There are often misconceptions concerning the requirements to open a small gym. Too many entrepreneurs who love fitness think that all it takes is some space, gym equipment, and a membership fee schedule. No sweat…right? That kind of thinking is a recipe for failure because a small gym open to the public is a businesses. As is true for any business, there are a lot of details that must be anticipated up front and managed as time goes by to achieve success. Approaching a startup with the wrong idea about what it takes to start and grow a business is often reflected in poorly developed business plans, and investors will quickly detect the fitness expert’s lack of business acumen.
Entrepreneurs need to sit down and carefully think through their vision for the fitness business. Is the vision to help young men become muscular adults through weight lifting training programs? Is the vision more along the lines of opening a neighborhood gym in an area where local women can quickly and easily access the facility while the children are in school, before or after work, or in the evenings? Obviously, the two business models will be quite different, and the answers determine the type of fitness equipment, services, hours of operation, and so on.
Following are some other points to consider:
• Is this a unique start-up or opening a franchise?
• Who is the targeted population? Describe the demographics in detail because the targeted clientele impacts everything from choice of location to hours of operation. Demographics include income brackets, average age, marital status, employment status, economic status of the market area, typical lifestyles, and so on?
• Why is the selected location considered ideal? Is it in a suburban retail mall in the center of a neighborhood meant to attract a middle-class membership? Is it in a remodeled warehouse that can accommodate serious weight lifters? Is it a free-standing gym targeting families, athletes, or the general population?
• Does the marketing plan support the choice of location and sales projections? How will membership grow, and what strategies will be used to generate a steady supply of new client leads?
• What fitness programs and services will be offered? Will there be ancillary services like nutrition counseling, weight loss, pilates, massage therapy, nutritional and fitness products, personal training, and so on?
• Is the space owned or leased? Small gyms are typically located in retail space, so there is a lease. The lease payment amounts, terms of the lease, escape clauses, and so on, are investor considerations.
• Financing is a major issue. How much capital is needed to pay for initial lease costs, fitness equipment purchases or leases, personnel costs, franchise fees, etc?
• What are the plans for steady growth? One of the common mistakes small gym business owners make is trying to do too much at once. Many small gyms start with very little space and equipment but have definitive plans for growth that depends on slowly developing a loyal customer base?
• What experience does the business owner have in the fitness industry and in management?
• Do the financial statements reflect all business expenses, including business and liability insurance, building and equipment lease or loan payments, personnel expenses, legal expenses, maintenance expenses, and so on?
A small gym should start “small” because over reach can quickly lead to financial problems. It does not make sense to buy equipment that gym members are not likely to use or to commit to a lease for a long time period until the fitness center has been operating for at least a year. Many times gym owners discover they need to relocate to better serve the targeted clientele, or they quickly run out of space.
Turning a passion for fitness into a successful business can be a very rewarding with the right planning. To ensure the small gym business plan is industry-specific and the enterprise starts on the right footing, take advantage of the expertise offered by OGS Capital professional business consultants.
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