Growth

May 26, 2024

A Comprehensive Guide to Opening a Gym (15 Steps)

Looking to start a gym or fitness business? Here are 15 steps to getting started!

Are you passionate about fitness and dreaming of turning your love for workouts into a thriving business? Starting your own gym can be an incredibly rewarding venture, but it requires careful planning and execution. This guide will take you through 16 essential steps to help you navigate the process of opening your own gym and setting it up for success.

1. Create a Financing Plan:

Before diving into the details, it's crucial to establish a solid financing plan. Consider all potential costs, including property, construction, legal fees, technology, and staff payroll. Having a clear understanding of your financial requirements will help you make informed decisions throughout the process.

Here is a place where you can download a financial planning template.

Think about how you will ideally finance it, like:

Personal savings
Friends and family
Bank loan

How much does it cost to start a gym?

It really depends on factors like type of gym or fitness business, location, real estate pricing, expected membership or client base and more.

But overall, it's good to have about $50,000 saved to put down on initial expenses.

2. Get Certified:

Building credibility in the fitness industry is key. Acquiring certifications from reputable organizations can be a great way to do this. Here are some options to consider:

Getting certified will help improve your and your gym or studio's credibility.

3. Think Through Products, Services, and Pricing:

Define the products and services your gym will offer. A good exercise is to brainstorm all of the areas where you think you can generate revenue, and then making an estimate of how many units of each you can sell each month. This will give you a good idea of potential revenue. Here are some examples:

Memberships
Personal training / private lessons
Wellness services - like sports massage or cold plunge
Merchandise
Group Classes

See what others in the area are charging to get an idea of what the market is willing to pay.

4. Choose a Business Structure:

Decide on the most suitable business structure for your gym:

Sole Proprietorship: A sole proprietorship is the simplest form of business entity, where the business is owned and operated by a single individual. The owner has full control over the business and is personally responsible for all its debts and liabilities. This structure is easy to set up and offers minimal regulatory requirements, but it does not provide legal protection for the owner's personal assets.
General Partnership: A general partnership is formed when two or more individuals come together to start and operate a business for profit. Each partner contributes to the business and shares in its profits and losses. Partnerships are relatively easy to establish and offer flexibility in management, but partners are jointly liable for the business's debts and obligations.
Limited Liability Company (LLC): An LLC is a hybrid business structure that combines the benefits of a corporation with the flexibility of a partnership or sole proprietorship. LLC owners, known as members, enjoy limited liability protection, meaning their personal assets are separate from the business's debts and liabilities. LLCs are relatively simple to set up and offer tax advantages, making them a popular choice for small businesses.
Corporation: A corporation is a separate legal entity owned by shareholders, who elect a board of directors to oversee its operations. Unlike sole proprietorships and partnerships, corporations provide limited liability protection to shareholders, meaning their personal assets are shielded from the business's liabilities. Corporations have more complex regulatory requirements and are subject to double taxation, but they offer advantages such as perpetual existence and the ability to raise capital through the sale of stock.

Each structure has its own legal and financial implications so it may be smart to chat with a lawyer to make sure you're chosing the best option for your gym.

5. Determine a Name and Register Your Business:

Select a catchy and relevant name for your gym, ensuring it's easy to spell and has an available domain. Register your business with reputable services like ZenBusiness, BetterLegal, or RocketLawyer to ensure compliance with legal requirements.

6. Get Insurance:

Protect your gym and its assets with necessary insurance coverage. But you may be asking, what kind of insurance do I need for a gym or fitness studio?

Here are some types to consider:

General Liability Insurance: General liability insurance protects your gym against third-party claims of bodily injury, property damage, or personal injury occurring on your premises or as a result of your business operations. It covers legal expenses, medical bills, and damages awarded in lawsuits, providing essential financial protection and peace of mind.
Commercial Property Insurance: Commercial property insurance safeguards your gym's physical assets, including buildings, equipment, inventory, and furnishings, against risks such as fire, theft, vandalism, or natural disasters. It ensures that your business can recover quickly and resume operations in the event of property damage or loss.
Professional Liability Insurance: Professional liability insurance, also known as errors and omissions insurance, protects your gym and its staff against claims of negligence, errors, or omissions in the provision of professional services. It covers legal defense costs, settlements, and judgments related to allegations of inadequate advice, substandard services, or professional misconduct.
Worker's Compensation Insurance: Worker's compensation insurance provides coverage for medical expenses, lost wages, and disability benefits for employees who sustain work-related injuries or illnesses. It is mandatory in most states for businesses with employees and helps protect your gym from financial liability arising from workplace accidents or occupational hazards.
Equipment Breakdown Insurance: Equipment breakdown insurance covers the cost of repairing or replacing damaged gym equipment due to mechanical or electrical breakdowns, power surges, or other equipment failures. It ensures that your gym can quickly recover from equipment malfunctions and minimize downtime, allowing you to maintain smooth operations and provide uninterrupted services to your members.

7. Open a Business Bank Account:

Establish a business bank account and obtain an Employer Identification Number (EIN) from the IRS. Choose a bank that meets your needs and consider factors like fees and services offered.

8. Find a Location:

Location, location, location, as they say. Finding the best location for your gym or fitness business is a really important step in ensuring your gym will do well.

What are some factors to consider for a gym or studio location?

Parking: Can folks with cars easily park? Are there enough spaces for the expected number of clients?
Public transit access: Is it accessible by public transit? This will open up a larger market for folks who may not have vehicles.
Space requirements based on expected membership numbers: How many members are you expecting at your new gym or studio? Will the square footage and layout work for this number?
Price: Is it within your budget?
Competition: Are there any major competitors across the street?
Visibility and Signage: Will potential customers be able to easily find your gym? Will it be in a location where new potential customers will see it?

9. Get Necessary Permits:

Navigate the process of getting the necessary permits and licenses for your gym or fitness business, including:

Basic Business Operation License: Get a license from the city or local county where your gym will operate. This license is essential for any for-profit enterprise and ensures compliance with local regulations.
Zoning and Land Use Permits: Check local government zoning laws to determine if your gym's location is suitable for commercial use. Some areas may have specific zoning requirements for fitness facilities, so it's crucial to obtain the necessary permits to operate legally.
Building Permit: If you're planning any construction or renovations for your gym space, you'll need a building permit. This permit ensures that your building project complies with safety codes and regulations set by the local building department.
Health Club License: Many states require health club licenses or registrations to operate a gym facility. These licenses may involve certain requirements, such as providing proof of insurance or obtaining a surety bond to protect members' advanced payments.
Sales Tax Permit: If your gym sells products or services, you'll likely need a sales tax permit to collect and remit sales tax to the state government. Check with your state's department of revenue to understand the requirements for obtaining a sales tax permit.
Specialized Permits: Depending on the additional services your gym offers, such as food or music, you may need specialized permits or licenses. For example, if you provide food or beverages to your members, you'll need a food license. Similarly, if you play music in your gym, you may need a music license to ensure compliance with copyright laws.

10. Buy Your Equipment:

Invest in high-quality fitness equipment from reputable suppliers like Rogue or Torque Fitness. Ensure you have all the necessary equipment to provide the best workout experience for your members.

If you're on a budget, check out Facebook Marketplace or Craigslist for used equipment that may fit your needs.

11. Consider Staffing Plan:

Are you going to have staff, or be a one-person band? If you are going to have staff, here are some potential roles:

Custodial services
Front-desk administrators
Personal trainers
Managers
Finance/ Accounting / Bookkeeping

12. Put Together a Launch and Marketing Plan:

Define your target customer demographic, identify effective marketing channels, plan your launch strategy, and allocate a budget for marketing activities. A well-executed marketing plan is essential for attracting initial members and generating buzz around your gym.

13. Invest in Your Online Presence:

Establish a strong online presence by creating a professional website, setting up a Google Business Profile, and creating active social media accounts. Utilize online platforms to engage with potential customers and showcase your gym's offerings.

Create a new gym website in 30 seconds with AI. Try it now for free

Looking for some inspiration from other gyms and fitness businesses? Here are some examples

14. Invest in Operating Technology:

Utilize operating technology platforms like Zipper, Mindbody, or WellnessLiving to streamline gym operations, manage memberships, schedule classes, and track finances.

Also, consider tools like Quickbooks to manage your accounting, and investing in an accounting firm to save you the time and effort of doing taxes.

15. Focus on Providing a Great Customer Experience:

Prioritize customer satisfaction by creating a welcoming and supportive environment for your members. Happy customers are your best marketing channel and can drive long-term success for your gym business.

And always be sure to ask for testimonials and reviews. Social proof is the best marketing gasoline!