July 6, 2023
Adam Hoeksema
There are numerous reasons why writing a business plan for your gym startup is essential, but the primary motivation for most founders is often the requirement of potential lenders and investors.
It's unlikely that you woke up this morning eagerly anticipating spending the next few days meticulously crafting a detailed plan for your business. If you're anything like me, the business plan is already conceptualized in your mind, and you're eager to dive into starting your gym rather than getting caught up in writing a comprehensive plan. Especially when there are several different types of gym business models and the variables change for each model.
However, it's crucial to acknowledge that the individuals with the financial resources you need—your potential investors and lenders—have requested your business plan and projections
So, if you find yourself in this situation, this article will provide guidance to help you navigate the following steps effectively:
With that in mind as the path forward, let’s dive in.
What Should be Included in a Gym Business Plan?
A gym business plan should effectively communicate to investors and lenders why customers would choose to join and regularly visit your gym, why you or your team are well-equipped to manage and operate the gym, and how the financial projections are tailored to secure a profitable financial outcome for their investment. Below is a comprehensive outline of our complimentary gym business plan template.
Gym Business Plan Outline
I. Executive Summary
A. Overview of the business
B. Key objectives and mission statement
C. Market analysis and target customer
D. Financial projections
II. Company Description
A. Background and history
B. Ownership and management structure
C. Legal structure of the business
III. Market Analysis
A. Overview of the fitness industry
B. Identification of target market and customers
C. Market trends and growth opportunities
D. Competitor analysis
IV. Service and Product Line
A. Description of services and facilities offered
B. Equipment and technology used
C. Description of pricing and membership options
V. Marketing and Sales Strategy
A. Overview of marketing and advertising efforts
B. Sales channels and customer acquisition strategy
C. Marketing budget and expenses
VI. Operations and Management
A. Description of day-to-day operations
B. Overview of staffing requirements
C. Management and leadership structure
VII. Financial Projections
A. Overview of revenue and cost structure
B. Projected financial statements
C. Risks and challenges
How to Conduct Market Research for a Gym Business Plan
Market research plays a vital role in developing a comprehensive gym business plan. It is crucial to gain a clear understanding of your position in the market and validate the demand for your specific gym concept, location, and pricing structure. You can delve deeper into our gym market research methodology here, but ultimately, In order to effectively conduct market research for your proposed gym, you can adapt the following strategies and tools:
Determining Advertising Costs for a Gym
To assess the cost of advertising for your gym and attract customers to your gym's website, we recommend using tools like Google Keyword Planner. This tool can help you identify relevant keywords that potential customers might use in their online searches. Additionally, it provides estimates of the cost per click for advertising with different keywords, as shown below:
Keywords Used in Customer Searches
To discover the keywords driving traffic to your competitors' gym websites, you can utilize tools such as Google Keyword Planner and Ahrefs. By analyzing reports on your competitors' websites, you can identify the keywords they rank for and the amount of organic traffic generated by each keyword. This information can guide your search engine optimization (SEO) efforts for your gym website.
Seasonality in the Gym Industry
Using platforms like Google Trends, you can assess the level of seasonality that might exist within your gym concept. For example, the graph below demonstrates that “gyms near me” in the United States is somewhat seasonal in nature. January is consistently the peak, with the late fall tending to be the low point of the season
How Many Customers Do my Competitors Receive Each Month?
To gain insights into the number of customers your competitors attract, it is beneficial to generate foot traffic reports for their gyms. This data can help you estimate the typical monthly visits for a specific location, as illustrated in the example below:
Understanding the potential customer base for your gym is a crucial factor in projecting your financial success. Analyzing competitor footfall can assist you in estimating the potential traffic to your gym, which will be a fundamental assumption for your financial projections.
How to Create Financial Projections for a Gym Business Plan
After conducting thorough market research, it's time to develop financial projections for your gym. One easy way to create financial projections is by using our gym financial projection templates which are designed to provide a solid foundation for estimating revenue projections by considering factors such as membership numbers and average class rates and more. While some gyms may be limited by the available workout space, others may have constraints related to the capacity of trainers or class schedules. Creating accurate financial projections is crucial to demonstrate your gym's potential to repay loans and offer attractive returns on investment to potential stakeholders. To accomplish this, you'll need to focus on the following key steps:
- Estimate startup costs for your gym
- Forecast revenue - either based on membership or class attendance
- Project labor costs
- Estimate your operating expenses like rent and utilities
- Calculate how much investor or loan capital you will need to open
By following these steps and utilizing our gym projection templates, you'll have a comprehensive financial outlook for your gym business, which will help attract potential investors and lenders while providing a roadmap for managing your gym's finances effectively.
Example Gym Business Plan
Presented below is our gym business plan content. To help you create your own gym business plan, we offer a downloadable Google Doc version of our Gym business plan template here. This enables you to customize it to suit the specific needs and vision of your gym. We have also prepared a video walkthrough to guide you in adapting the business plan to align with your unique gym concept.
Table of Contents
I. Executive Summary
A. Overview of the business
B. Key objectives and mission statement
C. Market analysis and target customer
D. Financial projections
II. Company Description
A. Background and history
B. Ownership and management structure
C. Legal structure of the business
III. Market Analysis
A. Overview of the fitness industry
B. Identification of target market and customers
C. Market trends and growth opportunities
D. Competitor analysis
IV. Service and Product Line
A. Description of services and facilities offered
B. Equipment and technology used
C. Description of pricing and membership options
V. Marketing and Sales Strategy
A. Overview of marketing and advertising efforts
B. Sales channels and customer acquisition strategy
C. Marketing budget and expenses
VI. Operations and Management
A. Description of day-to-day operations
B. Overview of staffing requirements
C. Management and leadership structure
VII. Financial Projections
A. Overview of revenue and cost structure
B. Projected financial statements
C. Risks and challenges
I. Executive Summary
A. Overview of the business
Our gym, called "FitLife Gym," is a new state-of-the-art fitness facility that will offer a comprehensive range of exercise equipment, group fitness classes, and personal training services to members of the local community. Our mission is to provide a welcoming and supportive environment where people can achieve their fitness goals, regardless of their current fitness level or experience.
B. Key objectives and mission statement
Our primary objective is to become the go-to fitness center for individuals in the community who are looking for a high-quality gym experience. We aim to differentiate ourselves from competitors by offering a wider range of services and amenities, including group fitness classes, personal training, and cutting-edge exercise equipment. Our ultimate goal is to create a supportive and inclusive community where members feel encouraged and empowered to reach their fitness goals.
C. Market analysis and target customer
The fitness industry has experienced steady growth in recent years, and we believe there is a significant opportunity to capture a share of the market in our area. Our target customer is primarily individuals between the ages of 25 and 55 who are interested in improving their health and fitness and are willing to pay for access to a high-quality gym experience. We also plan to target local businesses and organizations as potential corporate members.
D. Financial projections
Based on market research and our understanding of the local market, we anticipate that our gym will generate $500,000 in revenue in the first year, with a net profit of $60,000. We expect to see continued growth in revenue and profits in subsequent years as our business establishes itself and expands its offerings.
II. Company Description
A. Background and history
FitLife Gym was founded by a team of experienced fitness professionals and entrepreneurs who have a passion for helping people achieve their fitness goals. The founders have worked in the fitness industry for over a decade and have a deep understanding of what it takes to create a successful and sustainable gym business.
B. Ownership and management structure
FitLife Gym is owned and operated by the founding team, who will also serve as the key management personnel. The management team will be responsible for overseeing day-to-day operations, developing and implementing marketing and sales strategies, and ensuring the overall financial success of the business.
C. Legal structure of the business
FitLife Gym will be organized as a limited liability company (LLC), offering the founders the benefits of limited liability protection and the ability to raise capital more easily than a sole proprietorship or partnership.
III. Market Analysis
A. Overview of the fitness industry
The fitness industry has experienced steady growth in recent years, with the market expected to reach $96 billion in the US by 2026. The increasing emphasis on healthy lifestyles and the popularity of fitness and wellness have driven growth in the industry, and the trend is expected to continue in the coming years.
B. Identification of target market and customers
Our target market is individuals between the ages of 25 and 55 who are interested in improving their health and fitness and are willing to pay for access to a high-quality gym experience. This demographic is often seeking a supportive and inclusive environment where they can feel comfortable working out, regardless of their current fitness level or experience.
C. Market trends and growth opportunities
There is a growing trend towards boutique-style gyms that offer specialized services and amenities, and we believe this presents a significant opportunity for our gym to differentiate itself from larger, more traditional fitness centers. Additionally, the trend towards health and wellness is expected to continue, providing a stable foundation for continued growth in the fitness industry.
D. Competitor analysis
Our primary competitors will be other gyms and fitness centers in the local area, including large chain gyms and smaller, independent facilities. We will differentiate ourselves from these competitors by offering a wider range of services and amenities, including group fitness classes, personal training, and cutting-edge exercise equipment. We will also focus on creating a welcoming and supportive community atmosphere that sets us apart from other fitness centers.
IV. Service and Product Line
A. Description of services and facilities offered
FitLife Gym will offer a comprehensive range of exercise equipment, group fitness classes, and personal training services to members of the local community. Our facilities will include:
- Cardio equipment, such as treadmills, ellipticals, and stationary bikes
- Strength training equipment, including free weights and weight machines
- Group fitness classes, including yoga, spin, and high-intensity interval training (HIIT)
- Personal training services, with certified trainers available for one-on-one sessions
- A private stretching and recovery area, including foam rollers and resistance bands
B. Equipment and technology used
We will invest in high-quality, commercial-grade equipment from leading fitness brands, including Life Fitness, Hammer Strength, and TRX. Additionally, we will utilize cutting-edge technology, such as virtual personal training and mobile apps, to enhance the overall gym experience for our members.
C. Description of pricing and membership options
We will offer several membership options, including monthly and annual memberships, as well as corporate memberships for local businesses and organizations. Personal training services will be offered at an additional cost, with packages available for both one-on-one and small group sessions. Our pricing will be competitive with other gyms and fitness centers in the local area, with a focus on offering value to our members.
V. Marketing and Sales Strategy
A. Overview of marketing and advertising efforts
We will utilize a multi-channel marketing and advertising strategy, including:
- Social media and digital advertising, including targeted Facebook and Instagram ads
- Local print and online advertisements in relevant publications and websites
- Promotional events and partnerships with local businesses and organizations
- Referral programs for current members
B. Sales channels and customer acquisition strategy
Our sales channels will include online sign-ups, in-person tours and consultations, and corporate memberships for local businesses and organizations. We will also offer trial memberships and special promotions to attract new members and generate word-of-mouth referrals.
C. Marketing budget and expenses
Our initial marketing budget will be $50,000, with ongoing marketing expenses accounting for 5% of our overall operating budget. We believe that a strong marketing presence is essential to establishing our brand and attracting new members, and we are committed to investing in a comprehensive marketing and advertising strategy.
VI. Operations and Management
A. Description of day-to-day operations
Day-to-day operations at FitLife Gym will include tasks such as staffing and scheduling, equipment maintenance and repair, and customer service. The management team will be responsible for overseeing these tasks, ensuring the gym is running smoothly and efficiently at all times.
B. Overview of staffing requirements
We will initially hire 5 full-time employees, including a manager, 2 certified personal trainers, and 2 customer service representatives. As the business grows, we may add additional staff as needed to meet customer demand and support the growth of the business.
C. Management and leadership structure
The management team will consist of the founders, who will also serve as the key decision-makers for the business. The manager will be responsible for overseeing day-to-day operations and ensuring the gym is running efficiently, while the personal trainers will be responsible for delivering high-quality training services to members. The customer service representatives will be responsible for responding to customer inquiries, managing member accounts, and providing support as needed.
VII. Financial Projections
A. Overview of revenue and cost structure
Revenue will come primarily from membership fees, with additional income generated from personal training services and corporate memberships. Our costs will include rent and utilities, equipment and supplies, staffing and salaries, marketing and advertising expenses, and general operating expenses. Our startup cost requirements will total around $600,000 which includes working capital to cover cash losses until break even as well as equipment and leasehold improvements. We will use an equipment loan, SBA loan, and personal investment to cover the startup costs.
B. Projected financial statements
Our projected financial statements, including income statements, balance sheets, and cash flow statements, will be based on our business model, industry trends, and realistic assumptions about membership growth and expenses. We project steady revenue growth over the next 5 years, with an estimated break-even point after the first 2 years of operation.
C. Risks and challenges
As with any new business, there are inherent risks and challenges that we must be prepared to face. Some of the key risks and challenges we anticipate include competition from other gyms and fitness centers, changes in consumer behavior and preferences, and unexpected economic downturns or changes in the local business climate. To mitigate these risks, we will focus on delivering high-quality services, building a strong brand and reputation, and maintaining a flexible and adaptive business model that allows us to quickly respond to changes in the market.
All of the unique financial projections you see below were generated using ProjectionHub’s Gym financial projection templates. Purchase includes a gym membership and class-based gym versions. Use PH20BP to enjoy a 20% discount on the template.
Projected Financial Summary:
Annual Sales, Gross Profit and Net Profit:
Key Financial Ratios:
Watch how to create financial projections for your very own gym:
Income Statement:
Balance Sheet:
Cash Flow Statement:
VIII. Conclusion
In conclusion, we believe that FitLife Gym has the potential to be a successful and profitable business, providing an innovative and community-focused fitness solution to the local market. With our extensive experience in the industry, passion for fitness, and commitment to excellence, we are confident in our ability to make this business a success.
Gym Business Plan FAQs
What are the key components to include in a gym business plan?
A gym business plan should include sections on executive summary, company description, market analysis, target market and services, gym equipment and facilities, pricing and membership options, marketing and promotion strategies, staffing and trainers, and financial projections.
How can I choose the ideal location for my gym?
When selecting a location for your gym, consider factors such as accessibility, visibility, parking availability, proximity to residential areas or workplaces, competition in the area, and the potential to attract your target market. A convenient and visible location can help drive membership.
Do I need to provide specialized training or certifications for my gym trainers?
Providing specialized training or certifications for your gym trainers can enhance their credibility and expertise. Consider certifications such as personal training, group fitness instruction, or specialized programs (e.g., yoga, Pilates) to ensure your trainers are qualified to offer a wide range of fitness services.
How can I estimate the financial projections for my gym?
Financial projections for a gym should include estimates for start-up costs, monthly expenses (rent, utilities, equipment maintenance, staff salaries), projected membership revenue based on pricing and expected member count, additional revenue streams (personal training, classes), and a break-even analysis.
