How to Open a Health Club: Four Tips to Getting Started

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Are you ready to take your gym or fitness center business dream to the next level in 2017? If you’ve been wondering about how to open a health club, it can become reality.

Fitness is an expanding industry. Gym memberships are increasing, with more than 54 million members at U.S. fitness centers. In fact, according to the Bureau of Labor Statistics, fitness centers are expected to grow eight percent by 2024. Eight percent of 54 million is a lot!

Starting a business is a risky venture. To increase your chance of success, consider these four feasibility checkpoints.

1. Type of gym or club

When starting any kind of business, it is always important to find your niche. This is true of the fitness business as well. The Small Business Administration (SBA) has a number of questions any entrepreneur should ask before opening a business. Ask yourself:

  • What is my specialty?
  • Where should I concentrate my energies?
  • What do I do best?
  • What do people in my geographical area like to do?
  • What is missing in my neighborhood?

This will help you focus on the type of gym to open. Stick to what you do best, and hire others as needed to fill in the gaps. As you put together a business plan, remember to do your homework. According to the CDC, more than 70 percent of adults age 20 years and over are overweight. That is a great deal of potential clientele. Be relevant to a needy audience and open a gym that helps them lose that weight and get in shape. Some possible specialties include:

  • Aerobics
  • Core fitness
  • Weight and strength training
  • Basketball gym
  • Martial arts training
  • Spinning
  • Yoga or Pilates
  • Aerial workouts
  • Dance-based exercises
  • Personal Training
  • CrossFit (must be certified and licensed through CrossFit) or other bootcamp-style

Some gyms have a retail component. Review this checklist for opening up a retail store to see if it’s right for you.

2. Location

Where your gym is located has a great impact on success. Bright small fitness centerSometimes, first-time owners decide to go where the rents are cheap. While the risk may pay off, it is more likely that potential members will not be able to find the gym or find it too difficult to get to the location. Always factor in higher rental rates when making your business plan. Adjustments can be made later.

Remember, you want to open your gym in an area that supports the services you offer to your targeted audience. When scoping out potential properties, consider:

  • Visibility. For example, if you decide to take a space that is not on street level, ask where can you advertise to let people know it is located upstairs. Clients need to know where you are.
  • Accessibility. Clients want to be able to get to your space and get to their workout. Research the distance from where the bulk of your clients live in comparison to your location. For example, if you are targeting affluent suburbanites, you probably will not get them to make the trek downtown where they have to fight traffic and find parking. A suburban location would be a better fit for these clients.
  • Parking (street or lot). Whether you are in the city or the suburbs, parking is a huge issue that can directly impact membership and class size. If there are not parking options, clients are less likely to come to the gym.

3. Legalities

There will always be important paper work when it comes to owning a business. When opening a gym, it is necessary to apply for business permits and licenses. You will have to comply with regulatory laws such as building permits and health department requirements. Thus, opening a gym does not simply mean investing in exercise equipment. In some states, it is also necessary to have equipment such as automated external defibrillators on site. Staff may need specific training in CPR and other emergency situations.

Certification is also necessary. Being a credible service provider is not only important to clients, but before getting a loan, bank officials will want to know the level of your abilities and competence. It is possible to take courses to get certified by a professional organization such as The American Council on Exercise, the National Strength and Conditioning Association or the International Health, Racquet and Sportsclub Association.

You’ll also need liability insurance for fitness centers. Gym business insurance can also include accident/medical coverage. While the latter is optional, it is wise to save you from future financial hardship. Note that boxing gym insurance requires different coverage. You can get quotes before you purchase. Many clubs choose to require contractors get their own liability insurance for group fitness instructors, or insurance for personal trainers.

4. Costs

Probably the most important thing about knowing how to open a health club is properly planning for the costs. For this reason, in January of the new year, we will be publishing an article solely on this topic. For now, know that unless you are independently wealthy, it is necessary to figure out how to obtain capital to cover gym startup costs. Will you have investors? Will you have to get a loan? With good credit, getting a loan may be easier than you think.

Will you lease or buy? Buying may give you the opportunity to make real estate income on adjacent businesses or residences. Consider your initial investment in equipment, knowing you can buy used equipment pretty readily. Will you need to remodel? Make a list, and get quotes.

There is the option of buying into a fitness franchise. Franchises offer a great deal of support and brand recognition. Unlike independently owned facilities, there are specific costs, rules and regulations that go along with such an investment. Do your research to determine if such a business would fit your needs. Make sure the franchisor is stable, good to work with and will deliver on promises.

In addition to gym startup costs, you need to plan for the cost of owning a gym ongoing. Figure not only fixed and variable costs, but also necessary overhead. Determine budgetary needs for:

Starting your own gym is not an easy task. Knowing who you are, focusing on what you do best, setting a plan and keeping up with finances will help you stay successful.

 

Photos by jerryonlife and Tara Angkor Hotel

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