The costs associated with starting a gym or fitness center will depend on size, location, equipment, number of employees, and overhead expenses. Everybody has a different vision for their gym so writing an article with an exact number on how much it will cost to start a gym is not realistic, but after with the experience starting several gyms and working with others to start theirs, here are some things to think about.
Most gym owners I’ve talked with start their gym in the range of $150,000 – $300,000. There are many gyms that start for under $50,000 but those are the exceptions rather than the norm from what I’ve seen. That’s a wide range, but how can you figure out what it will cost to start your gym?
Starting on a business plan early is a good idea. What I recommend people doing is to figure out what it will cost to get started. The three largest expenses will be real estate, gym equipment and renovation costs to get the location ready such as construction, painting, carpeting, etc) Next, figure out the overhead. One of your larger and unexpected expenses is liability insurance. Even though you will have forms saying you aren’t liable, people do sue gyms for personal injury. The sad thing is that a member’s stupidity can end up wiping out your business if you don’t have adequate insurance. Get actual quotes on these things and don’t guess. Take the time to figure it out now, rather than start your gym and find out too late that it has no chance to survival.
Now figure out how many members it will take to make you enough money to live off of. Most people, when they find out how much it’s going to cost to get started quit at this point since it’s the number of members needed are so high that it just isn’t realistic to make any money.
If you make it past the feasibility stage, you need to find out how get funding for your gym – and you thought the feasibility stage was hard. Banks won’t finance the whole deal and you will probably won’t find an investor unless you have a wealthy friend who believes in your or also likes to work out. In some cases, depending on the bank and any government guarantee program you can get your down payment to 10% of the total gym startup cost (provided you have some external collateral to offer the bank) but 20% to even 50% is a more realistic number. Gyms are a high risk business due to the high failure rate and will typically require a higher down payment, collateral or co-signers.
The best advice here is that the less debt you start off with will give you a greater opportunity of succeeding. Almost half of the gyms I’ve worked with went under within six months since they borrowed so much to get started, the monthly payment just wasn’t realistic for them to pay. You may find your ideal gym is a bit risky without knowing how many people will actually join but the option exists to start small and grow later.