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Starting A Gym for Under $10K

Starting A Gym for Under $10K

Part 2: Starting a Gym for Under $10k…Or More

Before we dive in, we recommend that you to first check out part 1 of this series.
And, you may also want to read and watch the training video on 9 ways to make money as fitness trainer.

Now, let’s continue to discuss starting a gym for under $10,000.

We have discussed rent, and now that you have a better idea of what that may be, let’s look at the other expenses and what it will take for you to get your gym or facility started!

Now, before we move on, we want to let you know that we’re talking about research that I have done, but more importantly, I’m talking from experience and what I have gone through in both my first space, which was very low budget, and my second space, which was a more significant investment.

You can learn more on the topic of starting a profitable fitness business in Personal Trainer Magazine.  Get your free issues.

Although I didn’t have much money the first time around, I was still able to open up without any debt. By the time I moved into my second space, even though it was a bit of an investment, I cashed it out and within a month didn’t owe anyone a dollar. I will give you advice on how I did it; although you may have to take a different route, it may open up some possibilities that you didn’t consider before.

If you are planning to get a loan (and you can get one), you must have an idea of what you will be getting and how much you will need.

Here are a couple of quick tips before you get a space for your gym. Since you’re not going to make this decision and open up the week after, it’s good that as soon as you decide to make this entrepreneurial move, you prepare yourself by:

  • Purchasing equipment months ahead of time, including mats, turf, and other things you know you will need. I knew I wanted a gym and was prepping for it for months, and leading up to that, and I dedicated money from individual training sessions toward equipment. That way, once I went into the new place, I already had around $2000+ worth of training equipment, and I didn’t have to purchase as much to move in.
  • Look into any fees, licenses, and permits that you will need, as those can add up. I didn’t do enough of this, but I was smart enough to put a little money aside from what I made just for that, so when the time came, I was much more organized with what money I had for which purpose.
  • With most lease situations you will have to put down first and last month’s rent as a deposit. Although everything is negotiable, the chances of you having to do that are very high. I expected it and had a really good month from training and sales a couple of months previously, and I also run a paid in full (annual boot camp) promo through all the people I knew and trained, which brought in some cash influx to cover the deposit. I also had some excess money, so I ended up paying for the first 4 months’ rent (I got a month for free since I only did a year lease and then month to month from there).

You have to know that opening up space is much more than just buying equipment and setting it all up. Here are the three things you have to consider, as well as my experiences and advice with them.

Build-Out Costs

Build out can range from a couple grand to $100k,  depending on what you’re opening. When opening your first facility, you should look for something that has a minimum amount of build out needed and something where the landlord will give you a lot of TIs (tenant improvement $) to get it done.

My first location was a garage, and we didn’t do any build-out whatsoever (I couldn’t afford it). It was an open space, and we made it look as good as we could with the resources we had, brought in some talented graffiti artists to give the place character. I only had a year lease there with a month-to-month rollover after that, which influenced that decision.

My first small warehouse gym, no build-out costs, and low overhead, but a great atmosphere, training, and results. It still grew and succeeded.

It’s important to know that my mindset had always been to start out without any loans, even though I didn’t have much money or any investors. My father taught me to do as much as possible with what I had.  I believe in the low-overhead, higher profit model. I was only going to move to a bigger location when we were packed to the walls, and I had money to move without loans again.

I know many trainers want to start with their “dream space” and it’s also the reason why they take big loans and start with a high overhead, making it harder to break even and get out of debt. This is my personal experience, but cut down on the “bells and whistles” and do the best with what you know you can afford, and go crazy with over-delivering on service, results, experience, support, and atmosphere.

My current location had a $50k investment when it was all said and done. 4,700 square feet and everything custom to our brand. I didn’t move until I had the resources and money (no loans!).

Gym Equipment

The range here is between $5k – $50k. My perspective is that you should start with getting all the things you NEED vs. the things you WANT.

Since I’m anticipating that you will be running a business that does both boot camps and semi-private or private personal training, you’ll need certain equipment to cover your needs.

The great thing is that you can start boot camps with mostly bodyweight training and still make it challenging, effective, and fun, while for semi-private training, you’ll need certain equipment. If possible though, invest in equipment for group/ boot camp training that doesn’t cost as much, but has a variety of uses. The list would be:

  • Jungle Gym XT (or TRX)
  • Kettlebells
  • Dynaballs, no bounce Medicine Balls, Sandbells
  • Bands
  • Ropes
  • Valslides
  • Sandbags
  • Plyo Boxes
  • Agility Ladders

Get bang for the buck tools that can do many things.

There are certain things I would add to the list for the semi-private training personal training requirements:

  • Adjustable Bench(es)
  • Dumbbells
  • Barbells
  • Squat Rack
  • Olympic Platforms (self-made yet professional looking)
  • Sleds/Prowlers
  • Airdyne Bikes
  • Weight Vests
  • Hurdles

See the Equipment Startup Essentials section for a recommended equipment list with pricing from certain suppliers that will show you different budgets of what you can get for under $10k.

The most important thing to remember is that there is usually a big difference between what you think you need and what you need to get started. I also wanted to have everything and the most amazing-looking facility from the start, but I didn’t want to go into tons of debt and start in the red.

I got the essentials, the equipment I knew I needed to get people amazing results (which isn’t much if you understand training) and I knew my focus would have to be getting the best results possible, creating a great environment and atmosphere, as well as giving the support needed and building strong, loyal relationships with my clients. I knew I would have to over-deliver in all the other areas.

With profit, I consistently added equipment and upgraded the gym little by little and saved for the big move in the years to come (it took me a bit more than 2 years to go into space 5x the size and profit right away).

Here is the exact equipment list I had when I started my gym in a small warehouse that was around 1,000 square feet:

  • Squat rack (used)
  • Half rack (used)
  • DB Set from 5-70 lbs (used)
  • 3 Barbells
  • Trab Bar
  • 500 lbs of plates
  • Medicine Balls from 3lb -15 lbs
  • Bands
  • 18 Kettlebells (ranging from 18 lbs – 90lbs)
  • Rings
  • Cones and hurdles
  • Ropes (got these from marina store for very low cost)
  • Valslides
  • 1 Prowler and 1 sled
  • Plyo boxes (donated by high school)
  • Strongman equipment (farmers walks, chains, tires, slosh pipes, sandbags) ⇒ all made by a client or received for free

Your USP (Unique Selling Proposition) is not going to be that you have the nicest equipment. Instead, focus on the service, results, and experience the best you can with what you have, and build from there. That way, when you can move into a bigger and nicer space, your foundation will be laid down, and you will only improve and grow from there, and most importantly – stay very profitable!

Miscellaneous (Furniture, computers, inventory, stock, licenses, and everything else!)

One thing you will learn when opening a facility, or even when expanding, is that there is a lot of “miscellaneous” things that come up that you may not expect. Apart from doing your due diligence and finding out as much as possible about what you need, the solution to this is adapting and making it happen. You simply just cannot be prepared for everything and honestly, opening a successful business has a lot to do with facing obstacles and finding solutions to them. In other words, suck it up!

In the beginning, I didn’t have a phone at my gym, and everything went through my cell. As soon as I realized that this was not productive (especially when my first Groupon ran!), I had all the calls go to my assistant’s phone. We didn’t buy any office computers – we used our laptops, and we used the city’s Wi-Fi, so we didn’t need to purchase any services for that.

We didn’t have any merchandise or apparel inventory from the get-go. If I had to do it again today, I would sell shirts, and display and have a small stock of the supplements we promoted, and sell waters, energy drinks, foam rollers, etc. We do that now, and it makes us an extra $1,000+ a month, and there is no big investment. Know that people who love and trust you, will buy whatever you recommend and they will buy your branded items (t-shirts, hoodies, etc.), as long as you promote items and products that will help them.

I recommend that you get all the business licenses and permits from the city. I had no idea about a lot of these things when I started my business, and when we started growing, other training businesses reported that we didn’t have “xyz” to try to get us in trouble. I always took care of it the same day and didn’t have issues, but it could have easily gone in a negative direction.

It’s disappointing that competing businesses felt the need to do that, but through experience, I can tell you that you have to expect a lot of hate as you grow. Stay focused on what YOU are doing and take care of the licenses and permits so that you don’t have to deal with it later on.

Startup costs could be anywhere from less than $10k to $50k with what I recommend, even though I am a fan of starting with what you can.

What Will It Cost To Run Your Facility (and live your life)?

Most people I talk to that are starting a gym really focused on what it will take to start the gym, which is obviously important. But what they forget to put time doing their due diligence on is what it costs to run the gym.

Before I go to the costs of running the gym, there is also something more important to ask yourself: “What does it cost for you to live your everyday life?” and “How much do you need to make from your business?”

While I started my gym, I was also working full time at a bigger health club and with that I was able to provide for my family. My goal was to become profitable as soon as possible so I could start cutting down hours at the bigger health club. That happened soon, and within 8 months I left my “job” for my business. I could have done it earlier, but I wanted to make sure I was good at being able to cover all my living costs as well as keep the business profitable.

I explain this because I see too many fitness professionals fail to realize that they have to pay themselves enough to be able to cover the costs of living, all the expenses for the gym, and work to be profitable after that as well.

Once you write out a budget for your home and personal life and what you will need there, you must move on and write out what everything will cost in your business. Everything! That said, there will be a bunch of miscellaneous costs that you may not even think about at the beginning. Still, write everything that you can think of.

I’m providing a basic fixed expenses table so that you can calculate the costs for yourself and get a better picture of what everything will come to. If you already have an existing business, filling this out is a very good idea, as it will give you a snapshot of fixed expenses. When I did this, I realized there were things I could change to cut down costs.

The sheet will only give you fixed expenses since that is most important. The variable costs, in my case, are the expenses for trainers’ semi-private training and small group personal training. I’m not worried about those expenses since if I’m paying the trainers more, it means that we are bringing in more training, and the revenue as well as profits.

The salary that is stated on the sheet is your own and that of the office manager/assistant, which if you do not have, should be the first person you hire.

Now that you have a better picture of everything you will need and what it will take to start, break even, and profit, you can reverse engineer it by making a plan to get to your goals.

REMEMBER! If you feel like you aren’t quite ready to open up a brick and mortar facility, you can still transition your training and fitness business to your home gym or garage!

Get after it!

Equipment Startup Essentials

Equipment Startup Essentials

 

 

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