How To Open a Gym in the US
We have compiled an extensive in depth guide which covers everything you need to consider when looking to open a gym in the US from the exciting things like what type of gym and which equipment you may need to the crucial details which often get neglected such as the type of insurance you’ll need with real quotations we obtained from our customers.
Unless your are opening a gym for the goodness of humanity as you look to save the human race from evolving into some form of couched potato then as with any other business you MUST also formulate some form of business plan to ensure you are able to provide the best possible service whilst also generating a profit.
Things to consider when opening a gym in the US?
Having worked alongside many gym owners within the industry both before and after opening their doors we have had the privilege of gaining incite into the critical areas which seem to play a key role of determining the success of new Gym Start-ups when opening a new gym in the US.
We have documented the secrets to success of current gym owners after working with them extensively over the past few years as they look to expand their current business through the acquisition of new gym equipment and look to offer their customers a continued better service as they strive for excellence.
Through our work within the industry we have identified five initial areas which play a crucial role in determining the success of a new gym which are;
- Type of Gym
- Costs – Directly Related to the Type of Gym Chosen
- Rules & Regulations
- Local Need – Market Research
The Different Types of Gyms you can open
All Gyms were not created equal, as fitness has evolved so to have the type of facilities which are open to the public offering different types of training which look to tap into the different subcultures within the fitness industry.
- Traditional Bodybuilding Gym
- Traditional Commercial Gym
- CrossFit Gym
- Boot camp Class Based Gym
- Selective Gym ( Female only, Strongman, combat sports)
Traditionally, gyms where of two kinds, one was for hardcore bodybuilders who liked to train in pyjama pants and rock bandanas and the other was commercial gyms for those who liked to pretend they went to the gym but really just played table tennis or sat in the sauna!
In 2023 however the fitness industry has become one of the fastest growing industries in the world driving economic growth through cult-like mentalities where groups of people meet up on regular occasions to train like there life depended on it! This of course is now called CrossFit but it is one of many examples where subgroups have popped up within the fitness industry which can significantly alter the type of gym you will open, the type of equipment needed and the costs etc.
Boot camp style gyms have also seen a huge rise in popularity as those who lack will power but have plenty cash are happy to part with more than necessary too ensure they are pressured into coming every week and join the group to get drilled like the latest recruits to an army platoon. Boot camp style gyms happen to be one of the most profitable to as they are often paid on a per session basis and require very little equipment in comparison to their other counterparts. What they do require however is a great team who are able to cultivate a tribe like mentality amongst their members fostering an environment where members love to come and train and be pushed to their own limits. Their success is often dependent upon the owners ability to create a one to one feel with a large group of people which isn’t easy and most definitely requires a high level of social skills and fluency!
Selective Gyms are also gaining popularity, that is those who are specifically opened for a select group of people. For example a female only gym restricts access by gender and automatically cuts your potential membership by about half, but what it does do is provide a space where woman who may not have other wise trained can do so and feel comfortable. So although it may seem illogical on the surface from a business perspective the deeper you dive into it then the more sense it starts to make as you could potentially unlock a new sector of the market which other gyms have not had access to.
How to open a gym in the US? Secrets to Start-up Success
There are four key areas which determine the total cost of opening a new gym within the US.
1. Premise (rent or buy)
2. Equipment (Determined by Type of Gym Opening)
The first expense to consider when opening a new Gym in the US is how you are going to secure a premise. When looking for commercial property there are two methods each of which have different costs. If you are going to lease/rent a premise which you will then use as a gym the commercial rent will be determined by the minimum Square Foot Required for a gym and its location and often can range anywhere between £1000-£3000 Per month. The other option is to purchase either the building or land on which you will build which is a much greater cost initially but offers a much more secure position for the businesses finances later on after it is established.
As previously stated in the first section the cost of opening a gym also depends on the type of gym you are looking to start. Traditional bodybuilding style gyms can cost a minimum of £100,000-£150,000 if you are looking to purchase the plate loaded machines needed. CrossFit Gyms can be started around Five Times cheaper as they only require basic functional equipment such as power Racks or Gym Rigs along with a few expensive pieces of cardio equipment! These figures are of course only referring to the start up cost of the equipment itself and does not account for any premise or staffing expenses which must also be taken into account.
In 2021 statista reported that 7.2 thousand health and fitness clubs in the United States, with over 10 million combined members. The research also pointed out that the US had the second highest number of gyms in the EU which combined generated over 2 Billion pounds in revenue.
Just like any other business when you are looking to start a gym in the US you need to understand the economics. In its most basic sense that is, how the gym will generate revenue and the expenses accrued in the process of doing so. After which you then must deduct the expenses from the revenue and like magic you are left with the potential profit from running the gym.
Thus you must also consider how the gym will generate income and which revue streams it will rely on most those again are linked somewhat to the overarching type of gym you are looking to open but are not always limited by the choice. For example you may open a traditional fitness style gym but run CrossFit classes as a means of attracting new customers and increasing the amount of revenue. Likewise you may look to offer customers a deal to good for offer in the current cost of living crisis and have everything under one roof which is all rolled into one convenient monthly subscription.
A quick comparison of the two average monthly memberships along with the start up costs highlights a very interesting point. Could the rise of CrossFit be purely driven by economics? That is due to the fact that opening and running a CrossFit gym costs significantly less than a traditional style gym yet generates over double the amount in revenue for a single membership. CrossFit has been renowned for its cult like mentality and given the leaders of such cults are often motivated by power and money not the good of humanity it provides a strong basis for the surge in CrossFit being nothing more than hungry businessmen looking to capitalise off ones innate drive for tribalism and fitness!
The next cost to consider in your bulletproof business plan to launch your own gym in the US is staff and how much they will or wont be needed. The digitalisation of just about everything saw a rise in 24H gyms which would rely on automated processes to enable the gym to essentially run itself the majority of the time with staff only really being their within a personal trainer capacity to try and maximise profits. This approach however isn’t for everyone, and although they may like being able to to Tabata sprints on the treadmill at 4AM in the morning whilst no one else is in the gym some actually go to the gym for the exact opposite. The gym for many is nothing more than a chance to socialise and destress and the staff make up a key part fulfilling that service to the customer. Hence when looking to position your new gym within the market these factors may seem small but will have a significant impact on the type of gym and culture you are creating and thus directly effect the success or failure of the business.
When you are creating a business plan for your new gym the message and ethos must be consistent across the board if you are to deliver the product which the customers have come to expect. The economics will also play a key role within the viability of the business as gyms are often open long and late hours so if you are going to have someone working from dusk till dawn then that must be factored into the balance sheet when looking at potential revenue and profit.
Last but certainly not least is marketing, The most overlooked and undervalued aspect of just about every business. Without sufficient marketing your new gym will never hit the ground running. You may have the best gym with the best equipment and great staff who are very knowledgeable about all things fitness, but if nobody knows then it will soon cease to exist. Another misconception around marketing is it is seen as a singular thing which happens at specific stages within a businesses life IE when it is started and when things aren’t going so well. This approach is almost certainly doomed to fail as marketing should be seen as a part of every day functioning just like HR and the boots on the ground!
Marketing is about running social media campaigns to let people within the local area know your open for business and have great services to offer but its also how your staff communicate with the customers on a day to day basis, its how you will give the members advise and tips on bettering their health and wellbeing without sending them an invoice straight after for the personal training advice you may or may not have given them.
Marketing is the establishment and maintenance of a business reputation which looks to assert your place within the market and is often the most important and overlooked aspect of every business. Get it right and you are on a flywheel to success as the good word inevitability snowballs into never-ending expansion, get it wrong and customers either wont know what you have to offer, or even worse you fail to meet their expectations in regards to your offer and then the bad reviews and negative spiral begins.
In conclusion, opening a gym in the US involves several key factors all of which must be considered in both the stat up costs and the day to day expenditure of any good business. Those include the premise, equipment, staff, insurance and marketing. The cost of leasing or buying a premise can vary depending on the location and minimum square footage required for a gym. The cost of equipment can also vary depending on the type of gym you plan to open, with traditional bodybuilding style gyms costing significantly more than CrossFit gyms. Staffing costs will depend on the type of gym and culture you plan to create, with 24-hour gyms relying on automated processes and personal trainers, while other gyms may require staff to provide a social and stress-relieving atmosphere for customers. Finally, marketing is crucial for the success of a gym, and it should be integrated into the daily functioning of the business rather than just a one-time event. By considering these costs and factors, you can create a bulletproof business plan for your new gym and increase your chances of success in the competitive fitness industry.
How Much Does it Cost to Open a Gym in the US?
Concluding Thoughts when looking to start a gym in the US
Opening your own gym because you love all things fitness is a great start and most definitely places your first foot on the ladder to success. However it does not necessary mean your new gym will be a success unless you have carried our extensive market research to understand what people within your local area want or are missing in regards to the type of gym/service offered then that you also understand the economics of how to start run and maintain a successful business.
A key understanding is needed in regards to your actual business model and one distinction which is often missed is that gyms lie within the service industry, you are essentially providing your customers with a service they wish to make use of. Whether that be high fives in cross fit or bench presses in a dark musty room your are looking to offer those customers a particular service they seek to utilise hence a focus on that approach together with marketing and customer relations will provide the fundamental building blocks to running your own successful gym.