This is an educative piece to help you get started in your gym or fitness studio business.
Let’s get started right away.
Post 3 of 5 in the Create a gym/studio series
Are you thinking about opening a gym or fitness studio?
If yes, you need a business plan.
In this guide, we’ll reveal what a business plan is, why you need one, and how to write it.
Make sure to take the quiz to get a good idea of which certification is right for you.
What is a business plan?
In a lot of ways, a business plan for a fitness studio or gym is a lot like writing a workout program.
Why? Because it follows a logical structure so that, by the time you get to the end, you have something that will produce the results you want.
For a workout, that means a happy, healthy client.
For a gym business plan, it means you’ll know if your ideas are viable and how you are going to make your dreams of gym ownership a reality.
A business plan is a document that outlines every aspect of your project.
It explores the feasibility of your new business and provides answers to all the critical questions that will affect your success.
While writing an opening a gym business plan may seem like a lot of work (and it is), it’s also crucial to your success.
A good business plan reveals your strengths and also highlights any potential weaknesses so that, before you start, the odds of success are already in your favor.
A business plan may also reveal that your gym or studio is not viable.
While that IS sad and can be disheartening, it’s better to abort during the planning stage than start your business and then fail, and that would be a colossal waste of time, energy, and money.
As you may have heard, prior planning prevents piss-poor performance, and that’s as true for training your clients as it is setting up a gym.
Increase your chances of success by following these business planning steps!
It all starts with market research
In this section, I’ll explain the essence of undertaking market research.
I have listed below some important variables you should consider.
Before you start your business plan, do some market research to determine if there are enough potential customers and space in the marketplace to support another gym or fitness studio.
After all, the fitness industry is a fast-growing business.
Some areas are already saturated with fitness facilities.
A gym without customers won’t last long.
Sure, having the place to yourself means you can blast out your favorite work out tunes as loud as you like and hang out with your buddies instead of working, but that won’t pay the bills, and the aim of any business is to be profitable.
When determining viability, consider the following points:
- Demand – do people want what you are selling?
- Market size – are there enough potential clients to sustain your business?
- Pricing – what do you want to charge for your services, and what do similar businesses charge?
- Local economy – can your intended clientele afford your prices?
- Location – is the location within easy reach of your intended customer base?
- Competition – are there other gyms or studios in the vicinity that could dilute your potential customer base?
Market research can be time-consuming and even tedious.
After all, you want to get your gym open and start training clients.
But, time spent now could save you a lot of heartache and money in the future.
After doing your due diligence, you might find that your current business model isn’t viable.
It’s better to discover that now rather than after you have opened your doors.
To get the information you need, you’ll have to get out and investigate, using all your detective skills to determine the practicality of your basic business idea.
Ways to do this include:
- Surveys and questionnaires
- Talk to other business owners and operators
- Speak to local business advisors
- Join a small business owners club or association
Once you’ve determined that your business has the potential to be successful, it’s time to start writing your business plan.
A good business plan for a gym is critical for your success.
Some prospective gym owners think they can skip this stage, but they’re the ones you’ll never hear about – because they FAILED!
A business plan will identify all your strengths and weaknesses, list your resources, determine your needs, and help you secure funding.
Even if you don’t need financing to get off the ground, you still need to create a detailed business plan.
Think of your business plan as a map to your success.
Expect to waste a lot of time and energy getting lost. In business, that usually means losing money.
So, you’re probably thinking, “how do I write a business plan for a gym?” and the reality is there is no right or wrong way to do it.
What’s important is that it meets your needs.
There are gym business plan templates you can use, but most of them follow what is usually called the traditional business plan format.
These plans are very comprehensive, take time to complete, but lenders and investors typically need this type of document.
You don’t have to stick to this exact format, and some of the following headings may not be relevant to the type of business you want to open, but this is a solid framework that should be more than adequate for your needs.
0. Cover and contents page
While this will probably be the last part of your plan that you write, it should be the first part of your completed business plan.
Like a book has a cover and index page, so too should your gym start-up business plan.
The more professional your business plan looks, the more likely you are to be treated as a professional.
First impressions count, and this is your chance to use your business plan to make a good one.
1. Executive summary
It might seem weird to put a summary at the start of your plan, but this is your hook to get the reader interested in your project.
Tell the reader what your business is, and why you think it will be successful.
Include basic company structure, location, and brief but relevant financial information, such as how much money you need from potential investors, and how much you are investing yourself.
While the tone of this section should be positive, avoid hyperbole.
Also, keep your paragraphs short, avoid typos, and stick to the facts.
Grab the reader’s attention, so they want to learn more.
2. Company description
In this section, explain how your gym or health club is going to work. Include information on:
- Your certifications and experience
- Target clientele
- Their needs
- Your services
- The location or locations if you are still scouting
Also, include details of the main team members, describing their experience and capabilities.
3. Market analysis
You should have already done this, so it’s just a matter of slotting your market analysis information into your starting a gym business plan.
Make sure you include details on any competition and discuss why you think you’ll be able to secure your share of the marketplace.
If you can offer a better service than the competition, mention it here.
4. Organization and management
For most small gyms and fitness studios, this section is usually pretty short.
It could even be just you.
But, if you have a business partner, or intend to have employees, this is the place to list them.
Use an organizational chart to show who will be doing what within your company and consider adding the resumes of any key team members.
Not hired your team yet? No worries! Just list the job titles and roles you have yet to fill.
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Next, describe the legal structure of your company, explaining whether you are a sole trader, a general or limited partnership, a corporation, or an LLC.
Not sure about this stuff yet? Maybe you need some legal advice before going further.
5. Description of services
It’s a mistake to assume that the person reading your business plan knows what personal trainers do.
They might not even exercise.
Make them a true believer by explaining the services you anticipate offering.
Use non-technical language and not gym jargon to ensure they know what you are talking about.
Make sure you mention the benefits of the services you intend to offer, and how you’ll make sure those services stay relevant over time.
6. Marketing and sales
Outline how you are going to market your gym or fitness studio and convert that interest into sales.
Create a marketing strategy that lists all the ways you are going to raise your company profile.
Also, explain how you intend to retain your customers.
- Social media advertising campaigns
- Local print media advertising campaigns
- Community outreach and open days
- Referral incentives
- Joint and family membership discounts
- Seasonal initiatives, e.g., spring “New You” promotion, Twelve Days of Christmas fitness, etc.
- Discounts for founder members
- Block booking PT discounts
7. Financial projections
The aim of this section is to convince the reader, and reassure yourself, that your business can make money.
Project your expenditure and income for the next five years.
Include your start-up costs, building rent, salaries, licenses, taxes, advertising and marketing, consumables, and any other expenses you can anticipate.
This section is a great place to use charts and graphs.
Balance this with all potential income streams.
Speaking of income, make sure you consider:
- Monthly and annual fees from members
- Income from personal training
- Income from rent from personal trainers, therapists, etc.
- Food and beverage income
- Income from gym clothing sales
Plus, any other potential revenue streams.
Things like gym fees, PT rents, and PT income depend on things like location, market value, inflation, and what your competitors charge; they are not set in stone.
However, these figures form the basis of your income projections, so make sure they are as realistic as possible.
Don’t project that you’ll be charging $100 per hour for PT when the local average is $50.
Inflated projections just give an unrealistic impression to investors and also may give you a false sense of financial security.
It’s always better to underestimate than overestimate when it comes to income.
Hope for the best, but plan for the worst as they say.
For the first 12 months, provide monthly or quarterly breakdowns and projections.
For the next years, widen your view to six-monthly projections.
After that, annual projections should suffice.
8. Request for funding
By now, you should have calculated your start-up costs.
If you are opening a small gym or studio, you may be able to do it without funding.
That’s especially true if you are going to be doing things like functional training, bodyweight training, or other workouts that require space but very little equipment.
However, if you are going to open a “real” gym, you’re going to need a full range of workout gear, plus a whole lot of additional incidentals.
This stuff isn’t cheap!
Identify ALL your start-up costs so that you know exactly how much money you’ll need to get up and running.
If you need seed money for your business, now is the time to ask.
In this section, explain precisely what you need the money for, and how it’s going to be used.
Break it all down, item by item, making sure you don’t omit anything that you end wishing you’d included later on.
Specify what type of funding you are looking for – a loan or equity.
If a loan, what repayment terms are you looking for.
If you are offering equity, how much of your business will the investor own?
Remember to build in a small safety margin because, invariably, and even with the most meticulous planning, you will probably underestimate how much money you need.
Note this under contingencies or emergency fund.
Now is also an excellent place to mention how much of your own money you are putting into your new business.
It might not be a large sum, but any self-investment demonstrates a commitment that could impress a potential investor.
9. Potential for expansion
How do you see your business growing over the next few years?
Is it the start of a franchise? Do you hope to move to bigger premises?
Have you got plans to add additional services or staff, or update your equipment?
There is no need to be overly precise in this section.
After all, you can’t see into the future!
But introducing the idea that you are thinking “big picture” shows you are in this project for the long run, and, for investors, that can be reassuring.
Use this section for anything that doesn’t fit into the previous nine categories.
You could include mock-ups of logos, ideas for the layout of your gym, proposed color schemes, mocked-up advertorials, or anything else that demonstrates how you intend to make your business a success.
If nothing else, this section suggests to the reader that you already see your gym business as a living, breathing entity.
You now have all the info you need to write a workable business plan for your gym or fitness studio.
Read below for more tips to help you get started.
Writing a business plan is not easy, and doing it right will take time.
It may require lots of amendments as your ideas take shape.
Your first draft will not be your only draft.
But, trust us when we say this; it is absolutely crucial for your successes.
First of all, a business plan will determine if your ideas are even viable.
After writing your plan, you could find that your set-up costs will make it impossible to turn a profit.
Don’t let this put you off.
Just go back to your plan and start over.
Maybe cancel that order for solid gold dumbbells?!
Once you’ve determined that your business has a potential, a business plan will show you all the things you need to consider before starting.
From the company’s organizational structure to marketing to financial projections.
Having all this information from the get-go will make the first 12 months of operation much less stressful.
A good business plan is also vital for securing funding.
No-one but a loan shark will lend you money without a detailed business plan.
Loan sharks are not a recommended source of financing!
Finally, writing a business plan is an excellent way to determine if you are ready to own and operate a gym.
If it all seems like too much hard work, you probably aren’t ready to take on the responsibilities of business ownership.
But, if all the writing and planning gets you pumped, it could be that you’ve got the right stuff for gym ownership.
So, what are you waiting for? Fire up your computer and get typing!
- Qualtrics.com – 10 Market Research Tools You Should Be Using
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