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How much does it cost to open a gym?

How much does it cost to open a gym?

Good news for aspiring gym owners: Even though at-home virtual workouts are here to stay, all signs point to hybrid fitness being the way of the future.

In fact, the gym and fitness center industry is expected to grow from its current $37 billion to $42 billion by 2026, according to market research group IBISWorld Inc.

That means now could be a great time to open up your own space, and Wix Fit can help you build, manage and grow your fitness business. (More: How to start a fitness business)

If you’ve got your sights set on opening a gym, familiarize yourself with the following costs as you create your business plan and hunt for the perfect space.

The cost of opening different types of gyms and fitness facilities

There’s no getting around it: Just how much you’ll need to invest in order to get your fitness facility up and running varies (a lot!) depending on the type of gym or workout space you want to open—and where you’re located.

If you’re looking to open a small studio (think 600 to 800 square feet) for yoga, barre, or personal training, you can probably do it for about $25,000, says Robert Linkul, a National Strength and Conditioning Association board of directors member and business coach. (More: How to become a yoga instructor in 7 steps)

However, if you’re looking to equip a medium-sized gym (anything between 1,000 to 2,500 square feet) for group classes or other sorts of training, be prepared to spend more like $50,000 to $75,000, Linkul notes.

And if you plan on opening an even larger space—like a 4,000-square foot small group strength and conditioning gym complete with all the fixins—know that Dan Kleckner, a fitness business consultant, has needed about $100,000 to get each of his gyms (which are all this size and vibe, and located in both the Seattle area and Montana) up and running.

If you’re interested in franchising, you can expect to dish out even more cash. To get an Orangetheory location off the ground, for example, be prepared to invest anywhere from $575,922 to $1,498,122. Orangetheory’s trademark equipment, software and branding will cost you.

Though other types of franchises offer different workout experiences, they generally come with similar hefty startup costs. Get in on the hot yoga trend with a CorePower Yoga franchise and you’ll need to dish out between $455,200 and $1,206,000 in initial investment dollars. And should you go the traditional box gym route with something like a Retro Fitness, you can expect to invest at least $1,500,000 at the outset.

The cost of opening different types of gyms and fitness facilities

Is opening a gym profitable?

Given the significant amount of cash required to get a new gym opened and established, you probably want to know how much you could make on your investment.

In general, the gym and fitness club industry has averaged a 9.6 percent profit margin throughout the past five years, according to IBISWorld, Inc. If you’re not super business-savvy, this number might sound awfully low—but, according to the Corporate Finance Institute, it’s actually pretty average. (FYI: A profit margin is a measurement of how much actual income you’ve earned after subtracting all of your costs from your total revenue.)

Again, though, there are plenty of variables that can impact how much you ultimately make as a gym owner—many of which are related to the type of facility you’ve got.

Linkul likes small studio setups that offer yoga or barre because they require little or no equipment. This means you typically won’t have as many expenses as you would opening a gym filled with equipment that needs to be maintained and replaced regularly. In these cases, more of your total profits may end up in your pocket.

Otherwise, your ability to make a killing may generally be greater with an independent boutique than a franchise—at least if you’re in a more metropolitan area or big city. “In many places at this point, you’re going to be ninth or 10th to market when [opening a franchise],” says Kleckner. “For instance, in Seattle, we probably have 10 of those group class-style gyms within two or three miles of us.”

Since franchises and bigger box gyms tend to have higher client turnover, you’ll have a harder time maintaining the membership numbers you need to make money as yet another one of these facilities in an already-saturated area, Kleckner says. In these cases, opening up an independent operation with a more personalized or niche approach is generally a safer bet. “While the average franchise group class gym holds onto clients for an average of six months, ours stay for closer to 30,” he explains. (Here’s how to increase member retention on a budget.) Plus, don’t forget that franchising means you’ll forever pay a percentage of your profits.

The costs of opening a gym

Sticker shock is completely understandable. Many aspiring gym owners think all it takes to get up and running is the right space and equipment. However, a slew of other necessary costs—some of which you may have never heard of before—ultimately drive up the expense of opening a gym. Here’s a list of all the checks you’ll need to write along the way. Don’t worry, we’ll get the big ones out of the way first.

The costs of opening a gym

01. Rent

Of course, one of your most significant costs will always be your rent. As with everything, just how much you’ll need to spend varies. You’ll pay a heck of a lot less in rent as a small yoga studio in the midwest than as a large strength and conditioning gym in the heart of a major city.

In some areas, you’ll pay just $1 to $3 per square foot in rent, Linkul says. For a 1,000-square-foot place, that puts you at between $1,000 and $3,000 in rent per month. In Montana, meanwhile, Kleckner pays $10 per square foot, which puts rent for a 1,000-square-foot place at $10,000 per month. Want to open a place in SoHo in Manhattan? Rates go for $150 per square foot.

If the rent costs in your desired neighborhood have you discouraged, a tip from Linkul: “Start small and overflow out of it. Then you’ve got the good problem of needing to expand instead of being in over your head in a larger space,” he says.

02. Building costs

In many cases, the space you lease (or buy) for your fitness facility will need at least some cosmetic construction to transform it into the gym of your dreams. Sometimes, it’ll take quite a bit of work to get it in working shape.

“Everything might look ready but then you have to raise a ceiling to fit a weight rack in and suddenly you’re spending five figures on building,” Kleckner says. To prepare for the unexpected, he recommends budgeting $25,000 for larger gyms, like his. (You’ll be able to renovate a simple studio for much less.)

To save some of your precious cash here, negotiate with your landlord as much as possible to have them make some basic improvements before you move in, or incorporate a few months of free rent into your lease terms.

03. Equipment costs

The workout equipment you’ll need for your gym—and how much you’ll have to budget for it—varies significantly based on the type of operation you’re opening up.

If you’re working on a small studio or gym set-up, you can fully equip yourself with about $5,00 to $10,000, says Linkul. If you’re loading up a bigger space (think closer to 4,000 or 5,000 square feet), though, you’ll need more like $25,000, adds Kleckner.

Regardless of your space or facility focus, Linkul recommends making “want” and “need” lists in order to keep your costs down and within your budget. “What do you need in order to open and start training or coaching?” he asks. “Once you’ve got yourself established, you can start to bring in some of the equipment that you’d love to have but can survive without.”

Something else to consider: Whether having the best-of-the-best brand names really matters to you. “A Woodway treadmill, for example, is going to run you up to $13,000, while a Precor might cost you $8,000,” says Mike Alpert, a longtime health club executive and member of the American College of Sports Medicine. Think critically about whether you actually need to splurge on the household name brands; it could make the difference between sticking to or blowing your budget.

04. Utilities

Be prepared to budget for at least a few hundred, up to a few thousand dollars per month, experts say.

CrossFit gyms, for example, might forego heating and AC and just have a giant garage door they open up so that fresh air can do its thing. “But it’s a different situation if you’re in the south and need to rock your air conditioning all day for nine months out of the year,” Linkul says. Same goes for a simple non-heated yoga studio versus a larger gym filled with treadmills and other cardio equipment. The Fitness Business Association lets you search by zip code to learn more about average utility costs and rent prices, he adds.

05. Insurance

Another must-have that can save you money down the road: the right insurance. “Good insurance that covers you per client and per incident will cost you $2,000 to $3,000 per year,” Linkul says. Just how much you pay, though, depends on the type of training you do in your gym.

Be prepared to have an in-depth conversation with your insurance rep about everything from the type of equipment you have (treadmills increase your cost) to whether your clients will be barefoot (yep, that’s a consideration) in order to figure out how much coverage you need—and what you’ll pay for it.

You’ll also want to get super specific about what you’re covered for, Linkul says. “What if there's a water leak? What if there's an earthquake? What if there's a fire? What if someone runs their car through the window? If your rep says your policy doesn’t cover it, tell them you want to tack it on,” he suggests. Otherwise, when the unthinkable happens, you’ll need to shell out the cash yourself.

Another important tip: “Buy your insurance from a company that’s reputable for selling fitness insurance,” adds Linkul. “Don't use your auto insurance or your home insurance company; it just isn’t their area of expertise. Do your research and go with a company like K&K or Philadelphia."

06. Marketing and advertising

If you want to keep it simple, start with $2,500, recommends Linkul. “This is a good starting point that can get you some swag like t-shirts, tote bags, and stickers for your members, who can be some of your biggest marketers,” he says.

That said, if you want to go all out with social media ads and SEO (think Google ads), you could end up spending upwards of $1,500 a month, Kleckner says.

Friendly FYI: You can use Wix's professional features to boost traffic to your site with a powerful suite of SEO tools and run targeted campaigns. Click the link to find the best plan for your needs and read more about effective fitness marketing strategies here.

07. Legal fees

Every fitness facility needs a slew of documents—from liability waivers to member contracts to employment agreements—in order to operate without risking losing everything to lawsuits or other legal issues. (Wix Forms, which comes with your Wix Fit account, can help you keep track of this paperwork.)

“Hopefully you won’t ever need it, but it’s worth hiring a lawyer to make sure you have all of your forms done right,” says Linkul. “You want to make sure that you’ve got your T’s crossed and your I’s dotted from the moment someone walks into your facility.”

Dish out about $1,000 to $1,500 on legal help now and it could save you millions (and your business) later, he says.

08. A business license

Since a fitness facility is a business, you’ll need a business license in order to operate legitimately, says Alpert.

Typically, you’ll apply for your business license at the state level. Every state has a slightly different process (and fee), but you can expect to pay somewhere around $100 to become a registered business.

09. Permits

In most cases, you’ll need to work with your county or city to obtain permits that allow you to make improvements to your building, hang up your outdoor signage or warm up in your parking lot, Linkul says.

What you do and do not need permits for varies pretty widely from city to city, which is why Linkul recommends getting involved with your local chamber of commerce and developing a solid relationship with your local government. Luckily, though, permits don’t typically cost the average gym owner too much, he says. They may be something like $25 per permit or $150 per year.

Of course, there are exceptions. New York City, for instance, has long been infamous for requiring fitness facilities to obtain a special 10-year permit that not only takes up to six months to actually get but also comes with a hefty price tag: $50,000. Much to the relief of gym-owning hopefuls in the Big Apple, though, the city has removed this major barrier in attempts to support small businesses in the wake of the pandemic.

Still, the moral of the story is to do your homework to uncover any surprise hurdles and costs involved in opening a gym in your city.

10. Air filtration

One major stipulation for many new and returning gym-goers: They need to feel safe in your facility. And that means extra expenses for you.

“Between buying more equipment, installing air filters and going all-in on cleaning supplies, our monthly costs have increased by more than 30 percent,” Linkul says.

He recommends budgeting at least a couple extra hundred dollars per month to cover these costs—and asking your members to pay a small facilities fee so that you don’t end up in the red. “Everyone has been on board to contribute a few extra dollars so that we can have all of these extra precautions that ultimately help protect them,” he says.

If you’re still negotiating lease terms for your gym, Linkul recommends pushing the owner to make any updates needed to get the HVAC system in top-notch shape—an expense that typically falls on the tenant (and often costs thousands of dollars) but might be up for negotiation given the current rental climate.

11. Everyday maintenance and supplies

One sneaky expense you don’t want to forget: general maintenance and supplies, like towels and bathroom freebies (hair-ties, spray deodorant, toilet paper and cleaning spray). Set aside $200 to $300 per month to cover these things, Linkul says.

12. Scheduling software

Every facility needs a system to manage its bookings and memberships. The most streamlined solution: Add the Wix Bookings app to your site, or choose a fitness website template that puts your bookings front and center. You can read more about Wix's online scheduling software here.

Can I open a gym with no money? How do I pay for this?

Every fitness business advisor and consultant has a different opinion on the best way to raise the money you’ll need to make your gym ownership dream a reality. So, whether you decide to team up with a partner, accept investments from members or get a loan, you’ve got a few different fundraising paths to your goal.

“I really like our business mentees to be able to live and die by their success all on their own, so they’re not partnering, asking clients for a loan or borrowing money from family,” Linkul says. “Other business coaches will disagree and say that it’s great to partner with a client, but I prefer not to have anyone other than the bank tied to my success or failure.”

His preferred course of action: Save half of your total startup costs and seek out a small business loan or a private loan to cover the other half.

The U.S. Small Business Administration works with a variety of lenders to help small businesses score up to more than $5 million in competitive loans to support their goals. It’s also a great resource for free business counseling.

If you decide to open a gym or another fitness business, we’d love to hear about it. Use #WixFit on Instagram for a chance to be featured in a future blog article.

Factors affecting the cost of gyms

Here are some of the factors that affect the cost of gym memberships:

  • Location: Gyms in prime locations, such as downtown areas or trendy neighborhoods, will typically be more expensive than those in less desirable locations. This is because they have higher rent and property taxes.

  • Amenities: Gyms that offer a wider range of amenities, such as swimming pools, saunas, steam rooms and group fitness classes, will be more expensive than those that don't.

  • Equipment: Gyms with newer and higher-quality equipment will be more expensive than those with older or less-effective equipment.

  • Membership options: Gyms that offer a variety of membership options, such as individual memberships, family memberships and corporate memberships, will typically be more expensive than those that only offer one or two options.

  • Competition: The level of competition in a local market can also affect the cost of gym memberships. If there are a lot of gyms in a given area, they may be more likely to offer discounts or lower prices in order to attract customers.

  • Target market: Gyms that cater to a specific target market, such as luxury gyms or boutique fitness studios, will typically be more expensive than those that cater to a more general audience.

  • Operating costs: The cost of running a gym can also vary depending on a number of factors, such as the size of the facility, the cost of utilities and the cost of staff. These costs can then be passed on to members in the form of higher membership fees.

Franchise or independent gym?

Deciding between a franchise or independent gym involves weighing a series of pros and cons, ultimately depending on your priorities and goals. Here's a breakdown to help you navigate this choice:

Franchise gym

Pros of a franchise gym:

  • Brand recognition and established reputation: Benefit from an existing customer base and marketing efforts of the franchise.

  • Proven business model: Follow a tested system for operations, marketing and management, reducing trial-and-error risks.

  • Support and resources: Receive training, operational manuals, marketing materials and even assistance with finding a location.

  • Buying power: Leverage the franchise's bulk purchasing discounts for equipment and supplies.

Cons of a franchise gym:

  • Higher initial investment: Franchise fees, royalties and potential advertising fees add to the startup cost.

  • Less control over your business: You must adhere to franchise guidelines and restrictions, limiting creative freedom.

  • Shared profits: Franchise fees and royalties reduce your own profit margins.

  • Potential competition from other franchise locations: Saturation in your area might affect member recruitment.

Independent gym

Pros of an independent gym:

  • Complete control over your business: Decide on branding, equipment, services, pricing and overall direction.

  • Flexibility and innovation: Adapt to local needs and trends, offer unique programs and cater to specific fitness niches.

  • Potential for higher profit margins: No franchise fees or royalties means more of the income stays with you.

  • Building a unique community: Create a personalized experience for members and foster a strong local identity.

Cons of an independent gym:

  • Higher business risk: No established system or brand recognition, requiring more effort for branding, marketing and member acquisition.

  • Potential lack of resources: Navigating operational and marketing aspects might require external experts, increasing costs.

  • Lower buying power: May not get the same discounts on equipment and supplies as larger franchises.

  • Need for strong business acumen: Requires expertise in managing finances, marketing and operations.

Ultimately, the best choice depends on your individual circumstances and aspirations. Weigh the pros and cons carefully, conduct thorough research and make a decision that aligns with your vision for your gym business.

How hard is it to start a gym?

Starting a gym can be both incredibly rewarding and very challenging. It's not a decision to take lightly, as it requires significant dedication, financial investment and business acumen. Here's a breakdown of the difficulty level and the challenges of starting a gym:

  • Significant financial investment: Startup costs can range from tens of thousands to millions of dollars, depending on factors like location, size, equipment and amenities. Securing funding, managing budgets and controlling expenditures are crucial.

  • Highly competitive market: The fitness industry is crowded, with established players and new entrants constantly emerging. Standing out and attracting members requires a strong brand, unique offerings and effective marketing strategies.

  • Complex business operations: From acquiring permits and licenses to managing staff, equipment maintenance and legal compliance, navigating operational intricacies involves various skillsets and expertise.

  • Marketing and member acquisition: Attracting and retaining members requires consistent marketing efforts, understanding target demographics and building community engagement. It's a continuous process demanding creative strategies and adaptation.

  • Long-term resilience and commitment: Building a successful gym takes time, patience and the ability to handle unexpected challenges. Passion for fitness and a strong entrepreneurial spirit are key to staying motivated and overcoming obstacles.

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