Gym startup costs

[UWOTM8]

One of my (many) business ideas/interests is opening a gym.

I move around the country a lot with my job and I know of some places that are crying out for a "decent" gym, and luckily the world is finally realising the benefits of training "properly" and not just p1ssing about on treadmills and rusty old fixed machines from the 90s.

Anyway, I'd like to know more about:
-Building use types (I'm determined to find a premises that isn't a grotty old building on an industrial estate. I believe it is a D2 use I need?)
-Rates/rental (I have no idea how these work)
-Utility bills (are they covered by rates?)
-Liability Insurance
-Employing staff
-Marketing
-Membership management (I believe there are companies that manage all this on your behalf)

Equipment costs I am clued up on and in fact have a mate who manufactures everything I need.

 

[JoshB92]

First thing to understand is that this isn't going to be cheap, set up costs are high, . It could take 2-3 years before you're generating enough revenue to cover your costs. I'll give you a brief rundown of some of the points in your list:

- Rates / Rental - Your rent will be set by the landlord, and you'll be locked into a lease for anything from 2-10+ years. Your best bet is to talk to commercial estate agents and see what typical premises are available at what cost. Everything is negotiable with a commercial lease as we're still in a buyers market, but be prepared to pay several months deposit and some rent upfront if the landlord won't budge. Business Rates are like council tax, and are set by the VOA at a 'rateable value', however you can check with the council to see what multipliers you might qualify for to reduce this. Some small businesses pay 45p in the pound or lower of the rateable value.

- Utility Bills are nothing to do with rates. Rates really don't include anything, not even waste collection as your council tax would. You'd negotiate utilities with suppliers in the same way as you do for your home.

- Liability Insurance - you must have public liability insurance, in case anyone hurts themselves on your premises, and if you employ staff you need to have employers liability to cover yourself. Your lease will determine who is responsible for insuring the building, the landlord may take this up and require you to pay him for it, so be sure to check the lease. You'll need contents insurance for your equipment, and might want to take up other cover on your policy (loss of income etc.)

- Employing staff - This government portal has pretty much everything you need to know about employing people. When working out your staffing costs in your business plan, don't forget to budget for employers national insurance contributions, holiday cover, and sickness cover.

- Marketing - Don't expect people to come flooding in after your first leaflet drop, it's going to take a good long time to build up a client base and your marketing costs may be quite high to achieve this.

- Legal costs - Please don't skimp on a solicitor for your lease to save some cash. You need only read through these forums to find horror stories of people who didn't bother paying for one and are now stuck in unfavorable 10 year leases that they can't afford. A good solicitor will be worth their weight in gold for the savings and contract terms they can achieve for you.

 

[UWOTM8]

That's great info thanks. A very big endeavour ...

 

[MyBusinessStory.co.uk]

Big expensive project, i have looked into it before, try reading Duncan Bannatynes book (one of the dragons from dragons den) a great read and he did the same and shows many great ways to calculate costs and income

 

[UKStrength]

Ok I have recently started a Strength and Conditioning facility in Gloucester. I Can say the number 1 piece of advice I can give you is: MARKETING IS KEY! Its alot harder and more expensive that I thought. Good luck bro and send me an email for any advice etc!

Scott Baldwin - Limitless Fitness

 

[Nategym]

I would also like to do the same thing in birmingham any advice would be great from anybody already established

 

[Raging Bull]

I own a strength & conditioning equipment company and 1 piece of advise I would give you is to look into leasing the equipment as it has excellent tax advantages.

It also leaves you more to spend on marketing.

 

[businessfunding]

If advise as it has excellent tax advantages.

.

That depends entirely on the tax situation of the lessee - Yes look into it, but take tax advice from a qualified accountant, not a salesman

 

[mrsdoc]

is franchising a cheaper/easier way of doing it? or not?

 

[senses]

Marketing is key and like others have said the startup is high.
However, if you are willing to put it in, you can reduce this overhead a lot. Crossfit is a great example. The equipment use is quite small but everything is a 'guided session' - e.g. you lead the group. Something to consider.

Also consider how you are taking the membership re-curring payments, getting this right is vital, as you need to ensure people 'just pay' without any hurdles. Without this your retention rate will kill your business.

If you need any help on that, let me know!

 

[Karimbo]

I own a strength & conditioning equipment company and 1 piece of advise I would give you is to look into leasing the equipment as it has excellent tax advantages.

It also leaves you more to spend on marketing.

I imagine this would be important. I have used new gyms and noticed during the first 3/4 years they trial a lot of equipment, some equiopment are never used and they are removed. While other machines are in high demand and you dont have enough.

So a rental option is probably useful - however being in the rental market myself. b2b rental for equipment is steep. You could end up paying half the price of the equipment in rental which you don't own.

 

[Rob Karn]

One of my (many) business ideas/interests is opening a gym.

I move around the country a lot with my job and I know of some places that are crying out for a "decent" gym, and luckily the world is finally realising the benefits of training "properly" and not just p1ssing about on treadmills and rusty old fixed machines from the 90s.

Anyway, I'd like to know more about:
-Building use types (I'm determined to find a premises that isn't a grotty old building on an industrial estate. I believe it is a D2 use I need?)
-Rates/rental (I have no idea how these work)
-Utility bills (are they covered by rates?)
-Liability Insurance
-Employing staff
-Marketing
-Membership management (I believe there are companies that manage all this on your behalf)

Equipment costs I am clued up on and in fact have a mate who manufactures everything I need.

You may also want to think about how you actually process the membership payments. Most new gym owner assume they can just do this via their bank but its very unlikely you'll be able to do Direct Debit payments through your bank and this is how most members would want to pay you. Harlands Group specialize in the the leisure sector and help clubs effectively process payments, we also offer credit control for you, a customer service centre for your members and link in with various access control solutions, so happy to advise. Get in touch with me if you want to chat further.

Best of luck ..

Rob.

 

[Jennie@FreeAgent]

Marketing is key and like others have said the startup is high.

I agree with this. Have you thought about some sort of marketing and social media strategy yet? i.e. which platforms and channels will you be using to promote your business?

This is all very exciting though and I wish you lots of luck

Jennie