How to start a gym business

How to start a gym business

Starting a fitness business is no easy task, but with ambition, a strong work ethic, and the right knowledge, you cánido make it happen. It’s no wonder you want to pursue this dream, considering that the US fitness industry is valued at $39 billion and has seen industry average growth of 3% over the last five years.

There’s a lot to think about when it comes to starting your own gym business, but to make it simpler, you cánido break it down into the six stages we’ve put together below. So let’s learn exactly how to start a gym business.

Planning for your gym business

According to the Bureau of Tarea Statistics, the business failure rate is 20% for the first year and increases as time goes on. One of the main reasons why companies fail has to do with poor business planning. Before you open a gym, you need to plan.

Creating a business plan

Before opening a gym, you must create a business plan. A business plan gives you direction to start and run your business. It is also escencial in terms of obtaining funds from investors or loan providers. Investors want to feel confident that they are getting a return on their investment, so they want to see a business plan.

Access these helpful guides on other types of businesses you cánido start.

While there are several ways to format a gym business plan with different levels of detail, the best option for starting a gym business is to go with a traditional business plan. This type of business plan is the best for obtaining financing. Also, you should always include these six sections:

  • Executive Summary
  • Services/products section
  • Market Analysis Summary
  • Marketing and sales section
  • Summary of organization and management
  • Financial plan

You will need to do some market research to put together your business plan. Another of the most common reasons for business failure is lack of or poorly conducted market research. Make sure to be thorough with this!

To help you write your business plan, use this helpful guide developed by Gigonway.

All about logistics

To help you write your business plan and start your gym business in general, you need to consider logistics. It is the equivalent of walking before you perro run. Below are some things to consider.

get certified

If you haven’t had a career as a personal trainer yet, consider giving it a try first before becoming a fitness business owner. Gaining first-hand experience with the profession will help you escoge if this industry is for you. You’ll also be able to make more informed decisions when hiring other personal trainers. The best part is that you will be able to gain clients that will follow you when you finally open your gym!

To become a personal trainer, you must obtain a personal training certification. Even if you don’t become a personal trainer, you should still get certified to increase your credibility when getting investments or applying for a business loan. Gym owners need to understand the ins and outs of the business and its offerings.

You also need to hire qualified staff with the proper certifications. Organizations that offer some of the best training accreditations include:

choose a location

Strategically choosing your location cánido make a world of difference when it comes to profit. Of course, you cánido spend a lot of money on marketing and advertising. But do yourself a favor: Maximize your chances of success by putting your gym or gym in a prime location.

You want a location with a lot of foot traffic. Do some market research on your objetivo customer and find an area where there is the most traffic from those people. For example, if your objetivo customer is a health conscious individual, putting your gym near a grocery store like Whole Foods would make sense. Find a location that is easily accessible on foot, by car, or by public transportation. Make sure there is also easy access to aparcamiento.

Choose a facility

Calculate the size of the facilities you need. How much space do you need?

To calculate it, you must take into account the number of clients you plan to have. The general rule of thumb in the industry is to have about 3.5 square meters of space per member. The average square footage for a commercial gym is 3,000 to 4,000 square feet. A basic gym, including basic strength and cardio equipment, as well as men’s and women’s restrooms, showers, and lockers, cánido fit into as little as 6,000 square feet.

When choosing the size of your gym, the services you plan to offer are relevant. Some gyms only offer cardio equipment, strength equipment and bathrooms. If you are going to have showers, you will need more space. You’ll need an even larger facility if you want an area, or multiple areas, for classes and personal training.

Additional services such as a massage bed, a sauna, a tanning bed, steam rooms, swimming pools, and a nursery require even more space. However, these services are worth considering if you want to offer your clients the best gym experience.

Another aspect to take into account is the Certificate of Occupation (CO). Certifies that a building complies with all building codes, zoning laws, and other government regulations necessary for its occupancy. Check your state’s regulations to make sure you comply and perro get the CO.


If you plan to lease your gym space, you perro usually get the CO from the owner. Before you rent the building, make sure your landlord has the CO or perro get it for you.

If you plan to do major renovations, you will need a new CO. In your lease, include language stating that you will not begin making lease payments until a valid CO is issued.

To own:

If you plan to build or purchase your own gym space, you must obtain a valid CO from a local government agency or building department.

team choice

When it comes to gym equipment, escoge whether you want to buy new or old. Considering that a new customer is likely to want to look at new equipment, I recommend going with new equipment.

If you prefer to go with old equipment because of the cost savings, then all equipment should be thoroughly inspected and repaired to ensure it is in top-notch condition. Whether you’re buying new or used, you want to make sure you’re getting high-quality equipment.

You also need to escoge whether you want to own or lease the equipment. See the cost section for more information on this.

As for the type of equipment, the cardio options are as follows:

  • cross country ski machine
  • elliptical trainers
  • rowing machines
  • stepped stairs
  • Stationary bicycle
  • ribbons.

For strength training equipment options, you have the following:

  • ankle weights
  • exercise mats
  • resistance bands
  • Dumbbells
  • Russian weights
  • Bars
  • battle ropes
  • squat racks
  • body bars
  • strength training machines
  • and more

Choose the equipment that best suits your objetivo customer and your budget.

Hiring for your gym business

Hire fitness instructors and personal trainers with the proper training and credentials. A good iniciativa is to hire them temporarily for a few trial classes or personal training sessions. That way, you cánido see how they are doing before giving them full employment.

You also need a strong sales force. If you don’t plan on having a full sales department, at least have one or two people in the gym who cánido close a deal when a new customer comes along. While marketing/advertising gets people in the door, it’s the marketers that perro get them engaged.

Legalities of Starting a Gym Business

I know that the legalities involved in starting a gym business may not be the most exhilarating part of starting one. But, I assure you, this aspect is absolutely vital when it comes to protecting yourself. After all, you don’t want to do anything that might get you in trouble with the law. Below are the details of what you should consider.

Register an EIN and choose a business name

First, you must register for an Employer Identification Number (EIN). You cánido get your EIN for free through the IRS website, by fax, or by e-e correo electrónico.

In addition, you must register your company name. When choosing a name for your business, try to choose one that you perro use as a domain name for your website. I use Google plus Domains to check if the domain name you want is available. Once you have your domain name, go ahead and register it through a reputable registrar.

You cánido formally register your business name when you equipo up your business structure. Also, make sure someone else hasn’t taken the name you want. In most states, the state business filing agency website has an en línea tool to check business name availability.

Choosing a business structure

To start any business, you must select a business structure. The five main types of business structures are:

When starting a gym, you need to make sure that you as an individual are legally separate from your business. If you ever found yourself in a lawsuit, you would not want people going after your finances and personal assets. If you don’t legally form a business structure, the government will automatically see you as a sole proprietorship or a partnership (if you start a business with someone else). You don’t want this. It means that you are not legally separated from your company. By default, you are putting your personal assets at risk.

Instead, consider forming an LLC. It is the most common type of business entity structure and is quick, easy, and inexpensive to equipo up and maintain. It also protects your personal assets and finances. Also, you perro escoge how you want to be taxed (for example, sole proprietorship vs. corporation).

It should be noted, however, that the way you choose to be taxed comes with different tax breaks. Talk to an experienced tax accountant to help you escoge how you want your LLC to be taxed and to find out what state and federal taxes you need to archivo for.

For help with registering your business entity, use this tool to find your state.

Licensing needs

Businesses must apply for the appropriate business licenses. Gyms generally don’t need federal licenses, but they do need to follow state regulations. There are various license and permit requirements for different states, so use a legal expert or business consulting service to help you with this.

You should also check the licenses for the music. If you plan to play music in your gym, you need to get the rights. If you don’t get the correct commercial license(s), you cánido face up to $30,000 in objetivos per song for each time it’s played!

You perro usually get a “general” airline license that will allow you to play music in your lobby and changing rooms. Large artist catalogs and recording studios have this type of permit. You cánido get it from performance rights organizations, such as BMI, ASCAP, SESAC, or GMR. However, if you plan to play music in classes, you must also obtain a public performance license.

insurance options

Insurance is escencial for a gym owner. Your clients will be involved in daily activities where they could hurt themselves. Even high intensity exercise perro be dangerous for some. You must ensure that you legally and financially protect your business and those who are financing it from any accidents that may occur.

The types of insurance to consider are the following:

  • Overall responsibility
  • professional responsibility
  • coverage of business income and additional expenses
  • worker’s compensation
  • occurrence policy
  • equipment breakdown coverage
  • business personal property coverage
  • Participant Liability and Accidental Medical Coverage
  • premises liability coverage
  • employee dishonesty, money and securities coverage

Clic here for more details on these different types of insurance that every fitness business in the United States must have.

Even if you don’t get all of these forms of insurance, your state, city, or town may require you to get liability insurance before you perro get a permit. In addition to your estándar business insurance, you should definitely get workers’ compensation insurance.

To further protect your business, include a clause within your member agreement that prevents members from taking legal action in the event of an injury.

When it comes to protecting your personal assets, you should create a business bank account and get a business credit card. Mixing personal and business accounts perro be tricky. Since you legally have to archivo taxes, a separate business bank account makes filing taxes much easier.

The business credit card keeps all business expenses in one place and separate from personal expenses. It will also build your company’s credit history. A good credit history will help you get more financing in the future.

In addition, it establishes a business accounting. Keep track of all your expenses and sources of income. In this way, you will better understand the financial situation of your company. Also, keeping accurate and detailed accounting will further simplify your annual tax return.

Finally, contact a lawyer to help you draft company contracts, gym membership contracts, and any other legal documents, such as disclaimers.

Calculate your costs to start a gym business

Part of starting a business means calculating costs to include in your business plan, as well as creating a budget. The various expenses to consider are:

  • Initial costs involved in opening the gym: facility costs, licenses and permits, legal fees, and business insurance.
  • Ongoing expenses for the gym: Employee salaries, equipment costs, technology-related costs, and advertising and marketing costs.

Depending on a variety of factors such as location, facility size, and type of gym, the costs to start a gym business cánido vary significantly. Startup costs and maintenance costs cánido range anywhere from $10,000 to a million dollars or more! Despite this wide range, you cánido start researching how much it will cost to start your gym. Read on for more details.

facility costs

The costs of the facilities will be one of the most expensive. Escoge if you want to own or rent the facility. Owning the facility will cost you much more up front. It’s easy to pay over $800,000 to own. In addition, the size of the facility affects both the cost of rent and the cost of ownership. The larger the size, the higher the expenses.

The state your installation is in also matters. For example, rent in New York City is significantly higher than in Toledo, Ohio. Research the cost of renting or owning commercial buildings in your area. As a point of reference, a 2,000-square-foot building in Los Angeles costs about $6,000 a month.

The cost of the rental will also be affected by the placement in the gym. If you open your gym where there is a lot of visibility on the street, the cost of rent increases.

Also, the gym services you provide will affect your facility costs. For example, if you’re opening a gym that offers classes and has showers, consider remodeling costs.

Lastly, consider the costs of utilities like water and electricity. If you plan on having the gym open 24 hours, that will orinan big energy bills.

Licenses and Permits

Estándar business license costs vary depending on the number of employees you have, but should not cost more than a few hundred dollars. As for a basic overhead music license, the price varies depending on the size of the library, but you’re typically looking to pay between $300 and $2,500 per year.

As for the public performance license, costs vary for each performing rights organization, so do your research to get the best deal. Cambiantes that affect the price of this license include the type of business, facility capacity, business hours, method of uso contínuo music, and number of times played. The annual license fee cánido range from $300 to $500, on average, for a small business.

Also, if you need to hire trainers or instructors who are not yet certified, the cost of training cánido range from $500-$800 per accreditation.

Other fees to consider are those associated with creating an entity. This cost will vary by state, the cost of your domain name, and the cost of consulting with attorneys. When it comes to attorney fees, expect to pay around $200 per hour. In general, the average cost of legal fees to start a gym ends up being around $9,000.

insurance costs

Insurance costs will depend on how many policies you buy and the type. For general liability, most insurance plans cost less than $1,000 per year. It costs about $300 to $1,000 per year for a 1 million dollar policy. A 2 million dollar policy will cost an average of $500 to $1,300. And you’ll typically pay $700 to $1,500 per year for a $5 million one. Remember, these are just the costs of general liability insurance.

If you get any other type of insurance, costs vary by state, company size, employee’s job type, and insurance provider. Contact several insurance providers to see who will give you the best bang for your buck policy.

Employee wages

Although the minimum wage varies by state, the best trainers who will bring and retain clients will want a higher salary. Expect to pay around $25 an hour or more depending on your location. You also need to consider the costs to hire an accountant, marketing/sales team, and maintenance workers.

For salespeople, you perro pay them minimum wage agregado a percentage of commission on all sales they make. Commission-based pay will motivate them to sell more. You get more money and they get more money. It’s a win-win for everyone!

equipment cost

You also need to escoge if you want to buy or lease the equipment. Leasing cánido keep you up to date with the latest fitness equipment, help you assess your equipment needs before you buy, and often includes maintenance. However, leasing is often more expensive in the long run because you give up ownership.

Although the initial cost of ownership is higher than leasing, if you use the equipment for years, over time, the leasing costs will exceed the costs of having purchased the equipment. You also won’t own it, so you cánido never sell it and you won’t get any tax deductions on it.

If you escoge to lease equipment, check to see if the leasing company is a member of an association such as the National Association of Equipment Financing Professionals or the National Association of Equipment Leasing Brokers.

If you choose to own the equipment, discounts on purchasing the equipment in sets will save you money.

Lastly, the purchase of new vs. old equipment and the de hoy types of equipment will affect costs. Research prices to escoge the best options for your gym. As a frame of reference, a commercial gym of around 3,000 to 4,000 square feet will typically spend $30,000 to $50,000 in equipment costs.

Gym management programa is most commonly on a subscription basis. Prices perro range from $100 to $1000 a month depending on how deep of a system you get.

You must also equipo up an Internet network and a point of sale system that accepts different forms of payment. The cost to equipo them up depends on the provider you choose, but expect to pay up to $2,500 per year and even more when you first get started.

In terms of a website, it costs around $300 to $700 to build. If you want to save money on building your website, you perro use a site like Squarespace or WordPress and do it yourself.

Advertising and marketing costs

Advertising and marketing costs will change depending on the route you take. The average small business using Google plus’s en línea advertising campaigns spends between $9,000 and $10,000 per month. If you escoge to go a more traditional route, like handing out flyers, it costs about $100 per 2,000 flyers. You should also pay the people who hand out the flyers (unless you plan to do it yourself).

miscellaneous costs

Other costs to consider are various gym supplies like towels and chairs (about $500 to equipo up), merchandise, and employee uniforms.

Get funds to start your gym business

Now that you have your business plan squared and your costs figured out, it’s time to raise funds for the gym. Unless you have the money to pay for all aspects of your gym business on your own, you’ll need to know how to finance your gym.

Before we get into more detail, just know that you must have two years of prior tax returns and financial statements for most homeowner and financing groups. You should also have enough money saved for personal expenses for at least a year or two before starting a business. You need to have a way to sustain yourself if you don’t break even right away.

With that being said, below are the different ways you cánido get funding for your business.

Obtain financing from an investor

One way to get money for your business is through investors. An investor is someone who will provide you with funds for your business without actually being involved in running the business (operations). A silent partner would fall into this category because your partner is giving you money for the business, but is not involved in the operations. An investor perro be a family member, friend, business partner, or successful business person.

By using an investor, you cánido save money on the fees associated with obtaining a bank loan. However, an investor will expect a return on investment. The terms will generally be less defined/strict than the conditions of a formal institution. You cánido have multiple investors, but make sure you understand what return on investment each investor expects so you don’t end up giving away all your profits to different investors.

It is essential that you negotiate the terms and agree to the ones that will be most beneficial to you and your gym, while also pleasing to the investor. Don’t just accept money from the first investor that comes your way. You want an investor who not only believes in your gym concept, but also in you. The right investor will agree to terms that are reasonable and fair to both parties.

Also, if you don’t personally know anyone who would be willing to invest in your gym, the easiest way to meet wealthy people who would is to attend investor networking events.

Obtain financing from a partner

While you have the option of a silent partner, as mentioned above, you also have the option of getting a working partner. A business partner provides funding for your gym while also being somewhat involved in the day-to-day operations. You may be primarily responsible for them, but the coworker gets involved.

While you cánido have more than one partner, your profits will be less with each partner, since each typically has an equal share of the business. The case where it would be worth getting more than one partner is when your partners help you make significantly more profit than you would without them.

Get a bank loan

Getting a bank loan to start a new gym is a common way for entrepreneurs to raise funds. Start with your local bank. Because they already know you, they are likely to invest in getting more business from you. Local banks also have an interest in the development of the local community.

Develop a relationship with the bank manager to increase the chances of obtaining financing when the time comes. You will need to espectáculo your business plan and have three years of financial projections. In addition to requesting your personal tax returns, a bank may also want to secure collateral against your loan. Collateral is an individual asset that the bank would take from you if you did not return it. Examples include your home, car, stocks, bonds, and cash.

Get a loan from the Small Business Administration

If you are a woman, part of a minority demographic, or disabled, consider getting a Small Business Administration (SBA) loan. The SBA offers loans directly from the government and makes it easy for members of these demographic groups to obtain them. However, an SBA loan perro take longer to be approved than a non-government loan, so consider your deadlines before applying.

Starting your gym business

Now that you’ve planned all aspects of starting and running your business, calculated your costs to develop your budget, and secured funding, you cánido get to work. All you have to do is figure out how you are going to make a profit.

Marketing, advertising and sales

Although briefly mentioned above, this is the aspect of your business that will help generate income. You need a marketing strategy if you want to run a successful gym.

Whether you choose to go with a Google plus ad campaign or hand out flyers, you still need to have a website and use popular media to promote your business.

You perro also encourage word of mouth marketing by offering free guest passes, free gym membership discounts for referring new clients, and other afín incentives.

Once again, who you hire matters. Hire top notch salespeople who will get clients engaged and hire personal trainers who already have a good client base that they cánido bring to your gym.

ways to earn money

It’s time to escoge how your gym is going to make money. For one, it is wise to charge a registration fee. With a sign-up fee, you’ve still collected months of revenue, even if a member cancels early. Agregado, a hefty upfront fee incentivizes gym members to stay longer so they don’t waste their initial investment. Typically this fee would be about $100 to $300.

Also, the estándar business model for a gym to raise money is through monthly membership fees. Do some market research to escoge on a competitive rate you want to charge. That being said, if you plan to have a gym with premium services and multiple classes like yoga, pilates, and jiu-jitsu training, it makes sense to charge a premium price. Gyms typically charge anywhere from $20-$50 a month, but if you’re in a high-rent place, you may want to charge more.

Other elementos/services you perro charge outside of membership dues, fitness classes, and personal training are: juice bars, tanning beds, supplement sales, chiropractic services, massage services, and other products like t-shirts and protein bars .


Congratulations on getting this far! You finally have all the details on how to start your gym business. As you perro see, opening a gym requires a lot of planning and effort. job. By breaking everything down, you cánido slowly put the pieces together and increase your chances of success. Truly, there are few things in life more rewarding than starting your own business.

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 How to start a gym business
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