Creating a Business Plan for a New Gym
If you’re ready to open a gym, you’ve come to the right place. Whether you have an innovative approach to the average gym, want to open a space that caters to a particular niche, or just want more control, starting your own business is no small undertaking. But it is a smart undertaking!
When you open your gym, you’ll be supporting the fast-growing health and wellness revolution that’s occurring in the United States — and globally. In the U.S., there are more than 40,000 fitness centers with more than 64 million members, according to Statista. Globally, the fitness and health club industry surpassed $96 billion in 2019.
If you’ve heard the saying “If you fail to plan, then plan to fail,” then you know the first thing you have to do is research the industry and set up a business plan. Although this step may very well be the most time intensive (and at times boring) part of the process of opening your own gym, it is also the step that could make or break your business.
Step 1. Research the Market
Start by exploring industry and market reports that dig into what is trending with gym owners and members and what kinds of challenges the industry is facing too. IHRSA, The Global Health & Fitness Association, has many great reports on the fitness industry that dig into industry trends both on the member side and the owner side.
Understanding gym member sentiments and where the market is headed can give you the upper hand as you start planning out your gym’s mission and vision. Thanks to the pandemic, many surveys in 2020 and early 2021 found that people think staying fit at home is becoming easier and are buying the at-home equipment to make it happen too.
Although it’s possible your vision for the perfect gym is in line with what is trending up with gym goers, it’s also possible that what you have in mind is trending downward. Consider the following questions:
- Will your gym cater to seniors? Student athletes? Working moms? Veterans? Anyone and everyone?
- Are you focused on CrossFit, group classes, yoga, pilates, or women’s fitness?
- Will you offer a hybrid gym membership so people can work out in the gym or virtually — an industry that will hit $30 billion by 2026?
With insight into the industry, you can choose the best model for your gym and speak to member challenges, do more of what works, and more effectively stand out from the competition.
Step 2. Create a Business Plan
According to Entpreneuer.com, it can cost anywhere from $10,000 to $50,000 to start a gym. Whether you plan on going solo, seeking out a loan, or pursuing investors, you have to create a business plan to ensure long-term success for your gym.
Now isn’t the time to “play it by ear” with your vision. To get the most out of your time and money investment — and ensure you’re not throwing money at the wall to see what sticks — you need a fully fleshed out business plan. Mapping out and explaining how you’re going to get from point A to point B is what will help you keep tabs on success as your business grows.
Here’s a checklist for what to include in your business plan:
- Executive Summary: If you’re seeking out a loan or investors, you have to nail down a compelling business case for your gym. Think of this as an elevator pitch for the rest of the business plan.
- Market Research Findings: Explain why you chose the location and niche you did and what the competitive landscape looks like today and in the future.
- Marketing and Sales Forecasts: Create a financial forecast for the next three years and include some details about how you’re going to hit those goals with marketing. Include how much you expect to make, what your costs will be, the kinds of promos you’ll offer, how you’ll retain members, and more.
- Services and Products: Explain your gym’s cultural outlook, as well as the types of classes, memberships, and products you plan to sell at your gym. For example, your gym might be high intensity or more laid back and down to earth.
- Facilities and Equipment: If you’ve already picked out a location, describe the area where it’s located and what the space physically looks like. If you’re still trying to find the right location (see the next section), include the types of features you’re looking for in a location. Also include what types of equipment you’re planning to feature in your gym.
- Staffing: In this section, explain the organizational structure, benefits, and how many employees you plan on having. You can also include what types of certifications and training you’ll expect from your staffers. Remember: After rent, your payroll will likely be the biggest expense as a gym owner!
- Business Structure: Will your gym be an LLC, S Corp, partnership, or another type of entity? Whether you plan on running the gym yourself or getting a loan or investors, in this section you want to explain what type of business you’re running and what the ownership structure looks like.
- Financial Projections: As a newbie to the gym ownership space, this may be the most time-intensive section to fill out but also one of the most important. You need to have clear benchmarks and goals for your finances, from earnings to payroll to debts.
- Appendix: Include any market research, org charts, or financial information in the appendix.
If you found this guide helpful, you should check out our new e-book, The Ultimate Guide to Opening and Running a Successful Gym. From market research to choosing the right software to crafting enticing marketing campaigns, this guide offers step-by-step instructions for turning your gym dream into a successful reality. You can download it here