How To Start My Own Gym Business – If you’ve been toying with the idea of joining a gym, the first question you need to answer is “how much does it cost to open a gym?” In this article, we will break down these costs to give you a good idea of what you will be facing. Don’t be overwhelmed by these numbers. Remember that you will create a powerful income stream to offset these costs and bring your gym to reality. But as with most things, you have to spend it to do it!
The cost of opening a gym will vary greatly depending on where you are, the type of gym, and the equipment you want to fill it with. However, you should be looking in the $245,000-$400,000 range to open your gym.
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How To Start My Own Gym Business
In this article I will provide an overview of what it costs to give you a good idea of what your potential costs of opening a gym are likely to be. It is important to remember that, as well as your start-up costs, you must also consider operating costs. A good practice that many successful sports club operators have used is to have their operating cost base in the bank for the first 3 months before they open their doors.
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Your real estate costs are your biggest initial and ongoing expenses. The amount you spend will vary greatly depending on your location and the size of your facility. The average gym in the United States is 3,000 square feet. Depending on your location, you can expect to pay an annual rent of $15-30 per square foot per year. This works out to an annual lease of $45,000 to $90,000.
Commercial landlords often require a 3 to 6 month lease deposit as a security deposit. This money is held in a designated account for the landlord to use if the tenant defaults on monthly payments or violates the covenants.
If you choose to buy the property, you will need to pay a deposit to your lender of between 20-30 percent. Expect to pay between $35-50 per square foot. For a 3000 square foot building this comes to a deposit of between $105,000 – $150,000.
When it comes to equipping your new gym, your first decision is whether to buy your equipment or rent it. Leasing is an affordable option that avoids large upfront costs and allows you to regularly update the equipment. You also generally don’t have to worry about maintenance, as this is usually the tenant’s responsibility. There are also tax benefits in the US and leasing. Through the Tax Cuts and Jobs Act of 2017, lease payments are 100 percent tax deductible.
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I run gyms where I both rent and buy the equipment. If I had to do it again, I would rent. This experience was less time-consuming, more streamlined and the fact that the equipment was replaced every 2 years with new models made my gym look fresh.
You can expect to pay between $2000-$3000 per month to rent gym equipment for a 3000 square foot facility. Some lenders also require a monthly deposit
If you don’t plan to update your equipment regularly and don’t like the prospect of never owning your equipment, you can either buy your equipment outright or get an equipment loan. A rule of thumb for gym costs is $25 per square foot. So for a 3000 square foot gym, your equipment will set you back about $75,000.
If you decide to buy your equipment through an equipment loan, you will have an ongoing cost of $1000-$2000 per month (and you will pay interest). You should also set aside a few hundred dollars per month for equipment maintenance (remember, this is covered when you rent the equipment).
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As a commercial business owner, you will be subject to various license and permit fees. It is very important that you comply with all legal requirements from the beginning to stay on the right side of the local and federal authorities. Before you can open the doors of your gym, you must fill out the documents and pay for the following:
There may be other licensing and permitting requirements in your area, so be sure to do a deep dive with your local council. As a general guide, you should set aside $5000 for license and permit fees.
You must employ the services of a lawyer to process the lease or business sale and any other contract that requires legal treatment. You can expect to pay up to $200 per hour. I recommend an allowance of $2000 for startup legal fees.
You should also anticipate that you will need legal services on an ongoing basis, so it would pay to set aside about $5,000 per year for legal fees.
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When you get your construction key, you have a blank canvas. It probably won’t even look remotely like a gym. To finish your building, you need to spend some serious money.
To get a generic gym-ready building, you need to install showers, changing rooms, gyms, functional training areas, a reception area and snack facilities.
To transform what we call a full vanilla box building into a kick-ass gym environment, you should budget $35 per square foot. Based on the average gym 3000 square meters, that comes to about $105,000.
That’s a big initial investment. However, you may be able to negotiate some or all of the price with the landlord. Sometimes a landlord wants to absorb the full cost of the renovation for a little more in rent. Or the owner may be willing to pay half the cost of these improvements. Of course, you may have a landlord who doesn’t want to contribute to these costs, but you’ll never know unless you try to negotiate.
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At one gym I negotiated a lease for, I told the owner that I needed to spend about $60,000 on improvements to get the building ready to open and it would be better to go with another location that already had showers. . Rather than lose a long-term tenant, he’s offering 6 months of free rent!
For some of the top of the line, you need to invest in a quality point of sale system to seamlessly process payments and integrate the data into your software system. Your gym’s POS system should include a magnetic credit card reader, an electronic cash drawer, a mobile barcode scanner and a receipt printer. Your initial investment for POS hardware will be around $1400 with an ongoing monthly payment of around $100.
The monthly cost of the software depends on how many licenses you need. VendHQ, for example, offers a single iPad license for $99 per month.
But is a much more efficient solution. We offer a fully functional POS system and integrate large terminals and card readers. Instead of spending $1,400, you spend $300 or less in upfront costs, and everything else is included in your affordable monthly subscription fee.
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Most people who are thinking about opening a gym will already be experienced fitness trainers with several fitness certifications among the best. If you do not, I would recommend enrolling in a course with the International Sports Science Association. These courses cost between $400-$1000 and can be completed online.
You have to allocate money for brand signals. You need your signage to get attention and project the professionalism and wow factor of your business. To achieve this you should set aside $1000.
Another potential startup cost is employee uniforms. You have to decide if you want to go with branded uniforms. In my opinion, the extra expense is worth the extra level of professionalism provided by a smart uniform. For half a dozen employees, a simple uniform of track pants and a branded T-shirt will cost about $300.
Your gym needs to be supported by a responsive website. You can expect to pay around $700 to get a professionally built website.
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The salary you pay is determined by the number of employees you have. As a general rule, you should plan to hire one employee for every 50 members. Thus, a 1000-member facility will have 20 employees, including front desk staff, floor trainers, cleaners and sales and marketing staff.
Paying employees will be your biggest ongoing expense. Here are the current average salaries for key gym appointments:
If you have 20 employees, you should plan to spend in the neighborhood of $700,000 – $900,000 per year on employee benefits.
When it comes to personal trainers, you need to decide whether to hire them or operate them as an independent contractor. The IRS has strict guidelines as to whether a person should be an employee or an independent contractor. According to them, you should hire your trainers when…
Christina Kai Marks
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