Wondering how to start a gym business plan? You’ve come to the right place. Opening a gym takes a fair amount of planning, but when you follow the right procedures, it isn’t an insurmountable task.
There are many benefits to drawing up a business plan before you dive head-first into setting up shop. A well-tailored plan lays the groundwork for a business that is run in a strategic and methodical way. When you skip over this step and jump straight into the day-to-day running of a gym, it can be easy to get lost in the minutiae.
On the other hand, having a solid business plan in place helps to focus your efforts on the way to achieving operational success. When the road ahead is plotted out clearly, it becomes that much simpler to keep the bigger picture in mind. This is vital if you want to make sound business decisions from one day to the next.
To start with, the trick lies in gathering and organizing your information in the right order, and sharing your market insights in a compelling manner.
Following the steps below will help you to draw up a gym business plan with ease:
How To Start A Gym Business Plan
Gather The Necessary Supporting Documentation
To start off with, your gym business plan financial documentation needs to be in order. Gather bank statements, service contracts, certifications, and insurance policies. Once you have all this at hand, it will be far simpler to write your business plan. If you already have investors or key employees lined up, it helps to include them in this process. After all, many hands make light work.
Draw Up Your Executive Summary
If you are still in the process of seeking investors or securing a loan, your executive summary is key. In essence, it's the equivalent of an elevator pitch that tells your readers why your business will succeed.
Failing to grab your reader's attention at this crucial point in time is something you want to avoid at all costs. In short - now is the time to put your best foot forward.
The best way to go about it is to write the rest of your gym business plan first and then circle back and write your executive summary after the fact. That way you'll have all the information to do so at your fingertips.
This section has to include insights on your target market, ideally with hard market data to back it up. It will also have to showcase your competitive advantage and shine a spotlight on the strengths of your business model.
If you are seeking investment, it also needs to include your requests in terms of funding and a profit/loss projection for the first three years.
Present Your Market Research
No gym business plan is complete without an analysis of your market research. In order to be a success, your gym needs a strong USP (unique selling point). The best way to determine what this should be is to analyze prevailing industry trends and to document what your competitors are doing.
Break it down into the following steps to keep things simple:
- Detail your specific market location (where the gym will be).
- List competitors in the area and what they offer.
- Discuss the primary and secondary consumer demographics in the area.
- Clearly show how your proposed gym offering will tap into unanswered consumer needs.
This step in drawing up a gym business plan has many benefits. It helps you to wrap your head around the needs of your target market. It shows potential investors that you understand the industry. Additionally, it will also form the basis of your marketing messaging when you're ready to open your doors.
Lay Out Your Marketing Plan
Setting up a gym is all well and good, but you also need to have a plan in place to get people through the door and sold on a contract. This is where your marketing and sales strategies will come in. Based on sales projections for at least the first three years, this section needs to answer a few very important questions.
Start with your proposed membership structure and what each type will cost the end-consumer. Based on this, you can then draw up sales forecasts and a strategy to convert new members to your gym. Leverage your USP in this process and share ideas on innovative promotional tools and marketing strategies. Another important aspect to touch on is member retention and service delivery.
Sketch The Lay of The Land
Next up, it's time to put your ideas for the gym and how it will operate down on paper. Here are a few questions you need to answer at this time:
- Is this a luxury gym? Or are you going for a no-frills look and feel? If you have any mockups of locker rooms, studios, etc., now is the time to present these. Architectural plans can be referenced, but should ideally be included as an appendix to the main document.
- Will the gym be open to all genders, or are you tailoring a female- or male-only exercise environment?
- Are you going high-tech with the latest gadgets, or old-school with manual training equipment only?
- Will you be offering merch, food, and drinks for sale?
- Do you have a site or facility lined up? If so, what are its key characteristics in terms of location, size, and accessibility?
- Do you have dedicated parking? If so, how do you plan on managing access?
Determine Your Staffing Requirements
Staff is a vital component of any gym environment. The people you employ to help you manage your exercise facility can make or break the business. As such, your business plan should include a clear organizational structure, as well as your ideal management and staff profiles.
If you already have key employees lined up, share biographies and pictures to show what the team will look like. If you'll be involved in the day-to-day running of the gym, you'll need to include your own bio as well.
You also need to include any proposed compensation packages and benefits you plan to offer your employees. Labor is one of the biggest expenses of any gym, so you need to think carefully about the salaries you plan to offer. It has to be commercially viable, but you also want to offer packages that will attract and retain top talent.
Top tip: Have you had uniform ideas mocked up? Include it in this section to give the reader an idea of what your team will look like out on the floor. Visual cues like this can help potential investors to get behind your vision.
Remember To Budget For Operational Tech Expenses
A common mistake that first-time gym owners make is failing to budget for operational tech expenses. These days, a turnstile and a receptionist are no longer sufficient to manage access to a gym. This is why it’s important to include a section on operational technology when you draw up your gym business plan.
This will include the gym management software you plan to use, visitor screening tech (all the more important in the time of COVID-19), etc. Consider your options carefully before submitting your gym business plan, and include your reasoning for the selections you’ve made.
Explain Investment Structures, Ownership & Finances
This is by far the most critical part of your gym business plan. After all, the management of the finances of your business will determine whether it will be a success in the long run. In this section, you’ll have to show potential investors what’s in it for them. In order to do so, you’ll need to explain the following:
- The structure of the enterprise. I.e. LLC, partnership, S Corp., etc.
- How much investment you need to get the gym off the ground (if applicable).
- What kind of equity investors can expect, as well as their projected return on investment.
- Ways investors will be able to exit the deal if they want or need to.
Next up will be your financial projections. This section is likely to take the most time. It will have to include:
- Income statements, balance sheets, and cash flow statements for up to three years (best case, worst case, and expected).
- Industry benchmarks and ratios.
- Expense projections, including start-up costs, payroll, loan repayments, etc.
Use these numbers to summarize your data and present profit assumptions. This process not only shows potential investors that you have considered the implications of cost vs profit, but it also gives you an opportunity to assess the viability of the enterprise for yourself.
A Final Word
A gym start-up business plan does not have to cause needless headaches. Following these guidelines when you draw up a gym business plan will keep your efforts focused throughout the process. Best of luck with setting up your gym!