Imagine you have some saved money lying around and you decide to open a business of your own. What will be your business of choice? You could start a courier service, a trucking service, become a jeweler, become a wedding planner etc. If you are someone who has a passion for fitness, then opening a gym could be a good business option. Before you start any business, it is important that you do your research beforehand. And luckily, the fitness industry is a pretty lucrative business. The health and fitness industry has been experiencing a growth of 3-4% every year. The current worth of the industry in USA stands at a whopping 30 billion dollars. These stats have been reported by International Health, racquet and Sports club Association. An average US citizen tends to spend more than 150 dollars on fitness on a monthly basis and 112,000 dollars on an annual basis. A good portion of the US population includes people that are members of fitness and health clubs. Looking at these facts, it is obvious that starting a fitness business like opening a gym could be a solid investment. This article will have a detailed look at all the costs associated with opening a gym of your own.
Your startup cost
Starting a business is not an easy task. There are a lot of variables that you have to consider and you should also have a decent amount of money in your bank as costs can fluctuate due to changes in market prices. When it comes to opening your gym from the ground up, things are going to be more on the expensive side. There are a lot of factors that usually determine how much money you have to spend to launch your gym. If you are looking to open a small scale gym, then your expenses can be up to 50,000 dollars. For a normal sized gym, you would be spending around 65,000 dollars and for a mid-sized gym, you are looking at a bill of more than 1,000,000 dollars. Overall, you can expect the startup cost to be between 50,000-1,000,000 dollars. Costs usually vary due to factors like location of the gym, size of the gym and the kind of gym you want to open. A small cycling gym is going to cost you less than a multipurpose gym. With that said, let’s take a look at the number of things that you will be spending your money on while setting up your gym:
Location and facility costs
The first thing you need to sort is the location of your gym. The first step is recognizing your audience and pinpointing the place where there is demand for the services you are going to provide. If you are someone who is new to your line of work, then avoid locations where there are already competitors with a loyal customer base. Selecting the right area is important. Also this could also end up being your biggest cost out of your total expenses. The cost is going to depend upon the size the size of your gym and your state/city. Certain bigger cities tend to have higher rates for lands and properties than smaller cities. The next thing that will factor in your decision of land size is going to be the kind of gym you want to open. Your gym should have enough space for all the machinery and equipment that you are going to purchase. If you are intending to add yoga or cycling classes, then that will further increase the amount of land required. Factor in locker room and baths and a piece of land can cost you up to 800,000 dollars. This will be the case if you want to purchase the property right away.
Another thing that you can do is try renting a place instead of purchasing one. A place of 2,000 square feet can cost you around 6,000 dollars on a monthly basis. If you don’t want the hassle of starting your own gym from the ground up, you can try buying into a franchise. That way you could be a part of an established brand and won’t have to worry about your setup process.
So you have finally found the location and a property for your new gym. The next important piece of the puzzle is going to be getting your hands on gym equipment. Your gym equipment is going to consist of machines, dumbbells, barbells, weights, cycling machines etc. Once again, this stuff is going to be expensive. The amount of equipment you require is going to depend upon the type of gym you have to open. A small scale studio with an area of 1,500 square feet is going to cost you around 10,000 dollars in gym equipment. On the other hand, a commercial gym (usually occupying 3,000-4,000 square feet) can require 50,000 dollars of equipment. If you are planning on running classes or training sessions in your gym, then you are going to need make sure that all members have access to their own equipment. Do a thorough research of your surrounding marketplace so that you can get it for decent prices. Also buying equipment in sets is going to cost less than individual purchases.
Gym equipment is not going to be the only thing you will be needing to setup your gym. You will needing furniture, mirrors, towels, TVs among other things. A careful planning of your budget is very important when purchasing these things. Try to allocate a specific amount of budget for all kinds of purchases you will be making so that you can keep track of your expenses.
Licenses, permits and certifications
Acquiring licenses and permits is important for any business you might be starting and it’s no different for opening a gym. The first you will be needing is a business license. Depending upon a number of factors, you can expect to pay a few hundred dollars when everything is said and done. Next look into any health and safety permits that you may need to do your job. These licenses and permits usually depend upon and differ from state to state. So be sure to contact the respective authorities for this purpose. Also look to getting a professional certification. If you are a qualified personal trainer, then having a certification can be a huge boost to your business. These certifications can cost you from 500-800 dollars. Some organizations that offer these certifications include National Academy of Sports Medicine, American Council on Exercise, International Sports Sciences Association etc.
Legal fees and insurance
Setting up a business means having to pay for any required legal and processing fee that the laws govern. Some of these have already been discussed like paying for the business license. You also have to register yourself with the local authorities (sole proprietorship or LLC) and deal with trademark registration. You will have to go through a lot of legal stuff before you are ready to set up your gym. You can do this yourself or just hire a lawyer to deal with all the documentation. Once again, you will be needing a fair amount of money for this so factor this into your budget during the budget making process. Expect to pay 200 dollars on an hour basis or if you are trying to clear everything in one go, you are looking at a bill of 9,000-15,000 dollars.
Another thing that you need to do is file for business insurance. A business insurance helps small business owners in protecting their business setups. Owning a gym means exposing yourself to some degree of risks. Your machines may take some damage due to some reason or a customer can suffer an accident resulting in a serious injury. Your recovery from any of these mishaps is going to depend upon your insurance policy. You have to file for commercial property insurance that will cover any damages relating to fire, vandalism, theft and weather related property damage. This could cost you up to 6,000 dollars for a small sized gym. In case if you have any employees, you may have to pay for unemployment and compensation insurance.
Depending upon the scale of your gym, you may have to hire workers to handle various operations. So put an advertisement out there and let people know that you are hiring. Remember, a good business is built upon its workmanship and that eventually depends upon the employees. Put specifications in the advertisement to make it clear what you want form your employees. Make sure that you hire skilled and experienced people that are already familiar with ins and outs of your business. Every gym needs qualified trainers and some workers that look after the equipment. You can also hire business managers and accountants if you have the budget to do so. Keep in mind that top level trainers will come with the benefit of attracting new customers to your gym but they would be expensive. Also make sure that you have enough money to clear initial salaries as new businesses don’t tend to make much profit in starting months.
As you can see, there are multiple factors and variables that you have to take into account when opening a gym. Thus, your costs will vary depending upon the choices you make. Therefore, it is recommended that you do a thorough research, formulate a good business plan and prepare your budget before moving forward with your plan of action.