There's a positive correlation between earnings and gym membership, with higher earners more likely to spend more time at the gym. That means there's a bulletproof market for anyone looking to open a gym who has the talent and skills to differentiate themselves from the rest.
However, gym startup costs need to be realistically determined to ensure that you don't go out of business before you build up your customer base.
Here's what you need to know to keep track of those costs and to keep them down.
Write a Business Plan
While it might seem like a lot of pressure to take on when balancing the other elements of opening your gym, a business plan matters. Taking on this time-intensive and even daunting task is essential for ensuring that your business can grow and mature.
Your immediate goals are sure to be all about how to get your business off the ground. However, your long-term plan should be in the DNA of your day-to-day activities.
If you're going to need cash outside of your wealth to get this gym started, investors will want to see a plan. So not only do you have to write the plan but you have to make sure it lines up with the goals of investors.
The kind of research that goes into putting together a strong business plan will ensure that your gym succeeds beyond the start-up phase. When you look at the market, the local geographic region, potential customers, and costs before launch, you'll be well prepared for hurdles to come.
Make sure you also look into the costs of setting up essential machines.
Talk to a trained professional or do your own online research to ensure you're ready to present your business plan from day one.
Financial projections are a big part of any business plan. Financial planning ensures that you don't blow all of your funding just to get the doors open. Once the doors are open, you have to keep the lights on.
Plan your monthly expenditures, get your break-even figure, and monitor your cash flow and how it could line up with these figures. Make sure that your startup costs and expenditures sound realistic. It's always better to assume you'll spend more, at least at the start.
Once you get real financial projections laid out, you can start investigating where some of the fat may be. Trimming off some unnecessary costs will ensure that your business won't make any costly financial mistakes.
Take the time to write out some worst-case projects as well as your best-case projections. While assuming that you can get x-number of customers based on your research is helpful, it's always possible that you'll get next to none.
Don't Do Everything
The number one mistake that every start-up owner and small business CEO makes is when they try to do everything. While you might think that you know everything about how to make your business succeed, trust in the talent of others.
Not only is the actual running of the gym going to require help, but you'll need help with the technical stuff too. Negotiating your lease, setting up your company's financial plan, and keeping track of spending and accounting is not easy. Most of them can easily become full-time jobs.
If your money is tight, you can outsource tasks online. Some can be offered to friends and colleagues in exchange for their skills. However, you should find people who you can pay to do the work, because if you don't get a permanent solution, you'll certainly pay for it later.
Start Your Financial Foundation
Your infrastructure is going to be built on cash flow. You need outreach that results in dedicated membership to ensure that you have a stable cash flow for years to come.
Don't offer memberships without contractural obligations. If your subscribers all pull out, you'll be up the creek.
Annual pre-paid memberships or month-to-month subscriptions should be flexible enough for gym members without ruining your business. You need to project future revenues or to count on money coming in beyond month-to-month.
You won't have enough money to cover expenses if you don't set up a permanent base. Your contracts ensure a stable flow. Automatic payments can help you set up a strong base. This way you'll be bringing in money even when members are taking a short break from their regular gym routine.
You want to be around when they come back to get in shape.
Watch Your Finances
To keep your gym start-up costs low, you need to look at your operational and your financial metrics. The way that revenue and expenses are impacted by operations will define how well you succeed.
Use data tracking and analytics tools to measure your performance and watch the performance of competitors as well. This ensures that you set reasonable expectations along the way, beyond your initial planning phase. There is business software made for gyms and other health-related businesses.
They integrate with your invoicing and payroll software to ensure that you're managing all revenue streams from a central location. When you keep track of what's coming in, what's going out, and what you can project to make in the coming months, you can grow at your own pace.
Gym Startup Costs Are Easy to Manage
The most important thing when managing gym startup costs is to make sure that you're always bringing something in. So long as there's income coming through the door, you should never have a major issue with keeping your gym open.
To save even more on costs, check out our guide to buying used gym equipment and how it can keep costs down.