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.
Table of Content
- Estimated Cost Breakdown to Start a Gym House / Fitness Center
- Total Cost of Small Scale Gym: $250,000 to $500,000
- Total Cost of Medium Scale Gym – $1.5Million
- Total Cost of Large Scale Gym – $5Million
- Cost of Buying a Gym Franchise – $80,000
- Staff / Manpower
- Can a Gym Be Opened on a Lean Budget from Home?
- Financing your Gym House
Estimated Cost Breakdown to Start a Gym House / Fitness Center
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, a gym that can accommodate over twenty clients per-time and a company with the intention of selling franchise and also offering complimentary services, then 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
- Anytime Fitness – 2,000 Locations, Est. 2003
- Life Time Fitness – 109 Locations, Est. 1992
- Gold’s Gym – 400 Locations, Est. 1965
Factors That Determine How Much It Cost to Open a Gym
The cost analysis as it relates to starting a standard gym in the united states of America, Canada, United Kingdom, and Australia can be said to be almost the same except for few variations. For example, the cost of setting up a full-service state of the art gym facility which has the following;
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 are same especially when bench–marked against the US Dollars.
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.
Other factors that may be slightly different in terms of costing when it comes to starting a standard gym in any of the countries listed above are cost of labor, cost of transportation and logistics, local tax, insurance policies, business incorporation fee, promotion and branding cost, rent/leasing amongst other factors.
When it comes to starting a medium scale gym, you should be prepared to either rent or lease a standard and centralized facility with good human and vehicular traffic. This is going to be one of the areas where you are expected to spend the bulk of your start–up capital.
Staff / Manpower
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
- Marketing and Sales Executive
- Exercise Physiologists and Body Builders
- Training Assistants
- Security Guard
Can a Gym Be Opened on a Lean Budget from Home?
Because of the nature in terms of sizes and cost of the machines and equipment involved in starting and operating a gym, it is obvious that it cannot be bootstrapped on a lean budget from home.
As a matter of fact, the business is open to the general public and you would not want complete strangers to continue to storm your house on a regular basis and at different times of the day simply because you want to pick membership in your gym.
On the other hand, if you want to start a personal gym in your house and you want to generate income from the gym, you can decide to only accommodate your friends and neighbors as members of your gym. With that, it is possible to bootstrap a gym on a lean budget right from your home. Please note that in order to cut cost, you would have to go for fairly used gym equipment; they are cheap and affordable.
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.
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