Do you want to start a gym house and you want to know the cost breakdown? If YES, here are factors that determine how much it cost to open a fitness center.
Gym business is gaining more grounds in recent times than it was in the 20th century. Now statistics has it that there is a steady increase in the number of people that enroll in gyms and the fact that gym facilities are closer to residential areas makes this possible.
In order words, the increase in the number of people that enroll in gyms translate to an increase in the revenue generated by these facilities.
Some people enroll in gyms not because they don’t have the money to purchase some of the basic gym equipment but because exercising regularly requires discipline and that is part of what they stand to gain when they enroll in a gym.
Estimated Cost Breakdown to Start a Gym House
These are the key expenses you are expected to make when starting a medium scale but standard gym in the United States of America;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
- Marketing promotion expenses for the grand opening of the gym in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant (including writing business plan) – $2,500.
- The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
- The cost for leasing a standard facility in a good and centralized location – $350,000
- The cost for remodeling the facility and construction of a gym and Olympic size swimming pool – $300,000.
- Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
- The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for start-up inventory and gym machines and equipment (Resistance bands, Weight machines, Flexion machines, Pull-up bars, Wall bars, Weight training, Elliptical trainer, Street-Strider (elliptical cross trainer on wheels), Exercise machine, Dumbbells, Kettlebells, Exercise, Fitness (biology), Treadmills, Hojo undo, Pull-up bar, Medicine balls, Boxing Gear, Gym flooring, Barbells , Cable Attachments, Weight plates, Benches, Wearable items as proper foot-gear, gloves, and hydration packs, Filing Cabinets, Noticeboard and Staff Uniform et al) – $500,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost of purchase and installation of CCTVs: $5,000
- The cost for the purchase of furniture and gadgets (Telephone, printing machines, flat screen TVs, sound system, computers, tables and chairs et al) – $25,000.
- The cost for building and hosting a website – $600
- The cost for opening party – $8,000
- Miscellaneous – $10,000
Total Cost of Small Scale Gym: $250,000 to $500,000
Starting a small scale but standard gym without a swimming pool that can only service a handful of clients per–time and with fairly used gym equipment in the United States of America will cost about two hundred and fifty thousand Dollars to five hundred thousand Dollars ($250,000 to $500,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.
Total Cost of Medium Scale Gym – $1.5Million
You will need an estimate of one million, five hundred thousand Dollars ($1.5M) to successfully set up a medium scale but standard gym in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a standard Olympic swimming pool.
Total Cost of Large Scale Gym – $5Million
When it comes to starting a standard and large scale gym with several outlets in key cities in the United States of America.
For example, a gym that can accommodate over twenty clients per-time and a company with the intention of selling franchise and also offering complimentary services.
You should look towards budgeting well over five million Dollars ($5 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.
Cost of Buying a Gym Franchise – $80,000
In the United States of America, the Average Cost of Purchasing a Gym Franchise is $80,000. Examples of 3 Well – Known Gym Franchising Companies in the United States of America are;
- Anytime Fitness – 2,000 Locations, Est. 2003
- Life Time Fitness – 109 Locations, Est. 1992
- Gold’s Gym – 400 Locations, Est. 1965
In as much as opening a gym is capital intensive, it is important to note that the overall cost of opening a gym may not be the same across the board. This is so because certain key factors can influence the cost of opening a gym.
Factors That Influence the Cost of Opening a Gym
-
The Location of the Gym
Real estate prices and the popularity of the area where you want to open the gym can impact lease or purchase costs significantly.
For example, if you settle for a location in any of these cities; Cleveland, Ohio, Memphis, Tennessee, Oklahoma City, Oklahoma, Birmingham, Alabama, or Wichita, Kansas, you are going to spend less on rent or lease. B
ut if you settle for San Francisco, California, New York City, New York, Los Angeles, California, Seattle, Washington, or Boston, Massachusetts, then you should be ready to pay expensive rent or lease.
-
Size of the Gym
There are different sizes when it comes to a gym, and the bigger the gym you want to open, the more expenses you will incur.
If you settle for a smaller space to open your gym, you will spend far less when compared to someone who chooses to open his or her gym in a large facility.
In essence, the square footage of the facility you want to open your gym can influence your construction and operational expenses which in turn will add to your overall startup cost.
-
Gym Equipment Type and Quality
If you are planning to open a gym, you should budget for gym equipment such as treadmill, elliptical machine, stationary bike, rowing machine,
Smith machine, power rack, dumbbells, barbells, weight benches, cable machines, leg press machine, Lat pulldown machine, stability balls, kettlebells, medicine balls, TRX suspension system, resistance bands, stepper machine, battle ropes, and yoga mats et al.
Apart from the fact that it will cost you a significant part of your startup capital to get all these gym equipment, it is your important to note that high-quality gym equipment can be more expensive but may attract more members.
-
Your Choice of Amenities
If you are planning to open a gym, then you should budget for additional features such as Locker rooms, Showers, Saunas, Steam rooms, Massage rooms, Group fitness studios, cycling studios, Personal training area, Smoothie bar, Snack bar, Lounge area, Childcare facility,
Outdoor workout space, Indoor track, Climbing wall, Pro shop, Physiotherapy services, Wi-Fi access, Audiovisual entertainment, and Member lounge.
Other equipment you may include in your gym are: Olympic size swimming pool, Resistance bands, Weight machines, Flexion machines, Pull-up bars, Wall bars,
Weight training, Elliptical trainer, Street-Strider (elliptical cross trainer on wheels), Exercise machine, Dumbbells, Kettlebells, Exercise/Fitness (biology), Treadmills, Hojoundo, Pull-up bar, Medicine balls,
Boxing Gear, Gym flooring, Barbells , Cable Attachments, Weight plates, Benches, Wearable items as proper foot-gear, gloves, and hydration packs, Filing Cabinets, Noticeboard and Staff Uniform et al.
For instance, if you live in the united kingdom and you decided to import the gym equipment listed above from Japan, you will pay same price for this equipment no matter the part of the world you live in, the only variation will be the cost of shipping the goods to your destination.
-
The Cost of Renovations, and Modifications
If you are not going to build your gym facility from scratch, then the likelihood is that you will have to budget for renovation and modification work in the facility.
This is so because the facility you rented or leased will usually not fit into the kind of facility you need. For that reason, you should have a budget for renovation. This will form a significant part of your budget even though it will not be as high as the amount you will spend if you are building the gym facility from scratch.
-
Licensing and Permits
The licenses and permits required to open a gym can vary depending on the location and the specific regulations in your area.
However, if you are looking to open a gym, then you must be prepared to get a general business license, zoning and land use permits, health and safety permits, a building permit, occupancy permit, signage permit, fire department permit, music license, alcohol license (if applicable) and state or provincial licensing.
-
Staffing Cost
The fact that you cannot operate a gym facility alone means that you will need employees to work with. You should consider the cost of hiring qualified staff members, such as experienced trainers, administrative personnel, and support staff.
Note that the number of employees you are expected to hire for your gym will depend on the size of the gym facility, the amenities, and your service offering. When it comes to starting a standard gym on a large scale, you would need the services of the following professionals;
- Gym Manager (Owner)
- Human Resources and Admin Manager
- Accountant/Cashier
- Marketing and Sales Executive
- Exercise Physiologists and Body Builders
- Trainers
- Training Assistants
- Cleaners
- Security Guard
-
The Cost of Marketing and Advertising
Establishing a strong online presence, creating a website, developing marketing materials, and advertising your gym and service offerings across different online and offline platforms will incur reasonable expenses.
In essence, you should have a budget that will cover your business website design, online and offline marketing campaigns, printed materials, and business cards.
Depending on how big you want to announce your presence in the market, you should have a budget estimate of $1,000 to $5,000 or more.
-
Technology, and Security Systems
These days, people are concerned about their security hence they will always go to places where they are certain their security is guaranteed. This is the reason why if you intend to open a gym, you must have a budget for technology and security systems.
You will need technology when it comes to implementing fitness tracking systems, member management software, and other tech solutions that will help you efficiently run your gym facility.
Apart from that, you will need to spend money on installing surveillance cameras, access control, and other security measures.
-
The Cost of Insurance
Lastly, in the United States of America, it is considered illegal to operate a business without having some of the basic insurance policy coverage in place.
It is important to have appropriate insurance coverage to protect your gym from potential liabilities. You should make plans to purchase general liability insurance, professional liability insurance, property insurance, workers’ compensation insurance, and medical insurance.
Note that the cost of insurance for a gym will depend on various factors, including the size of the facility, amenities, and the services you are offering.
Financing your Gym House
One of the most common funding options is the use of a Small Business Administration (SBA) loan. This will likely offer the most competitive rates and allow you to allocate funds to be used toward tenant improvement (TI) costs (flooring, lockers, mirrors, etc), and equipment. However, the application and approval process is rather extensive and may not work with your business timeline.
Other gym owners prefer utilizing equipment leases or finance options directly through the fitness equipment manufacture, as this offers a great deal of convenience.
However, rates may not be as competitive compared to an SBA loan or third party leasing/financing company but the terms are generally very straight forward and have no hidden fees.
Unfortunately, the lease amount is only applicable to the company’s equipment so TI and other equipment cannot be included. You should give a good thought to the following concerning your finance;
- Ensure that your financial strategy is within your means and conducive to continued growth.
- Read the fine print and be cognizant of any early pay off penalties.
- Know the difference between leasing to own and a residual lease.
- Partner with an equipment manufacture that has a high resale value and continues to manufacture parts for older models.