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Government statistics indicated strong business growth opportunities for starting your own Gym Business. The U.S. Department of Labor expects industry growth faster than average when compared to other occupations. U.S. Census Bureau statistics indicate that the 21,283 fitness businesses throughout the U.S. net more than $10.2 billion annually according to a 1997 record. To increase your gym’s chances for success make sure to plan and properly finance your business idea.Getting the startup capital for a new gym or health club can be a challenge compared to other small businesses. Gyms require exercise equipment, shower facilities and, depending on your business model, spas and a swimming pool. As with any small business, new entrepreneurs should invest as much of their own capital as possible to remain independent. Given the capital requirements for gyms it is more likely a small business loan or outside investor will be needed. Start by crafting a complete business plan to show potential investors and lenders.
Step 1
Obtain a fitness professional certification. Creditability is important when opening a gym. Loan officers and customers will regard your level of industry experience as a reflection of your competence and abilities. The American Council on Exercise and the International Health, Racquet and Sportsclub Association offer certification and business education courses that will help establish your professional credibility.
Step 2
Review and select the gym business services. Gyms offer a number of services to their clients from rehabilitation to weight loss. Determining your customer base factors into the type of services and classes your gym will offer. For example, a gym catering to older adults may want to offer rehabilitation services and gentler disciplines of exercise such as yoga, pilates and low-impact aerobics. A women-only gym may wish to offer weight loss services, intense cardiac workouts and body firming weight-training classes.Step 3
Find a gym location that will support the services your gym will offer. Seek out demographic areas that will support your gym's services. Location is essential in establishing clients so factor in higher rental rates when estimating startup costs to afford locations closest to your customer base. When seeking out a location consider such things as street access, parking and visibility.
Step 4
Select fitness equipment after selecting your gym’s services and determining the required fitness equipment needed. Certain factors, such as cost, new technologies and equipment maintenance, plays a role when selecting fitness equipment, including weight machines, treadmills, free weights, weight benches and mats. Consider leasing and purchasing options when estimating the cost of fitness equipment.
Step 5
Write a business plan and get gym financing. Starting a gym will require both a written business plan and a loan. According to Entrepreneur, the average cost of opening a gym is $10,000 to $50,000. Lenders will not consider a business loan application without a complete business plan attached. The U.S. Small Business Administration offer free service to help develop business plans and provide assistance in getting loans. You can contact the SBA at 800-827-5722.
Step 6
Apply for business permits and licenses. Opening a business requires owners to register and adhere to all regulatory laws. You will have to research and apply for business licenses and comply with other regulatory laws such as building permits and health department requirements. The California Law requiring automated external defibrillators, staff trained in CPR and the AED on site at all times, and a written emergency plan developed by physician is an example of some of the requirements gym owners face.
Step 7
Purchase business insurance. Gyms are places where injuries and accidents happen. Purchasing some form of business insurance will protect the business. Contact your homeowner's insurance agent for a referral to an agent who specializes in business insurance.
Step 8
Decorate the gym facility, install the fitness equipment, hire your staff and begin your advertising campaign. To reduce the burden of employment regulatory costs such as payroll taxes and benefits when starting consider hiring on an independent contractor basis.
Step 9
Write a comprehensive business plan that starts with your vision for your new gym enterprise and describes your expertise and experience in the industry. Include a description of the combined experience of your management team, key employees and any business partners. This sets the stage for investors and potential lenders about your industry competence and prospects for growing a successful gym.
Step 10
Calculate all startup costs and project operating costs, capital expenditures and revenue from various sources for up to three years. Lenders and investors will need to see projections based on solid industry research that correlates directly with your business model. The numbers should be consistent with how you plan to operate the business. Resources such as local small business development centers, economic development corporations and chambers of commerce can provide relevant demographic and competitor information.
Step 11
Compile financial information from all business owners and investors for loan applications. Lenders will request documentation of personal assets, and any assets being allocated to your gym enterprise by these individuals. These assets will include bank or investment statements, real estate, life insurance, retirement accounts, automobiles and any other personal assets. Loan applications also require a three-year history of business and personal tax returns for all business partners. If any current or previous loan applications have been submitted, these will also need to be included.
Step 12
Seek out a business partner. In this case the entrepreneur should be ready to concede at least a portion of business management control. When seeking a partner it is best to find one with complementary skills, attitude and business acumen as well as the ability to finance your business. Craft a partnership agreement, limited liability partnership, or possibly a limited liability company depending on your business needs. Obtain partner agreement regarding the business structure, management responsibilities and financial obligations before opening your doors. Entrepreneurs should also be prepared to reimburse business partners and investors regardless of business success or failure. This can be key if the entrepreneur wishes to pursue future business opportunities. Reimbursement can be negotiated based on the partnership agreement formed. If a business should fail, negotiate an agreement to repay principal over time if lump sum payment is not an option.
Step 13
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Seek sponsorship from local businesses. Businesses can solicit local businesses to sponsor advertising within their business to help offset operating costs or receive additional income. These arrangements can be solicited before opening to show investors and lenders another source of revenue. Examples of this ancillary revenue include placement advertising on gym brochures and fliers, or logo placement near gym equipment. Approach businesses that offer complementary services to your gym such as health food stores, nutritional supplement companies or sports physician practices.Related Reading:
References (11)
Resources (7)
About the Author 1.
Anastasia Zoldak is an experienced freelance writer and researcher based in Chicago. She has been a professional writer since 2007. Zoldak has an undergraduate degree in business, which she has used in a variety of industries, including retail, sales and recruiting. Prior to becoming a writer, she ran a successful business.
About the Author 2.
Tim Burris has over seven years experience writing and editing formal sales proposals and marketing materials. Tim has also worked as a freelance journalist for two news organizations. His cover story in "NUVO Newsweekly," Financial Disclosure, May 5, 2004, won an award from the Indiana Society of Professional Journalists. Tim has a Bachelor of Science degree in business, finance from Indiana University.
Tip
- Have an attorney help you establish contracts for any loan agreements or business partnerships.
Warning
- Make investors whole regardless of the success or failure of your business.
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ReplyDeleteAmela
Gym Equipment Financing
Sometimes, owning a business or not, we still need to manage our income, especially when it comes to taxes and that’s the hardest part. Hiring a tax professional will be a good step to start when you have to deal with small business tax but it is also effective whether your purpose is to manage personal income or manage a business. Thank you for sharing your thoughts! Would love to see more updates from you.
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ReplyDeleteHello,
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