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How to start a gym in 7 easy steps

Corey Loehr
July 28, 2022
7 Steps for opening a Gym

Wondering how to start a gym or how much does it cost to start a gym? Opening a gym is a new and exciting adventure for any business owner. However, the questions and uncertainty surrounding "how to start a gym business" can be overwhelming. The good news is that starting a gym doesn’t have to be a stressful event. In fact, it can be one of the most beneficial and life-changing decisions you’ll ever make. Now, the burning issue is how much to start a gym?

Future gym owners wondering how to start a gym will be pleased to learn that you can open a fitness studio in a few simple steps. If you’re a hopeful gym owner wondering where to begin, start by following these seven steps.

Step 1: Consider your costs

The cost of starting a gym is one of the biggest considerations that future fitness center owners must consider. Initial startup costs for a gym can determine whether your business will succeed expectations or just miss the mark. As you prepare your business plan, you’ll need to consider your total expenses and start saving early to guarantee your gym is prepared to tackle any hurdles it encounters. 

In general, future gym owners should expect to save between $15,000 to $100,000. Although this may seem like a wide range, the final number ultimately comes down to your gym’s location, demographics, and financing options. Here is an accurate breakdown of how much it will cost for you to start a gym.

Gym equipment expenses

Your gym equipment cost will vary depending on your gym’s niche and the workout experience it expects to offer. Keep in mind that customers will not be interested in working out on outdated or damaged equipment. As a startup, you may not have the funds to buy top-of-the-line equipment right out of the gate. 

One budget-friendly option that gym owners should consider is renting gym equipment. This option allows you to try out various equipment styles to see which ones work best for you. If renting equipment isn’t an option, it’s important to determine which equipment your gym will want to invest in. 

As a starting point, here are several estimates for how much gym equipment may cost.

  • Stairmaster: $2,000-$4,000
  • Bench press: $200-$500
  • Elliptical machine: $1,000-$3,000

Payroll expenses

The people you hire plays an integral role in the success of your gym. However, employees won’t work for free, and to keep good employees around, you’ll need to offer fair pay. A small fitness studio should expect to hire 2-3 personal trainers, 2-3 desk managers, 1-2 fitness instructors, and 1-2 professional cleaners. 

While hiring desk managers, consider looking for young and enthusiastic talent starting their career in the fitness world. Hiring less-experienced professionals allows you to save money with their pay in exchange for the opportunity to teach them about the business. 

When hiring personal trainers, you should expect to spend slightly more. Professional personal trainers come with years of valuable experience and potential customers. Depending on their previous roles, personal trainers may expect to make $20-$150 per hour.

Gym upkeep expenses

Ensuring that your gym is kept clean and functional is necessary to attract repeat clients. Consider setting aside a separate fund for unexpected costs like equipment failures, floor damage, etc. The sooner you plan ahead, the more prepared you will be to tackle unexpected hurdles. Remember, your customers will create a routine with your gym, and if that routine becomes disrupted, they may choose to find another gym that handles malfunctions quicker.

Step 2: Research your gym financing options

Chances are, you don’t have $15,000-$50,000 sitting around to start a gym from the ground up. The good news is that gym and fitness center loans exist to help hopeful gym owners create the perfect center. If you’re thinking about financing your gym, you’ll need to keep some factors in mind.

Criteria for financing a gym

Most lenders will require gym owners to have some experience as a coach, personal trainer, or a fitness instructor. You’ll need to be able to prove to the lender that you have the expertise and motivation necessary to open and manage gym finances successfully

Lenders will also expect to see adequate market research. Keep in mind that areas saturated with gyms, fitness centers, and yoga studios have higher competition. Lenders may be hesitant to support a gym startup in an area inundated with the same type of business. If you find yourself in this situation, you can prepare by explaining why your business is different or consider venturing into a unique field of fitness.

Types of gym loans

Each gym owner will have different financing requirements and goals. Financing that works for one owner may not work for another. With this in mind, here are a few loan options you may want to consider.

Bank loans

Bank loans are a traditional financing option offering low interest rates and extended terms. Traditional bank loans usually offer rates between 1-5%, and term options can go as high as 25 years. If you have a high credit score, a bank loan may be your best option.

Small Business Association Loans (SBA Loans)

If bank loans aren’t an option, SBA loans are your next best bet. With an SBA loan, the lender agrees to cover a portion of the loss if your gym goes under. Because of the higher risk, interest rates usually fall between 6-8%, but terms can last up to 25 years.

Asset-based loans

An asset-based loan is a type of financing backed by a valuable asset, such as real estate property. If your gym is unsuccessful, the loan is repaid through the property that acts as collateral. These loans are higher risk for the lender, meaning interest rates can reach 10-20%, and loan terms are limited to five years maximum.

Cash advances

Finally, a cash advance is a great option for future gym owners looking to get financing fast. This option requires you to sell a portion of your company’s future sales to the lender in exchange for a lump sum. Think of cash advances more like a business transaction than a loan. A cash advance typically has shorter terms, ranging between six months to three years.

Step 3: Create a gym business plan

Creating a gym business plan is the foundation for a successful fitness center. What do you need to remember while creating an all-encompassing business plan? Here are six features that every business owner should account for within their plan.

What makes your gym special?

As the gym industry grows, so does the competition. Chances are, customers in your area have numerous options. Your business plan must include a brand strategy that helps your gym resonate with your future customers. What will your gym offer that makes it stand out from the crowd? Why should customers choose your fitness center over the others? Your answers to these questions will be the first step in creating a profitable business.

Where will your gym be located?

We’ve all heard the saying “location, location, location,” which couldn’t be more true when opening a gym. Future gym owners must analyze their local market to determine if their location is even capable of handling a startup gym. If your gym is founded in a rural area, you may have a harder time attracting customers than you would if you were in a city. 

Similarly, if you’re located in an area known for traffic jams and construction, customers may not be interested in navigating traffic just to work out. With this in mind, consider your location options and choose an area that offers convenience and potential growth.

How high is the competition?

You may be interested in opening a relaxing yoga studio, but if several studios are located just down the road, you may have difficulty attracting new customers. Your gym should bring something new to the area. Start by researching your area and analyzing the competition. 

What are their strengths and weaknesses? What can your fitness center offer customers that your competitors don’t provide? In this sense, it’s important to think like a customer rather than a business owner. If you were in their shoes, what would it take to attract you away from your current gym? Keep these answers in mind while curating your gym business plan.

How will you market your gym?

Creating a new business also comes with the challenge of spreading the word about your exciting new venture. Marketing your fitness center is an excellent way to reach a new audience, grow your gym membership, and increase your future revenue. 

Social media is a powerful marketing tool that startups can use to drive new referrals and spark interest. Develop an engaging social media business page where customers can interact and share posts with their friends and family while spreading the word about your business.

Do you have a comprehensive financial plan?

It’s important to incorporate your overall budget into your gym business plan. Create an estimated budget that includes costs for purchasing gym equipment, renting or owning a studio, and payroll expenses. Then, set aside a separate fund to safeguard against unexpected costs. Creating a comprehensive financial plan should always be included in your gym business plan.

How will you handle behind-the-scene work?

Once you reach the end of your business plan, it’s time to consider the smaller details on how to start at a gym. Will you be required to apply for permits? What type of insurance will you need? What will your interview process look like when hiring employees? These are just a few questions you’ll need to consider while finishing your business plan.

Step 4: Consider employee characteristics

You’ve considered your costs, obtained the appropriate licenses, and are in the final stages of opening a gym. One of the most exciting steps throughout this entire process is hiring gym employees. Your employees will be the first faces your future customers will encounter upon stepping inside your business. The people you hire will represent your brand’s values and goals, so hiring like-minded individuals is imperative. 

Before you can hire the right employees, you need to understand which roles are essential to a gym’s success and what characteristics define the perfect employee. Here are some essential traits you should look for during the interview process and before you consider how to open a gym.

Motivated general managers

General managers will do more than simply manage the day-to-day activities. Generally, they will be your frontline source for how your gym is operating and what needs improvement. From new customer tours to instructing new staff on gym protocols, general managers play an integral role in your gym’s daily operations. 

During the interview process, look for individuals that seem motivated and eager to take the lead. The perfect candidate will have a passion for fitness and the knowledge to back them up. If the candidate has experience with customer service or sales, this is a major plus. Your general managers should embody professionalism and excitement that will ultimately boost gym sales and revenue.

Lively instructors

Any fitness instructor you’re considering hiring should boast a lively spirit that keeps customers returning for more. As an instructor, these individuals will be responsible for developing confidence in new customers and tailoring classes that motivate your customers to stay fit. 

Depending on your gym’s niche, you may choose to hire yoga instructors, barre teachers, or Zumba dancers. Look for instructors with provable experience and a love for their work. Fitness instructors provide gyms with an incredible opportunity to offer unique classes and lessons that other gyms may not provide. Keep this in mind while choosing which type of instructors your gym will hire.

Inspirational personal trainers

Personal trainers are the people your customers will rely on to create workout routines tailored to their specific needs. Your gym’s personal trainers will do more than simply help your customers work out. They’ll know what motivates your customers to come to the gym, what fears they may have, and what they hope to gain by working out. 

Look for personal trainers that bring something unique to the table. How would they handle clients that have experienced personal injuries? How would they react to a client that isn’t meeting their goals as quickly as they hoped? Find personal trainers that embody your brand’s values while offering inspirational ideas that will keep your gym one step ahead of the competition.

Step 5: Interview and hire gym employees

As you prepare to hire the perfect team of gym enthusiasts, it’s time to consider what questions you’ll ask during the interview process. As you learn about your future employees, it’s important to consider their experience, how they fit into your studio, and their passion for fitness. 

During the hiring process, consider asking your candidates some of these fitness job interview questions to gauge their level of knowledge and determine the best fit for your business.

“What is your background, and do you have references?”

One of the most basic interview questions concerns a candidate’s background and references. All personal trainers and instructors should be able to obtain and provide proof of proper credentials and certifications. Asking for a list of references allows you to gain more insight into their personal life, previous jobs, and their experience in the fitness world. This simple step will enable you to determine early on if the candidate has the right experience for your gym.

“Why did you decide to work in the fitness industry?”

Each candidate will have a unique background and path leading them to work in the fitness industry. Some may have been active their entire lives, while others may have experienced a health scare that motivated them to take control of their fitness. The answer to this question will help you narrow down your list of candidates to those with values that match your brand’s.

“How do you motivate clients to meet their individual goals?”

The best gym employees will understand that each customer has unique goals, and each person’s fitness journey will not look the same. Instructors especially must realize that some clients may need more motivation than others. As such, instructors should have a plan to motivate clients to not only meet their goals but exceed them. If you interview a motivated candidate that already has creative ideas, this is a good indicator that they’d make a good fit for your fitness center.

“What makes you the best candidate for this position?”

This question provides your candidate with an excellent opportunity to discuss qualifications or experiences that may have been missed during a traditional interview. Find out why the candidate wants to join your team and determine what value they can bring to the table. A candidate with clear goals and expectations will translate into a future employee that can bring significant value to your brand.

Step 6: Consider additional revenue potential

Your gym can be more than a place for people to work out. Your fitness center can be used as a meetup spot for friends to get fit together or as a facility that offers healthy meal services. Selling food at your gym may seem like an overwhelming thought, but the truth is it can also lead to major returns. These are just a few ways your fitness studio can add additional revenue potential by selling food.

Construct in-house cafés

Although in-house cafés may have higher initial costs, their potential return is enough to create an entire side business. In-house cafés are a convenient and extremely enticing option your members will undoubtedly enjoy. Your café can offer a simple menu consisting of smoothies, pre-made salads, and healthy wraps. Most gym members will be looking for low-carb, high-protein options, so keep this in mind while stocking your menu.

Offer meal services

Prepared meals are a convenient and beneficial option for customers to take advantage of after a long workout. Chances are, tired members may not feel like going home and preparing a nutritious meal. Instead, consider offering frozen meal options that your customers can simply pop in the microwave and enjoy. This is a simple and effective way to generate additional revenue with a relatively low upfront cost.

Provide snacks

A simple snack may be exactly what your customers need to motivate them to continue on their fitness journey. By offering protein shakes, electrolyte-filled drinks, and protein bars, you’re allowing your customers the ability to quickly grab a small snack and add more nutrition to their daily meals. 

Avoid investing in unhealthy options like candy and soda, as this may give your customers the wrong impression. Place your healthy snack options in a convenient area that customers easily notice on their way in and out of your facility.

Create a meal planning service

If you are passionate about curating healthy meals, a meal planning service may be a great addition to your gym. You can also pair up with local dieticians to create custom meal plans that your fitness studio can promote. A meal planning service can be as simple as creating a recipe book online or as expensive as a meal prepping service delivered to your customer’s door. Meal planning options are endless and are almost always a guaranteed way to create additional revenue.

Step 7: Generate revenue through annual membership fee

Whether you are worried about how much does it cost to open a gym, already opened your gym or are preparing for opening day, it’s always a good idea to start planning for membership sales. Annual membership fees are a fantastic way for your gym to create sustainable and reliable profit. The best part is that you can realistically sell $1,000,000 in annual membership fees before opening day. This may seem like a stretch to you, but with the right tools and preparation, this kind of revenue is completely possible.

Start a gym by considering your worth

Your first step in creating significant revenue is computing the number of members you’d need to meet your projected goal. Start by considering how much you will need to charge in yearly membership fees, additional classes, and add-on products. For example, if you charge a $50 membership and your goal is to reach $1 million before opening day, you would need to make 20,000 sales. 

However, if your facility offers top-of-the-line equipment, stunning interior decorations, and world-renowned personal trainers, you may be able to get away with charging $500 per membership. In this case, you would only need to generate 2,000 sales to reach your $1 million goal.

Promote your business

As you gear up for the opening day, you must create a buzz around your exciting new venture. Consider offering “first month free” promotions or discounted class rates to increase interest in your fitness studio. Hop on social media to build the hype surrounding your business, and don’t be afraid to start promoting your business early.

Create a seamless sign-up process

Gone are the days when gyms required members to physically sign-up for memberships in person. By allowing members to sign up online, you’re offering them a convenient membership method that other businesses may not provide. 

Many people conduct business and engage with others online, so your brand must embrace this trend and use it to its advantage. With cloud-based booking, you can attract more clients and increase cash flow through your annual membership fees.

Final thoughts

Owning and operating a gym is an exciting adventure that few people experience. As one of the few, you have the ability and privilege to help your community get fit while increasing your revenue. By following these seven steps, you’ll be well on your way to successfully starting your own gym. 

Remember to do your research and consider your costs, and if you’re eager to generate more revenue, consider implementing additional features like an in-house café. Regardless of your brand’s niche, starting a gym is a fantastic business venture that can lead to future growth and the potential to make a genuine difference in people’s lives.