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3 key blockers to fitness studio scalability in 2024

Chelsea Erieau-Larkin
February 20, 2024
3 key blockers to fitness studio scalability in 2024

In the last four years, businesses have transitioned from growth-heavy scaling strategies to capital-efficient scaling. As unstable economic perceptions took hold, investors became more wary - stalling investments, holding up pipelines, and prioritizing lean business models. The rest of the world has followed this trend. 

In 2024, we're left with more challenges than ever for scaling - but also more necessity for scaling than ever. At Hapana, we deal with huge studios looking to climb on the global stage, and we take pride in helping them reach those goals. Here's the key blockers we've noticed that come up again and again for modern businesses looking to scale. 

Blocker #1: Not understanding your Total Addressable Market (TAM)

At the heart of scalability is your Total Addressable Market (TAM). TAM represents the overall revenue opportunity available or market demand for a product or service if 100% market share is achieved. 

For fitness studios, accurately estimating TAM means analyzing the size and demographics of the population interested in fitness services, the penetration rate of existing fitness services, and potential market growth trends. We particularly recommend Beyond Activ’s comprehensive list of fitness studios.

Understanding your TAM is more than an exercise in number crunching; it's about realistically assessing the potential reach of your product or service. Have you evaluated the market size that is feasibly within your grasp? Misjudging your TAM can lead to overestimating your growth potential, impacting your scalability plans. This crucial first step sets the stage for your scaling strategy.

For example, during the pandemic, Peloton experienced explosive growth, driven by lockdowns and a surge in home fitness. However, as the world began to reopen, Peloton faced challenges due to an overestimation of continued demand for its products and services. This miscalculation can be attributed to an overestimation of their TAM, leading to excess inventory and a need to scale back operations. Peloton's situation could have been avoided with an ongoing, accurate assessment of their TAM to avoid overexpansion and align production with realistic market demand.

Why TAM Matters

  • TAM helps fitness studios identify the scope of their market potential and set realistic growth targets. It informs decisions about resource allocation, marketing strategies, and service offerings.
  • A clear understanding of TAM can attract investors by showcasing the growth potential of the fitness studio. Investors are more likely to support businesses with an ample and expanding market opportunity.
  • By knowing the TAM, fitness studios can gauge their current market penetration and identify expansion opportunities. This could mean opening new locations, targeting underserved demographics, or expanding service offerings.

Calculating TAM for fitness studios

Top-down approach

Start with broad industry data and narrow it down to the relevant market segment. For example, begin with the total global fitness market size and then focus on the specific region, type of fitness service, and target demographic.

Bottom-up approach

Estimate TAM based on product-specific data, such as pricing models and potential customer base within your targeted geographic area. This approach often involves more direct market research and can provide a more accurate reflection of achievable market share.


Blocker #2: Not knowing which component to scale

Regarding scalability, three critical components come into play: technology, people, and assets (such as housing). These elements are the backbone of your business, but they also represent the biggest hurdles to successful scaling, in that order. 

- Technology: Your tech infrastructure must meet current demands and be agile enough to adapt to future growth. Scalability issues often stem from outdated systems that can't handle increased loads, leading to performance bottlenecks.

- People: Scaling your team is about more than just adding numbers. It's about preserving your company culture, maintaining quality standards, and ensuring your team remains aligned with your business goals. The challenge lies in recruiting, training, and retaining talent that can grow with your business.

- Assets: For businesses reliant on physical assets, like housing or equipment, scaling can be particularly challenging. The capital expenditure required to increase these assets can be prohibitive, making creative solutions and efficient asset management paramount.

The biggest blocker here is often going to be your assets. Technology is easiest to scale, and people are a little less easy, but assets like your physical studio aren't all that amenable to scaling across the globe - or even the city. You're not alone: many of the most profitable industries, like real estate, construction or manufacturing, have the same issue. 

The most important thing is to figure out which component is standing in the way for your business and prioritize addressing that component first.

Technogym, a leading provider of fitness equipment and digital fitness solutions, recognized the need to scale not just their physical assets but also their technology component. By developing a comprehensive digital ecosystem around their equipment, including apps and online services, Technogym could cater to the growing demand for connected fitness experiences. This strategic focus on technology allowed them to scale effectively, addressing both the physical and digital needs of their market.

Here are some questions to figure out which component needs work:


  • If business tripled tomorrow, can your tech stack handle it?
  • Can your technology easily add many more classes, patrons, locations?
  • Can your gym management software minimize the amount of customer support your members need from real human beings? 
  • Is the cost prohibitive for scaling?


  • Is your employee model easy to scale? 
  • Are there systems in place for easy onboarding that don't take much time away from other employees who would otherwise need to teach them? 
  • Do you have a process for hiring that can grow with you and doesn't depend on just you or the executive team?  
  • Does your pricing model adequately cover all expenses, enabling a proportional number of employees to be hired based on the membership count?


  • For businesses reliant on physical locations, how adaptable are your spaces to increased demand? Can they be easily modified or expanded?
  • What logistical or regulatory hurdles are there? 
  • What is the cost of acquiring or leasing additional physical assets, and how does this compare to the expected revenue increase?
  • Have you considered less traditional models for scaling your assets, such as partnerships, franchising, or virtual services?

Blocker #3: Outdated legacy fitness software

Gold’s Gym, an iconic brand in the fitness industry, faced significant challenges with changing consumer preferences and the digital revolution in fitness. Recognizing the limitations of their existing gym management systems, Gold’s Gym invested in upgrading their technology to offer a more integrated and user-friendly digital experience for their members.

This included implementing Hapana - our modern gym management software that provides seamless booking, tracking, and engagement tools. By addressing the outdated components of their operational software, Gold’s Gym could improve member retention and attract a younger, more tech-savvy demographic. 

How Hapana can help with fitness studio scalability

Navigating through the complexities of scalability in 2024 demands a nuanced strategy. Gone are the days when simple solutions could pave the way for growth. The market, however, continues to grow - presenting more opportunities for those ready to adapt and evolve. At Hapana, we understand the unique challenges that come with scaling fitness studios in this dynamic environment. Our platform is designed to address these challenges head-on, offering tailored solutions that empower your studio to expand efficiently and effectively.

Whether you're looking to streamline operations, enhance customer engagement, or leverage data-driven insights for strategic decision-making, Hapana has the tools and expertise you need. Our comprehensive suite of services is built with scalability in mind, ensuring you can grow your business without the growing pains. 

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