and sauna baths
  4. Office Cabin

Amenities are also one of the parts of ambiance. These are the desirable and useful features that determine the pleasantness and attractiveness of the place. It adds on to the ambiance of the place, these are add-on facilities such as cafe, spa and sauna bath, diet consultancy services, personal trainers, swimming pool, parking facility, hygiene, and warm hospitality. Different amenities can be added according to locality and customers expectations. These extra benefits should be provided when business is in a position to facilitate it well in terms of cost and promotions.

Equipment Required

A gym distinctively pivots on weight lifting and strength training. All types of equipment in a gym are designed for muscle training and strengthening. Weights, dumbbells and weight machines are sketched in a manner to develop and toughen muscles of different body parts. More often, one single machine is only attributed to a specific muscle in the body. A sizeable amount of muscle and machinery knowledge is required to purchase and use these equipment. Refer to the list of standard machinery that every professional gym must have below.

  • Dip Station
  • Battle Ropes
  • Bench press
  • Hammer Strength Machine
  • Incline Bench press
  • Lat Pull-Down Machine
  • Pec Dec Machine
  • Pull–Up Bar (Chin –Up Bar)
  • Dumbbells
  • Triceps Bar
  • Preacher Bench
  • Handgrip Exercise
  • Reverse Hyper
  • Plyo Boxes
  • Air Resistance Exercise Bikes
  • Stair Steppers
  • Ankle Weights
  • Leg curl Machine
  • Leg Press Machine
  • Leg Extension Machine
  • Hack Squat Machine
  • Calf Machines
  • Leg Abductions
  • Prowler
  • Vibration Plate
  • Power Rack

Although most gyms do offer cardiovascular equipment like treadmills, elliptical machines, exercise bikes, alternative motion exercise machines, rowing machines mats, steppers and stairs/climbers but the focus remains central to weight training.

As per the expanse of your gym setup, one fitness manager and the required number of fitness trainers or coaches are to be assigned to him.

Safety and Insurance

Be hazard conscious and have a trainer certifying in first aid techniques during an emergency. Make sure all manufacturer recommended checks are being made on regular basis. Keep the floors dry during working hours and show clear signs in case an area is being restricted. Light up the area with required lights and make sure it’s functional especially during the working hours.

No matter how much safety cautious you are, an injury may be possible. Keep all your liabilities insurance on, in current time by paying an early premium so that you have solid liability protection in case a customer takes you to court. It gets your business going even if any unsuitable event takes place.

Branding & Marketing

To enter the market and only informing your friends about your product will never work. You need to shout everywhere possible about your gym. Also, communicating extra benefit that you are going to provide to your target customer is very important to give a good luck push to a new startup. There are various methods of promotions to do the same:

  1. Invitation to referrals
  2. Fitness Magazine
  3. Newspaper Ads (local print media)
  4. Radio Ads
  5. Pamphlets
  6. Direct mails
  7. Coupons
  8. Membership discount offers
  9. 15 days Trial Period offer
  10. Banners in the main market
  11. Online ads on Facebook and Google
  12. Freebies like a sipper, protein powder etc
  13. Associating an affordable and reputed name with you, like Mr. State, Mr. City etc.
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