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S&C UnderGround >> Opening a gym?


1/20/09 10:45 PM
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1armedScissor
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Anyone on here have any experience opening thier own gym?  I'm starting to daydream about doing the same and would like to get as much information about the subject as possible.

Thanks in advance everyone.


Cheers.

1/21/09 8:39 AM
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Leigh
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i opened my own martial arts gym within the last year and its running well, but nothing with weights etc. i can give you a bit of advice on what i did but not sure how relevent it will be
1/21/09 8:54 AM
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1armedScissor
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I would appreciate your input Leigh.  I think there are probably alot of similarities involved.
1/21/09 9:22 AM
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Wiggy
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 I've mentioned a good friend of mine who recently started up his own sports-performance facility.  I'll ping him and see if he'll post on this thread.

If you've got specific questions, go ahead and list them - we kept in touch quite a bit during the process, so I might even be able to answer a few of them.

Wiggy - www.workingclassfitness.com
1/21/09 10:15 AM
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1armedScissor
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I don't even have the foggiest idea about where to start.  I guess some specifics I'd have right now would be;

- how do you determine that the market you're going to open up in can support your gym?
- should you purchase the space or lease it?
- what type of insurance do you need to have?
- do you sign people up for memberships before you open to help with the capital and if so how?
- how much capital is required to start out
- with good credit how hard is it to get financing?
- what are reasonable expectations for income?

I would like to open a gym specifically geared towards sports performance, but realize that in doing so it could severely limit the number of members I'd have.  While it's nice to have an environment where everyone shares common goals and is serious about thier training, it's really the casual people that make up the bulk of memberships and pay the bills.

1/21/09 11:50 AM
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Leigh
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well, here is how i did mine

*location was critical. i had a business partner (ex-wife) who i constantly had to reign in. she wanted some huge place cos of all the business we would get and things we could offer. i said she was crazy and we should start small. took a while but 7 locations later, i found a small unit about 5 mins from my house. this was the best decision cos we've now split and i have to run everything myself in my spare time, so a small place close to home is perfect

* my rent is low and i cover it no problems each month. i would definitely recommend renting somewhere for a few years until you know you can sustain a business

* no idea what insurance you need for a weights gym in the states. something that makes sure you're covered if someone sues you, probably. make sure you at least cover your own arse

* signing people up before you've even opened will be a struggle. i'd recommend doing some advertising (leaflet drops and local newspapers have proven successful for me) and maybe a free opening week. sign people up for memberships when they turn up

* don't think you'll need as much capital as some people may quote you if you do lots of work yourself and look for bargains on equipment. where you need money are legal fees (i didn't get a lawyer, so saved there), deposit and first few months rent. get friends to help you paint and decorate the place

* i couldn't get any financing even with good credit. had to get a personal loan, cos the business was unproven. they'd love to lend to me now, cos i make my payments comfortably every month. over here you can get credit cards that are 0% interest for the first year, which is a good option as long as you're not an idiot (i'm sure you're not if you have good credit)

* no idea on reasonable expectations of income - totally depends on your situation. i recommend marketing to women though, cos guys will come in regardless. i market my class with a family orientated spin but my adult classes are always packed and the kids classes not too big. adults who want martial arts know who i am - mums with kids are looking for karate at the local sports centre. so those are the ones i try to target cos its my weakest market

plus, if you get fit birds in, you'll get more blokes. maybe offer some women only fitness classes or something to get them through the door. pilates and that sort of crap

hope that helps
1/21/09 12:40 PM
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Ring Girl
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I work for a small gym owner who started his own business. We will be opening our second location later this year and I will be running that one. The gym owner has gone from being a personal trainer with no employees to now having an entire staff of full-time people and over 250 committed students.

As far as a few of the specifics that you asked - I would definitely rent, not own. You can get insurance through various carriers - the expense depends on what you're teaching and other factors, as well.

Depending on what you plan to teach as well, the initial financial investment could be very different. If you're teaching jiujitsu and you've got four walls and some mats, you're good. If you're teaching weight lifting and sport specific drills, that's a different story. Start small and gradually build up in equipment. Figure out what you actually need vs. what would be fun to have. Right now to build up a base clientele for the gym that we will be opening, I teach classes in a park with PVC pipe, sand bags, buckets, jump ropes, etc. Not much equipment and you can do tons with it.
1/25/09 4:07 PM
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Leigh
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nah, that's simply not accurate. i can tell you right now that with my over heads, if i had 60 members at my gym, i would be comfortable and not have to work (my gym is run as a hobby). here is the maths - my over heads are rent (£500), rates (£100), utilities (£30), business loan (£250), extras (round it all up to £1000). I charge £50 a month, so 20 students covers my costs. once my loan is paid off, it will only take 15 students

everything after that is profit. if i had another 40 students, I would have an extra £2k a month which would be my salary. i earn more as an engineer but that would suit me fine and i would have my days to myself

$375k is a shit load of cash if he can keep his overheads low, which isn't that hard, although i HUGELY doubt he'll have that many members for quite a long time
1/25/09 7:08 PM
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Ring Girl
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turducken - We have an average monthly client value of well over $125/month. I'm not going to say on here what I make a month, but but it comes out to plenty more than $24,000 per year and our annual gross is FAR more than what you estimated.

I can live quite comfortably off what I make right now, and that's as 2nd in command at this gym. When I'm running my own later this year I'll be making quite a bit more. It is ENTIRELY possible to make a very comfortable living (6 figures) running a small private gym with only a couple hundred members.
1/25/09 10:00 PM
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Ring Girl
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You can make 6 figures a year running your own small private gym. If you have a business model that you follow, train people who work with you properly, and don't try to do it all yourself, you also don't have to work ridiculous hours. There's some great books out there, seminars, etc, that will help people. Is is risky? Sure! It's not for everybody, but it's also far from impossible.
1/26/09 7:20 AM
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Leigh
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turducken - So if you increased your enrollment by 200% and paid off your loan, you would be making $24,000 per year before tax? That's scraping by, not doing well(in my opinion). Like I said before, that may be fine if the lifestyle of owning your own gym appeals to you, but don't get into it thinking that you are going to make a lot of money.


i agree, $24k would be scraping by. but i said £24k (sterling). there is quite a difference.

i wouldn't be rich by any means but my hourly rate would be crazy, cos i only do a couple of hours in the evenings

Ring Girl, his estimate was for a monthly gross, not annual. i'm shocked that he would think close to 400K a month isn't a lot

turducken, may i ask what you do for a living? i'm not asking for any ulterior motive other than to try to understand where you're coming from
1/26/09 12:08 PM
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Leigh
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Edited: 01/26/09 12:08 PM
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ah yeah ok, was a late night, lol

maybe they do well on things other than memberships? i know that i pull in about 50% of my membership is sales, although that's obviously not all profit

ok cool, good luck with med school :o) i have to say, i would rather teach class than be a lawyer or a doctor - they're hard work
1/26/09 10:53 PM
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1armedScissor
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 There's some awesome information here everyone.  Thanks.
1/27/09 8:57 AM
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Wiggy
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 I don't have any direct experience in opening up my own place, but was in constant contact w/my buddy as he opened up his own sports performance facility (catering to middle-high school athletes). 

Here are just a few random discussion points that I'd feel are worth considering (or at least mentioning):

-As was said, you have to have a good business model.  IMO, to make a small gym like that work, you have to have a target niche.  The ones that are the most successful (from what I've seen, others please feel free to add) are sports performance facilities and Crossfit (and, of course, variations/sinoffs of such).  Trying to compete with a chain gym is nuts. 

While you might not have the large possible clientele base as a chain gym, the market your targeting will now consider you #1 instead of the chain gym.

-Don't try to go too big too fast.  If your goal is to eventually be able to cater to 150 clients/members, that doesn't mean you need to start off w/a gym that has a 150 member capacity.  Start with a smaller place and work your way up.  Doing so will mean that you can use a smaller location (less rent) and need much less equipment.

-Buy equipment used.  My buddy actually found a great deal on ebay a TON of equipment that a university in Kentuck was unloading due to remodeling their weight room.  It was way more than he needed, and had to borrow a little bit to get it, but he was able to sell off a bunch of the equipment he didn't need to recoup most of his initial outlay.  Some of the equipment wasn't in perfect shape, but a few quick coats of paint (which he did himself) and some new covering for his benches, and he was ready to go.

-Don't buy everything at once.  Going back to my buddy here, there were quite a few things that he's wanted/still wants for his gym.  He hasn't had the money to buy them new.  So, like the last bullet point, he looks for them used.  Until he can find one, he does without and just designs his workouts accordingly.

For example, he wanted a GHR for his gym.  A decent one (say an EliteFTS) is going to run $500-$750.  He didn't have the money for that, so he just had his athletes do "natural" GHRs and other posterior chain movements.  He eventually found a Yukon GHR on craigslist for cheap.  It's not the quality of say an EliteFTS, and required a little bit of modification (again, simple stuff he can do himself), but will work for the middle schoolers and high schoolers he's training right now.  When he's in a better financial position, he can buy a better one.  But in all honesty, his athletes are receiving just as much benefit from the cheap Yukon GHR as they would a $750 unit.

-Build stuff yourself.  There are certain things (chin stations out of steel pipe, plyo boxes out of plywood, etc.) that you can make for next to nothing.  Don't be afraid to do that.

-Don't quit your day job right away.  If you're making a living right now at your day job, then great.  If you're patient, you can build up the equipment you need over time to get your gym started.  Then find a small, reasonably priced location to start.  Put yourself in a position that as few as 4-6 members will cover your overhead.  Sure, you're not making any salary right now, but it's all labor.  If you're a good trainer, and have researched your market correctly, then it shouldn't be that long before you get in enough members so that you're making money.  Word-of-mouth works to your advantage, and then you get to the point that eventually you can quit your day job and run your gym/facility full-time.

I don't think all this would be "easy", but far from impossible.  The key to success (IMO) is research/due dillegence and patience.  I'd bet that many of these kinds of places fail do so b/c they're treated like "get rich quick schemes" rather than a true passion.

You won't build the body of your dreams in a few months.  Don't expect to be able to build your business of your dreams that quickly, either.

Wiggy - www.workingclassfitness.com
1/27/09 11:09 AM
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Ring Girl
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Do lots of reading - business books.

For starters, read:
The E-Myth
Good to Great
Made to Stick

And read blogs like Seth Godin's.
1/27/09 11:21 AM
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Leigh
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wiggy's stuff is spot on. it seems like common sense but i have seen lots of people try to go too big too fast. i did all those things and started making a profit immediately. not a lot of profit but considering most businesses run at a loss at first, i was quite happy. as the gym bank balance increases, i'll use some of the profits to invest back in, probably about 50/50 in advertising and upgrades to the gym. i won't put any more of my "own" money in, cos to me, that's a good indicator of the gym's affordability

to summarise, get a small place and use second hand/homemade stuff. once you are PACKED look to go bigger
1/27/09 2:34 PM
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Ring Girl
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We don't spend any money on advertising - in the past we made a few attempts at fliers, paper ads, etc, and got pretty much zero from it.

What has helped us tremendously is media coverage and word of mouth. You're better off hiring a local PR firm than buying advertisements that don't work. Hold "friend and family" days to encourage word of mouth and get exposure. People who are referred by happy customer are more likely to join than random people reading the newspaper.
1/27/09 3:32 PM
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Leigh
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Edited: 01/27/09 3:36 PM
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cool, any more tips and i'm all ears :o)

i'm doing a leaflet drop in about a month. its a pretty big one, every house in my town (13,000 homes). if it doesn't work, i won't bother with papers or leaflets etc again
1/28/09 5:47 AM
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8weeksout
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After running my own gym for about five and a half years I have a few pieces of advice for you:

A) Create systems in everything that you do. Some of the reading material suggested above addresses that but I can't stress enough how much time you'll save and headache you'll avoid if you approach everything you do in a systematic and organized way.

B) Hire the right people. There are a million trainers out there who are terrible and who will waste your time and your money. Finding the right coaches/trainers to work for you is one of the most difficult and yet most important components to your success.

C) Don't try to do everything yourself. This is one of the most common mistakes trainers make but trust me you can't train all the clients and run the entire business yourself it just doesn't work. Hire a good admin person to take care of a lot of the tedious office work that is not a good use of your time, find good trainers to do the majority of the training, and spend your time creating the systems of the business and marketing it to get people in the door.

D) Learn direct response marketing and lead generation strategy and tactics. Read all of Dan Kennedy's books on marketing and sales. It's not that advertising doesn't work as Ring Girl suggested above, it's that people are trying to copy the same advertising strategies that multimillion dollar companies use to build brand image and awareness.

You are not a multimillion dollar company, you should be doing lead generation, period. Throwing out an ad with a nice logo and some good pictures of your gym is a waste of time and money. Flyers, print ads, direct mail, radio, etc. can bring in a huge amount of new leads and business or it can bring you nothing at all it's all a matter of how you do it. Fead Dan Kennedy's stuff you will figure it out.

E) Develop multiple revenue streams, don't rely on just one program or one type of service. That being said, I believe the most effective and successful models revolve around small group training programs that people sign up for on EFT. If you can create small group training sessions, 4-8 people and have people pay on monthly EFT you will be ahead of the games.

F) Build your list. You'll learn all about this from studying D

G) Get a testimonial from everyone. Nothing sells better than testimonials so make sure every single client you work with gives you one and pictures/videos are better than just text. If you can create a huge library of video/picture testimonials showing that your program does work you will have no problems being successful.

Start with those key points and you'll be far ahead of where most small business owners are I can tell you that much.
1/28/09 1:43 PM
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texarkanabjj
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8weeksout has given excellent advice.

I opened my bjj school about 3.5 years ago. We also do personal fitness training, cardio kickboxing, fitness, and kettlebell classes out of the gym.

I was able to pay for the gym from my own money without having any students. This was both a blessing and a curse. I wasn't quite as motivated as I should have been for the first 1.5 years because I wasn't concerned about the money. The problem is that it is a business and must be treated as such to remain in business.

About 1.5 years ago, I began taking things more seriously. I read and listened to everything that I could on business and marketing.

The e-myth is a good book to help understand the importance of systems. Develop a system for everything-the way the gym is opened up in the morning, what employees wear, how they talk with people, how sales are handled, how you get testimonials, how you ask for referrals, how you market. Test each item and improve as necessary.

I began really studying Kennedy's work about 18 months ago. Ultimate Sales Letters and Ultimate Marketing Plan first, followed by every thing else. It has made a tremendous difference in my business and I am still very early in the implementation of many things.

I would recommend that you do not try to compete with 24 hour fitness and the other huge gyms. Find a niche (or niches) and specialize.

As 8weeksout mentioned, I would run relatively small group classes that are cheaper than personal training, but much more than the typical gym membership. Sign people up for x amount of time and either do efts or sell prepays. I can't imagine not doing this as a gym.

One market that has traditionally been overlooked is the youth fitness market. This is a program that we are now developing. It is also very important considering the rates of childhood obesity.

Develop a direct sales/marketing campaign around each class (get testimonials as soon as you can), do NOT try to develop a brand with nonspecific marketing to the masses like the big gyms do. Follow up forever with people that have contacted you about the gym.
1/28/09 8:06 PM
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1armedScissor
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Keep em coming everyone.  This thread is turning into a fantastic resource.

btw what does EFT stand for?

1/28/09 11:48 PM
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Ring Girl
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EFT=electronic funds transfer
1/29/09 3:19 AM
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8weeksout
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Create systems in everything, develop unique training programs, promote them using direct response marketing using lead generation and autogenerated follow up, and sign people up for small group EFT and you'll be plenty successful.

There's a couple of guys who do a good job of applying Dan Kennedy's stuff specifically for fitness and gyms, look up Net Profit Explosion, Eric Ruth and Sean Greeley. Their sales tactics can get a bit overbearing at times but their materials are a good investment if you want to own a gym. They just won some award from Dan Kennedy himself so they know what they're talking about.
1/29/09 7:48 AM
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Yueborg
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mt
2/17/09 9:45 AM
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Yueborg
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ttt

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