Do you want to know how much money gym owners make yearly? If YES, here are 7 factors that determine the income & profit margin for gym & fitness centers. In order to have an idea of the amount a gym owner is expected to make daily, weekly, monthly or yearly, you should clearly define the services that gym offers. A well-equipped gym is expected to offer all these services to customers that subscribe to full gym membership;

  • Personal Training
  • Group Fitness Classes
  • Yoga Classes
  • Pilates (full body walkout)
  • Spinning Classes
  • Weight Management
  • Kinesis Station
  • Comprehensive fitness assessment
  • Sport merchandize (Fitness wristwear equipped with sensors, Activity trackers that measure and analyze the physical activity and body functions, Smart Clothes or Eyewear that measure body functions, Fitness and nutrition apps for detecting /tracking/ analyzing and sharing vitality and fitness achievements, Desktop versions of fitness applications that additionally provide an app and sports wear and accessories)

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 make this possible. The increase in the number of people that enroll in a gym, means an increase in the revenue generated by the gym.

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 get when they enroll in a gym.

A gym that offers the services listed above is expected to make an average of $231,000 and above annually in the United States, with an average revenue of $63 per Sq. Ft. The data is from the AFS 2016 Marketing Best Practices Research Report. That report contains much more detailed data by gym size, etc. Please note that well-established gyms make a lot more, in the range of $90+ per Sq. Ft.

It is important to point that there is no one mold-fits-all when it comes to how much a gym owner is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average gym owner makes yearly and these factors are;

7 Factors That Determine How Much Money Gym Owners Make

1. The Size of the Gym

One cannot conveniently state the amount a gym owner is expected to make yearly if you do not know the size of the gym and the number of members the gym can accommodate per session. A gym that operates from a garage is expected to make far less than a gym that operates from a standard facility.

If your gym is a large enough, it can accommodate more members and that will mean increased membership revenue – If membership at your gym is $1,200 per year, you only need 100 members to turn over $120,000 in annual revenue. Please note that you can build your gym to double that number of memberships within 24 months.

2. The Location the Gym

The location of a gym is a major factor that will determine the amount the gym owner is expected to earn monthly. If a gym is located in a highbrow area, an area with the right demography especially as it relates to people who are obsessed with fitness, an area that is populated with sportsmen and women and of course people who have the financial means (purchasing power), then the owner of the gym is expected to make more money.

The truth is that you will struggle to make good money from your gym if you locate the business in an area filled with low income earners or in a ghetto or a place where the residents are pretty busy.

3. The Type of Services that are Available in the Gym

Another important factor that will determine how much a gym owner is expected to make yearly is the type of services offered by the gym.

You will agree that the money a gym that offers personal training, group fitness classes, yoga classes, Pilates (full body walkout), spinning classes, weight management, and comprehensive fitness assessment and also other complimentary services that include operating a spa, juice and smoothie bars, will be far larger than what a gym that offers only personal training and group fitness classes will make.

4. The Management Style of the Gym

Another key factor that will determine the amount a gym owner is expected to make yearly is the management style of the gym owner. Trust me, the results you will get when you are a good manager will be far different from what a gym owner with poor management style will make.

The idea is that a good gym owner will not just retain their old customers (members), they will also keep getting new customers especially through recommendations and that no doubt will greatly influence the amount the gym owner will make annually.

5. The Business Approach of the Gym

There are different business approaches that a gym owner can choose from and no doubt it will greatly influence the amount they are expected to make monthly and yearly. We know that a gym owner may decide that they want to operate only one gym and do their marketing alone, and also a gym owner may decide to go into franchising and also partner with other businesses that will recommend clients to them.

It is easier to find gyms that operate franchises and also offer robust services partner with sports clubs and weight loss clinics et al make more money. In essence, a well-organized gym that works with others will surely make more money than a gym that only operates from one location.

6. The Advertising and Marketing Strategies Adopted by the Gym

Another key factor that will determine the amount a gym owner can make yearly is the advertising and marketing strategies adopted by the gym. Trust me, there are several advertising and marketing strategies that can help a business scale-up their earnings, though you may be expected to spend more.

But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a gym owner that is engaging in aggressive advertising and marketing to make same amount yearly with an owner that is passive with his advertising.

7. The Number of Years the Gym is in Existence

Another key factor that will determine the amount a gym owner is expected to make on a yearly basis is the number of years the gym is in existence. In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is well – managed.

For example, in your first fiscal year (FY1) you might make a hundred thousand dollars (100,000), in your second fiscal year (FY2) you might make one hundred and fifty thousand dollars ($150,000) and in your third fiscal year (FY3) you might make two hundred and fifty thousand dollars ($250,000).

In conclusion, the amount a gym owner will make yearly is strictly dependent on all of the factors listed above. Please note that if you are operating a traditional gym and you invested massively on equipment, and it becomes obsolete very quickly you might make less money from the gym. In other to maximize profits, you should try as much as possible to keep the capital investment at a minimum.

What is the Average Profit Margin for a Gym

When we talk about the profit margin a gym owner is expected to make, we must establish the amount a gym charges per member and the amount spent on expenditure, their operational cost and the number of overheads that the gym operator has to carter to.

The average gym membership costs between $40 and $50 a month, but when you add the initiation fee, you are looking at as much as $800 or $1,000 per year. Have it in mind that some people that enroll in gyms do not show up as expected. As a matter of fact, a survey of 5,313 American gym members found that 63 percent of memberships go completely unused.

The granular stats are even more dismal: 82 percent of gym members go to the gym less than 1 time per week. In essence, the profit margin that a gym operator is expected to make will range from 30 percent and above, all things being equal.