How to Make a Gym Business Plan
Make a Gym Business Plan
This article will tell you how to write a gym business plan and the next steps to take in opening a gym.
If you are planning to open a gym business but have no experience, a comprehensive business plan can also be a roadmap for the long-term development of your gym. Writing a business plan requires a well-organized and detailed procedure that defines the key factors associated with any successful business.
Gym Business Opening Plan Outline
Before going into detail about each section, here is an overview of the main questions you should include when developing a gym opening plan:
- Executive Summary
- Introduction of your gym
- Services and products
- Facilities and gym equipment
- Market research and Analysis
- Strategy execution
- Management summary
- Financial Projections
- Appendix
1. An Executive Summary of Your Gym Business Plan
A strong executive summary will impress an investor or lender, and if the first few pages are not appealing, potential investors or lenders will not be interested in continuing reading. Therefore, it would be good to add some persuasive business cases for your gym in the summary.
Because it is like an index to your business plan, it is recommended to complete this section after completing the rest of the paper so that you can extract important content and data from the overall plan.
Please clarify the following questions in your executive summary:
- What is your business model and its advantages?
- How big is your market? Where did you get this key market data?
- What market needs does your gym meet? What membership types will you offer and how much will they cost?
- Do you have any unique and practical advantages?
- How much capital does your gym require?
- What are the bottom-line revenues, expenses, sales growth, and profits/losses for the first three years?
2. Describe your gym
You should already have a general idea of your gym, but the investor or loan manager may not, so it is necessary to describe your gym.
- Ownership and investor structure, the legal structure of the gym, is it affiliated with other companies? And what type of company it is.
- Required capital and return on equity, investors’ expected return on investment and how they can exit in the future.
- Gym location, transportation, parking, nearby competitors and surrounding environment.
3. Services and Products
Next, you need to define your service concept and the workout environment you are creating.
- How closely is your business tied to your members?
- Is it a luxury atmosphere or a simple fitness model?
- Are you providing a for-profit or non-profit service?
Like free weights for sale, such as dumbbell set, barbell bar, barbell plates, and kettlebell set could be included as well; Or a gym offering babysitting services might attract more younger members.
4. Facilities and Fitness Equipment
If a site or facility has been selected, describe its key strengths and benefits, such as size, accessibility, visibility, expansion potential, approximate rents, and area demographics to demonstrate your familiarity with your target market. Providing a map showing the exact location is highly recommended.
If you are still in the facility search phase, provide the criteria you will use to evaluate potential facilities. In addition, describe in detail what facilities the gym will have, such as a cafe, studios, locker rooms, studios, cafes, and/or amenities, as well as the overall design aesthetic.
Finally, fitness equipment is a major component of the cost, which includes:
- Body weight machines
- Cardio Equipment
- Barbells and Collars
- Dumbbells
- Kettlebells
- Weight Plates
- Exercises bikes
- Ellipticals
5. Market Research and Analysis for Gym Business Plan
First, it is important to understand the trends in the fitness industry. We can refer to industry reports studied by IHRSA, which provide data that can prove the bright prospects of the fitness industry.
Then, talk about detailed marketing positioning, including where local competition comes from, and the demographics of the primary and secondary markets in the specified area. Based on the research, explain why ideal customers will be attracted to your health club or fitness center, such as babysitting services.
Market research and analysis can make you stand out from competitors, ensure business success, and help with post-launch messaging, so you will spend a lot of time and brain cells studying this information.
6. Strategy Execution
- What is your competitive advantage? For example, babysitting services, free coffee or soft drinks, or more fitness equipment.
- Marketing and Sales Forecast.
In this section, you will outline your marketing and sales strategy and sales forecast for the first three years.
Below questions maybe involved:
- What are the sales forecasts?
- What will you do to attract target customers to join your club and become members?
iii. What is your market strategy?
iiii. Do you have any promotion offer plan to support pre-sales and after-sales?
- V. What would you do to retain members?
7. Management Summary
1. Staffing
In this section, you can break down your organizational structure, compensation, and benefits programs.
2. Resumes
If you want to manage a fitness business (such as a club or center), include your resume and team member information in the appendix, and you will need an organizational chart. In addition, you will need statements from non-management staff at the gym.
Aside from gym equipment and rental, labor is the largest expense for most fitness clubs, so compensation and benefits structures are very important. Remember, how you structure your compensation and benefits system will determine whether you attract and retain your team members. Also, consider whether your business will be profitable in the long and short term.
8. Financial Forecasting
This section can be the most daunting part of planning.
Based on best- and worst-case scenario projections, you will create cash flow statements, income statements, and balance sheets for the next three years.
You will need to provide context by comparing industry standards and ratios, startup costs, and salary expectations. A debt repayment statement is also important. Consider membership and revenue growth, service enhancements, membership churn, and employee salaries.
9. Appendix
This section is the final part of your own gym business plan and includes all supporting documents:
- Management Team Resumes
- Job Descriptions
- Demographic Information
- Roadmap
- Promotion Plan
- Marketing Plan
Know your goals
Whether you are building a gym from scratch or looking to revitalize an existing center, it is important to understand your goals. If you already own a gym and want to contribute to it, then you should consider the following questions:
What challenges are you currently facing?
Are there new competitors in your space? Taking advantage of areas you haven’t been using? Providing more added value to your customers can greatly improve their experience at your center.
If you are considering opening a gym, we would first ask you two questions:
1) What type of gym do you plan to open? What type of demographic will it cater to?
What type of users do you want to attract; should you consider building a specialized gym for athletes to train exclusively? Are you building a group training room or a room that is easily accessible regardless of fitness interests?
2) Who are the competitors in your area?
This will give us hints about the local market and help you develop ideas to attract customers. What is missing from your neighborhood and community and what might motivate others to train with you?
What equipment do you currently own?
How long have you owned the equipment; everything has a lifetime value. Equipment is constantly used during its use, so it must be replaced frequently under warranty standards. This helps to avoid user disappointment.
What facility is best for you?
Your customers will have their own training schedules and the products they like to use. It is important to consider your users’ needs when evaluating any changes. Don’t just follow trends – your customers will stay with you longer than outdated trends.
Before you start your gym business plan, consider the following first:
- Space constraints: Don’t overcrowd your gym – people need space to train, especially if users like to create their own personal training space.
- Ceiling height: This is especially important for building racks and drills.
- Subfloor: The requirements of each flooring type (tile, turf, and roll) require a specific subfloor to ensure the best fit and safety for equipment and users.
- Parking: Gym design is not only about what happens in the gym, but also how customers get to the gym – do you need a space with parking for easy access?
- Windows: Often forgotten, equipment placement may need to be repositioned to ensure natural light is not blocked and the gym area is well ventilated.
- Access and circulation: Your clientele should be top of mind, how does the gym feel when you enter it, how does it look, does it entice you to come in and train – large equipment at the entrance may block views of the rest of the gym.
- Power: For lighting, machines, music, and timers. Be sure to assess where the outlets are before you start moving around the space.
- Facilities (Water and Waste): As one of the most expensive spaces to build or move, considering the location of these facilities or where they will go (and their size) will impact your overall design and design.
Next stage: Partitioning
Once you have your own center and have determined the important factors above, the next step is zoning. Zoning not only determines what equipment you can have within your gym, but also the number of members you can invite.
As a company, you now know how many members you need to keep your business profitable. This number must be considered when designing your gym, as it will determine the minimum amount of equipment you may need.
How much space do you need to accommodate the number of members you plan to have? How much equipment is enough to accommodate the number of people you want to take classes with? These are just some of the basics you need to know when considering zoning within your facility.
Your room can be divided into 5 main areas:
1) Free Weight Area
This area can quickly become the busiest area in any gym, make sure there are enough racks, plates, dumbbells and storage units on the gym floor. Practical storage units are a great option to keep your gym floor tidy, allowing you to store all your free weights and accessories while keeping them accessible.
2) Cardio Area
Depending on the size of your gym, you can have a lot to offer for many users. If you have a smaller room, then focus on how you use it.
Studio: Not just for classes, using these spaces allows your members to create their own personal fitness studio when classes are not in session. Unique product options can help create class principles as well as dedicated personal workout areas.
3) Gym Equipments area
If you’re designing a traditional gym and have room for free weights and cardio equipment, this is an obvious choice:
stair climber
treadmill
exercise bike
rowing machine
Smith machine
Cable pull up and down
Seated Overhead Press
Please note, having sufficiently high ceilings and solid floors is essential to ensuring the space is fit for its intended use.
If you want to offer your customers a diverse selection of fitness equipment, but at the same time don’t want your space to be overcrowded, difficult to navigate, and unsafe to use, then you need to consider what equipment will work best for your members. It’s better to have fewer options and more wiggle room.
4) Functional area
It is often combined with studio training. However, if you have the space, you can create a separate area for it. You can avoid losing useful space by creating an additional open area while the class is going on. Enable participants to continue their education in the way they prefer.
5) Personal Training Area
Personal training ranked sixth in the ACMS 2022 Fitness Trends Report. This clearly shows that it is worthwhile to provide space for personal trainers to work with clients.
You need to consider providing an office space for your personal trainer to sit down with clients regularly to discuss their fitness goals and progress. Some gyms offer private rooms/spaces with fitness equipment for one-on-one personal training sessions.
The bottom line is that while opening a new or small gym is exciting, the finishing touches can be very complex. Spending a lot of time studying and preparing your homework and developing a business plan is necessary if you want to succeed.
A complete gym business plan will help you evaluate the feasibility of your gym project, strengthen your ideas, set goals and learn how to achieve them, attract capital to launch your gym, and prepare for long-term sustainability.