Are Gyms a Profitable Business Model and Should You Start One?

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As an entrepreneur, it’s never easy to land on a good idea for a business. Every single idea worth trying is already locked down by other entrepreneurs. However, if you take a closer look at the market, you’ll notice that some business concepts have endured for millennia. 

Restaurants, grocery stores, and entertainment providers– these industries go back far into early human civilization yet still fit into modern society well. Similarly, many believe that the first gymnasiums began over 3,000 years ago, in ancient Persia. Gyms have changed and evolved since then and they can still be a great business venture if handled properly today. 

In this article, let’s take a closer look at what you need to know if starting a gym seems like an interesting idea to you. 

What Factors Make for a Successful Gym?

We always hear of businesses failing within X amount of years, and indeed, that’s a risk for anything. However, we also see some promising headlines such as how companies like Planet Fitness have seen stock appreciation by 37% in 2024. This is well beyond the typical 25.3% of the S&P 500! 

Thankfully, gyms aren’t as fickle as some other niches like restaurants or clothing stores. The key reason behind this is that people know that the heart of every modern gym is relatively stable. 

Think about it- you can have a wildly different experience when you visit two different restaurants at opposite ends of the city. On the flip side, visit a gym in Berlin and a gym in Texas, and besides aesthetics, they aren’t going to be too different. 

As you might imagine, the secret sauce is equipment. At the core of it, you have to remember that a gymnasium is nothing more than a space for workout equipment. Sure, most gyms have add-ons like fitness trainers and a supplement store, but those are secondary aspects.

Thus, the bulk of your investment ought to be for your equipment and for the amenities of the physical space you lease. So, if you’re just starting out, you don’t want to try competing with those luxury gyms that demand $40,000 a year as membership fees. As Forbes notes, that’s 70% of the average American salary.

Instead, focus on certain fundamental standards:

  1. Equipment that’s chosen wisely and in enough quantity to handle peak hours.
  2. A clean and hygienic environment (AC, cold water, shower rooms, etc.).
  3. The right location- not too remote or out of the way for members.
  4. Reasonable membership fees
  5. Professional trainers 
  6. Ideally, open 24/7 or as flexible with hours as possible. 

Of course, there are many other factors to consider. However, if you can fulfill these fundamental standards, the experience you provide will likely be superior to many existing gyms. 

How Can You Start Finding Members?

This is the part that can be intimidating for a lot of people. There’s nothing scarier than taking out loans for equipment and spending months planning your whole operation, but three weeks go by without a single inquiry. The sad part is that this scenario isn’t impossible. It happens to businesses in every niche, but it is also preventable. 

The key is to factor in marketing and brand establishment as early as possible. So even if you’re only going to open three months from now, go ahead and get your gym website up and running. This shouldn’t take you more than a few minutes with a service like Hocoos, which uses AI to simplify the whole process.

These AI-assisted website builders often come with preset templates that you can also use if you’re really in a hurry. With your gym website up and running, remember to start a blog section and post content periodically. This helps a lot with getting your website some organic traffic, especially if you pay attention to local SEO best practices. 

On the offline side of things, you also want to be networking as much as possible and getting word-of-mouth awareness going. Of course, don’t try to poach people from other gyms, but you can visit local sporting events and practice areas to naturally spread the word. 

Also, don’t feel shy about targeting colleges and even schools. You might not think so, but studies are finding that Gen Z is embracing the workout lifestyle. According to data from 40 million gym members and 30,000 fitness businesses, 29% of all new gym joiners are Gen Zers, so don’t discount them! 

The Need to Set Clear Milestones and Goals

Starting a business, regardless of niche, is rarely a cakewalk. Thus, the potential for worst-case scenarios does exist. However, rather than approaching them from a reactionary perspective, it’s wiser to brainstorm and then set certain business goals

For example, what sort of time period are you thinking about in order to pay back all your loans? What about income generation to break even? Similarly, what sort of time periods do you want to keep for different profit percentage milestones? 

If you don’t set clear goals, you’re likely to see the days go by and keep justifying or deluding yourself. Your gym could be doing pretty badly, but instead of taking quick action, you might keep telling yourself, “Eh, it’ll pick up soon.

Thus, set goals so you always know exactly how your gym is doing in terms of sustainability. 

All in all, owning a gym can be a great business if you are ready to invest or borrow for the cost of equipment. Some of the equipment you’ll have to get won’t be cheap, so, be prepared! Hopefully, this article has given you some insights, and you have a better idea of whether starting a gym is the right call for you. 

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