Can Small Gyms be Profitable?
In the world of gym ownership, there are three surefire ways to boost profit:
- Increase membership revenues
- Host bootcamps
- Sell merchandise
Understanding Gym Financials
When considering the financials of owning a gym, it is important to understand the different financial models that can be used. This means that you need to make at least $46,000 in order to start making a profit. Starting a gym will require both a written business plan and a loan. According to Entrepreneur, the average cost of opening a gym is $10,000 to $50,000. Lenders will not consider a business loan application without a complete business plan attached.
Strategies for Gym Profitability
To be successful, you need to understand the obstacles that gym owners face and how to overcome them. Some of the best strategies for boosting your gym’s profitability include offering personal training services, implementing fitness classes, and selling merchandise.
Average Revenue of a Small Gym
What is the average revenue of a small gym? Revenue and profit vary by size. However, it’s typical for a gym to generate between $1,000 and $2,000 a month in revenue within the first 6 months.
Additional Revenue Streams
To be profitable, a gym model typically revolves around several key revenue streams. The most basic is the gym membership. However, membership dues or fees are typically not enough to make gym owners rich. This is why most gyms supplement their core revenue stream with supplemental revenue from fitness classes, juice bars, tanning salons, and renting space to personal trainers.
Diversifying Revenue Streams
Increasing your gym business valuation (for Sellers). It’s impossible to make a failing gym profitable overnight. To make more money, you’ll need to diversify your revenue streams. This strategy has the potential to reduce business risk while also increasing profitability. Successful gyms diversify into different revenue streams instead of earning revenue from the core business. This acts as a protective shield for your business and makes you competent enough to cope with economic changes.
Costs of Opening a Gym
Here’s a list of all the checks you’ll need to write along the way. Starting a gym will require both a written business plan and a loan. According to Entrepreneur, the average cost of opening a gym is $10,000 to $50,000. Lenders will not consider a business loan application without a complete business plan attached. If you offer subscriptions (instead of classes-only gyms), you should forecast membership revenue simply by multiplying the number of active customers by the respective monthly fee.
Starting a Gym Business
Want to start a gym business? Here are the costs associated with opening a new gym, from buying equipment to renting a space to hiring personal trainers. This presents massive potential for aspiring gym owners to enter the business and open health clubs of their own.