Anyone started a gym?

[WGPA]

Hi all,

As a caveat I'm just thinking out loud at the minute and have only done a little research so far.

I'd like to hear from anyone who has successfully started a commercial gym. I know my local area well and think a simple unisex gym would work well. The area in question has a town with secondary school of c.1100 pupils & 2 medium sized industrial parks as well as being just off a commuter road connecting a number of smaller suburbs to the main city.

Area has one very small gym @ c£45/month with very restricted opening hours and one a couple miles away which is quite upmarket at c£60/month which is opening shortly, but already has 1000 members registered.

In my mind I view it as very similar to pure gym with fairly basic facilities (minimal staff, simple reception/bookable hall/changing rooms/main gym split weights/cardio layout) but very low price (£16-20/month I'd estimate) with no long contract term. Keep it nice and clean/bright/friendly and clearly branded as a gym.

I'm not qualified in any fitness based activities (accountant by trade) but my main hobbies are in this area so I have an inherent interest in it.

I guess there are numerous potential pitfalls, but I'm genuinely interested in hearing if others have had success here?

I'd also love to know where/how to find suitable property? An office block approximately double the size I would like is advertised at £93k/annum, but I'm not sure how to determine what I can/can't use a building for! Also is there any way around signing a 10yr lease? Would obviously prefer a 12/24mnth term to test the water.

I've never run a business so things like rates etc. are also unknown - is there a resource online to pick this all up from? I know insurance, payment processing & IT will also be material outgoings.

Staffing should hopefully be ok as I have family who can help out locally as well as myself and wife.

Any advice or thoughts greatly received!

 

[candyman]

Interesting thread.
Good luck

 

[Rpl85]

Hi there... just wondering what area you're in?

Thanks.

 

[goodguy]

Never under estimate the cost of Business Rates and Marketing.
insurance you can get a quote quite easily( thing you need).

Pc from £400, web site £14 or £500. Payment processing is a sales cost which needs to be taken into account, but not the biggest issue).

The question is why do the others cost more, if you go for the low end of the market you be competing with the council lesuire centre facilities. Who staff and facilities are paid by the council. Who the tax payers must pay for, through domestic rates and your business rates, so can always under cut commerical facilities. And don't have to pay rent or business rates.

So if you go for cheap and chearful, these council can just under cut you, or just build on next to you.

The things commerical gyms can have an advange is, conveniance(Middle of exclusive area) or better facilites/reputation, and in this case why shouldn't you charge more. Business parks are better than industrial parks, different type of employee(BP before work/lunch time and early evening),(IP due to type of business, in the evening, weekends).

Get onto the street and do some market research, not just would you like another gym in the area, but see how many you can get to part with money. ie. joining fee(when they hand over the money, if they do, you can give the money back say they won a free membership) The point being, no commentment, people will just say yes.

Good Luck.

 

[WGPA]

Hi - thanks for the responses.

There are no local council fitness centres nearby, although there are a couple halls people can rent to hold classes etc. I appreciate they could open one however and cause a stir. Something I hadn't thought about.

Price point was chosen based on some research into the success others are having with similar models as customers enjoy the lack of joining fees and very short contracts/notice periods (Interestingly 2/3rds of people who leave such gyms rejoin). It also facilitates lower up front capex as you wouldn't need as many facilities (pool, sauna etc.) and opex as you can run on a skeleton staff without having numerous PT's on the books.

Also there are two gyms in the city side by side, one premium and one much cheaper. Both are successfully run despite being so close, it was them that got me thinking!

It was something I was going to monitor carefully and try keep the business nimble and reactive to clients. If there is appetite for another upmarket gym then develop to fill that niche. Area specific research like you say should be my next move, thanks for highlighting the importance.

I do web design in my spare time running a couple of blogs and a small ecommerce site so hope to do most of that side of the design/online myself.

Where is best to look for property for rent?

Also, where can I get quotes for rates?

 

[goodguy]

Have a look at local demographic(age/sex/social class) and the number of people in each category, and the definition of local, most people don't want to travel more than 5-10min(walking/driving) for a regular activity.

The trend is for low cost sports centres to open up in/next schools, so have an in built daytime client base.

To get a estimate for business rates go to voa web site or talk to them, but they could let you open and then double it. Which you have to pay until you get a hearing at a tribunal. Also depending on value you may get small business relief, talk to your local council

 

[WGPA]

Great, thanks. I've got much more research to do but you've been a great help.

There is a school with c.1100 pupils within a mile of the target site so had that covered. Visited the closest "cheap model" gym today which is 40 minute drive away with no parking. They have 7000 members, but are in a bigger city. Fag packet workings say I'd need around 600 to break even, but much more certainty needed around the costs first before I can say for sure.

 

[CoolHandCol]

On the lease, most 10 year leases have a break clause after 3 years so you won't be committing to 10 years. The landlord can do the same of course! I would go mid range in your price point - £25 - £30 a month with no long term contracts

 

[Alex - A2 Hosting]

Where are you getting the number of clients each gym has? How out dated/reliable is that information?

You could try contacting your council and see if they would be willing to somehow work with you on this. That way you wouldn't have to worry so much about them opening up next to you and the risks would decrease your risks.

If you do start this, good luck! .

 

[tombuckland]

Love the idea, I'm huge into fitness too and have dabbled with the thought of starting a gym but do not have the capital needed.

First things first:

so can always under cut commercial facilities

Not true. Some of the most expensive gyms in both cities I have lived (Cardiff and Salisbury) have been council LC gyms. Its £5 a session or £30 off peak and £50 for unlimited which is crazy high!

I personally go to a pure gym and its pretty good, everything I need but I would be interested to know what style gym you are going for...? A common mistake people make is they try to target everyone which is not the way to go. I'd be interested in chatting with you if you want to give me a PM.

In terms of the lease I would say its not to difficult to get a 2 year lease, and also on this point, start really small and make it homely! I follow quite a few fitness people on youtube who own gyms and they all started very small and then simply expanded, as its quality over quantity at the start.
I would rather train at a quieter smaller gym with good equipment than a huge gym that's too busy with tons of cardio machines or something I don't use.

Start Small.
Grow.

 

[beasty]

Why not crowdfund the gym to test demand?

Spend some money on marketing and see if you can generate the business you project, it is like a cheaper and less pricey if you cannot make it happen test.

This way you can make multiple offers too and see what people want!

Offer personal training to first x number yadayada.. you get the picture, in your shoes I would do this.. it would be good if you could put a video together of the proposed premises too.. talk about local development etc

I used to help gyms gain new members, moons ago, those that were struggling, ran direct sales campaigns for them to save their bacon... Gyms fail often because although they say TREAT EVERY DAY LIKE it is your last and WINNERS NEVER QUIT, they are actually only good (the people that say this) at moving large bits of metal up and down.

 

[warnie]

I presume you would be leasing the equipment, have you looked into how much this is for 600+ members and how long the contracts are for ?

I've trained for 18 years now consistently and am very good at moving these large bits of metal up and down, so have thought about this as well. In fact my neighbour has just taken over a small gym but it's targeted at the bodybuilders rather than those going for a cardio workout only. He's never at home due to the nature of the business so be prepared for a massive change in your lifestyle.

To be honest with the amount you have to invest upfront, I can't see the point in a short lease of 12-24 months, unless of course money is no object. Good luck with it in any case and please keep us updated with any progress!

 

[businessfunding]

Having funded several start-ups, my main observation would be deep pockets and brutal honesty regarding starting cashflow

The subscription model can be fantastic in the long term but is a very deep 'J' curve to get going

You will be putting money out long before you see any come in - marketing (and conversion) will be far tougher than you anticipate.

I have seen many gyms fail before they even opened through not recognising these facts.

 

[JEREMY HAWKE]

When I was a little guy I wanted to do this .
I studied my city and guilds 1 2 3 and 4 at college in sport and leisure .Then started a transport company . !! If your near a massive footfall of office worker ie Londons financial areas then you have a good chance . So many small gyms start up then shut down . It is quite often a money pit . The area you describe appears to be just too small . You may gain a bit of ground if you get an ex sports star on line with you but the potential is very limited outside of the cities

 

[ethical PR]

You could try contacting your council and see if they would be willing to somehow work with you on this. That way you wouldn't have to worry so much about them opening up next to you and the risks would decrease your risks.

If you do start this, good luck! .

Local authorities nowadays aren't in the habit of opening new leisure facilities unless they receive 'planning gain' funding as part of new developments .

Most council leisure facilities have been put out to tender to be run by contractors.

I don't know any that run stand alone basic gyms , so I think concerns about this are a bit of a red herring.

As others have said do your research / location, safety and quality of equipment are all key considerations.

Don't forget to allow a decent investment for your marketing. A website designed to appeal to your target audience which is well optimised is a communications channel which you need to drive people to by on and offline marketing.

 

[Silky]

A friend has had great success, but because of a different USP (Sweat Shed) If there are already gyms around, what would make yours special? What would bring people to your gym instead of already established businesses?

How passionate are you about this?
What are you bringing to the arena that will wow customers?
If you're purely competing on price, how do you know you can do so and make money?

 

[jackb144]

you say "with no long contract term", but that is how most gyms stay profitable...

although, saying that, the gym i go to at the moment does no contracts at all (just pay when joining up, and then pay again whenever you go and your membership has expired) and its been in business for years...

 

[WGPA]

Hi guys, thanks again for the replies.

I'm interested and knowledgable in weight training, although I know cardio has it's place in a gym so would cover both bases.

I've not looked into the equipment options yet, although I do know a fair bit about it already just from having an interest in the area. I'm not sure where insurance would sit with second hand equipment as buying from other gyms who are upgrading is a great way to save cash. That's still to be reviewed by me.

Interestingly as I dig into more detail about my area I'm realising my initial idea is not ideal. The population and demographic means I will need to reduce my membership number expectations and increase my prices.

I found a much smaller property in an ideal location for c.£12k/yr - albeit this one is already leased but gives rough figures. When I get time I'm going to document my research to date & model the membership over time. I think I want it to be economic at 200 members somewhere in the £20-35 region/month, which may not be doable.

That hopefully leaves upside to 400-600 members which is what I think I can get from the area.

 

[Silky]

With 400-600 members, what will be the capacity requirement at any peak time? People won't want to have to wait around to use equipment, and you would need space and enough equipment to cope with this. What about showers and changing rooms?

Reading the original post, please don't sign a 10 year lease for a business idea that is vague. Even 24 months is a long commitment if it doesn't work out, or even if it does and you need to move to bigger premises.

 

[MOIC]

Much much more research needed from the OP!

This seems like a business idea, based on emotion, not any concrete figures or a realistic business plan.

The lack of experience in running any sort of business does not help.

 

[WGPA]

Guys, as per the opening line this is just very early stage ideas so no delusion here that this is a sure thing. I certainly won't be signing a 10yr lease, as that's the one thing I explicitly said I wanted to avoid!

I've not run the figures but I imagine it would be difficult to make worthwhile returns at 400-600 members. Out of interest, I will model it and see what I come up with.

 

[JonnyMP]

You might consider partnering with a fitness instructor or expert who would actually manage the gym while you take care of the business related aspects. In this way, you could focus on what you know best while letting the fitness expert do what they were trained for. If there is little competition in your area and you provide a decent atmosphere and fitness equipment selection, then you should have very little problems making this idea a success.

 

[MOIC]

Guys, as per the opening line this is just very early stage ideas so no delusion here that this is a sure thing. I certainly won't be signing a 10yr lease, as that's the one thing I explicitly said I wanted to avoid!

A gym in a local area would need to have a secure tenancy agreement in order to provide customers with security that the location will be long term, as this would be one of the considerations members will take into account when joining. Finding an alternative premises in the same location that matches your requirements, may not be that easy to come across.

It is best to sign a lease term that is suitable, with a break clause included on your side only, to give you protection should the business fail over a given period of time.

 

[MOIC]

You might consider partnering with a fitness instructor or expert who would actually manage the gym while you take care of the business related aspects. In this way, you could focus on what you know best while letting the fitness expert do what they were trained for. If there is little competition in your area and you provide a decent atmosphere and fitness equipment selection, then you should have very little problems making this idea a success.

A good idea and one that is essential in running any good business.

I wouldn't agree with the comment............."then you should have very little problems making this idea a success"

There are many aspects involved in running any successful business, no matter how small.

 

[mtools]

let me know if you need any equipment for your gym ;-)

 

[njsemc]

A gym in a local area would need to have a secure tenancy agreement in order to provide customers with security that the location will be long term, as this would be one of the considerations members will take into account when joining...

I doubt that many (if any) customers would give this much consideration - it's certainly not the first thing that springs to my mind to ask when inquiring about a gym.
I would be more concerned about the range and quality of the equipment, how busy it gets at times when I want to go and whether or not they open at a useful time in the morning rather than 7am like most of them seem to...

 

[MOIC]

What happens to potential new customers during the 3rd year, if the tenant has a break clause on the landlords side?

Nobody mentioned it was the first thing that springs to mind to ask when enquiring about a gym, it was meant to be in the context of acquiring a lease with a break clause, which might be enforced, if it is on both sides. It's best to negotiate a break clause on the tenant's side only.

 

[njsemc]

Nobody mentioned it was the first thing that springs to mind to ask when enquiring about a gym, it was meant to be in the context of acquiring a lease with a break clause, which might be enforced, if it is on both sides. It's best to negotiate a break clause on the tenant's side only.

Well you suggested that:
"this would be one of the considerations members will take into account when joining..."

I merely pointed out that no it isn't. Most members wouldn't even think about asking about the lease and most of them probably wouldn't even know what a break clause was either.

I'm not saying it's not an important consideration when thinking about opening a gym, but I don't think it's something many people would consider if they were thinking about joining a gym.

 

[MOIC]

Why will it not be a consideration when joining during the last year of the tenancy?....................Memberships are usually for a year, so what happens if there needs to be a move to new premises without telling the member?

It's for the gym to offer a one year membership without the need to move premises during the membership term as this may cause problems to some members.

It's only a consideration, let's move on.

 

[WillLoxley]

The Op mentioned he'd be opening a basic gym which trades on not tying you in with a contract anyway.

 

[njsemc]

...what happens if there needs to be a move to new premises without telling the member?

I think you would have to tell the member - otherwise they will get a bit of a surprise when they go for their workout

 

[acs888]

If the gym near you has 7000 members, is £20 a memeber...14k a month turnover good enough. Once you take out rent, rates, equipment, electric, insurance, costs to fix broken equipment, water rates, cleaners, advertising, membership system....

I think it may be more of a full tome job and less organic to get started than you realise.

Most landlords will offer a 10 year leass with a clause to break after 5.

My advice would be to do your figures, write out your cashflow and if its viable go for it. It would be a brilliant business to own if you get it right

 

[WGPA]

Thanks for the advice. I'm still researching and by no means view it as a slam dunk. My original model is already vastly different as it wouldn't be sustainable!

One takeaway point from this thread for me is crowd funding. I think that may be a good way to get a load of members from day 1, albeit at a slightly reduced rate.