How Much Does it Cost to Open a Gym?

The thriving fitness industry offers promising opportunities for fitness enthusiasts who want to turn their passion into a business. And if you are one of those skilled gym rats who love the idea of training people, you need to open your own gym.

It’s a long journey from being a trainer to a gym owner, however, most of it can be navigated through easily if you figure out the financial aspects of starting a gym.

Now, you might have a rough idea regarding the cost of starting a gym. Time to dive further deep.

This blog is meticulously crafted to help you understand the different factors influencing your gym start-up costs along with a table offering a detailed breakdown of these expenses. Not only that, you also get a startup cost worksheet that will help you calculate the actual startup expenses for your unique fitness business.

Ready to get pumped? Let’s get started.

Average costs for starting a gym

Before we dive into details, check out this gym startup cost checklist.  It will help you plan your startup budget and know how much financing you need to get started.

Using this gym startup cost checklist, you can plan your startup budget and get an idea of how much financing you will need.

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How to calculate the cost of starting a gym business

You now have a list of potential expenses and a rough estimate of your startup costs. Let’s estimate your actual startup costs using these two proven methods.

The first, traditional method involves using a startup costs worksheet to estimate the startup costs. However, the second, the Upmetrics method, is an innovative method that uses the Upmetrics financial forecasting tool.

Let’s understand both methods so that you can choose one that suits your requirements the best.

The traditional method—startup costs worksheet

The startup costs worksheet helps you calculate the amount needed to take your business off the ground. It is a comprehensive list of fixed and recurring costs to help you determine the actual startup costs.

Remember that many startup costs fall under recurring expenses, so cover those costs monthly, quarterly, or annually.

This cost worksheet helps you estimate the funding required to cover your startup costs.

Calculate your startup costs using this worksheet.

Pro-tip

Check out the financial forecasting tool for accurate financial forecasting. Once you have an accurate estimate of startup costs, you can easily identify funding requirements for your gym business.

Calculate Your Startup Costs

Raising funds for a new startup is certainly a nerve-wracking and time-consuming process, but having a comprehensive gym business plan can make things a lot easier.

Let’s move ahead and discuss the factors that affect your gym startup costs.

Factors that affect gym startup costs

A variety of factors factor in to determine the start-up costs for your fitness business. Let’s have a look at the most influential factors before you calculate your startup expenses.

1. Location

The location plays a major role in influencing components of your startup costs. Be it rent, licensing fees, remodeling expenses, or even the payroll- everything is directly associated with the location of your fitness business.

Not only are the rental expenses high in certain states and cities, but expenses also vary greatly depending on what part of the city you are located in.

For instance, the average commercial rent varies significantly in the different parts of Manhattan. According to Statista, while the average asking rate for retail space in Manhattan is $980 per sq. ft. annually,  the same for a commercial place on 5th Avenue is as high as $2,750 per sq. ft.

Usually, the location with heavy foot traffic, parking facilities, and easy accessibility holds promising opportunities for gym and fitness centers. However, carefully analyze the scenario in your local area, the cost implications, and the availability of growth opportunities while choosing the physical location of your business in the fitness industry.

2. Gym space and utility bills

The lease rental expenses are among the prominent expenses that will significantly increase or decrease your startup expenses.  Now, these expenses vary largely for different types of fitness businesses. However, let’s gather some general insight into this topic.

First, decide how much space you will require for your fitness studio.

Generally, the traditional gyms in the US are 3000-5000 sq. ft large. However, you can start a small fitness studio in an area as little as 2,000-2,500 sq. ft. Depending on the services you intend to offer, determine your spacing requirements.

Secondly, are you planning to lease or buy a commercial place? It’s a no-brainer that buying a space will cost you significantly more. However, if you plan to choose this path, expect to spend anywhere between $150,000-$800,000 and sometimes even more depending on the size and location of your gym.

However, if you choose the path of lease rental, the monthly costs would span between $3,500-$7,500. Also, while you make arrangements for your startup capital, make provision for security deposits worth 3-6 months of your rent, i.e. $21,000-$45,000.

Whether you choose to rent or buy, every month a significant portion of your earnings will go to your lease or mortgage payments. So consider your long-term plans and financial situation to make an informed choice.

Also, utility bills for your gym would be another significant expense varying anywhere between $1,500-$4,000 every month.

3. Construction and remodeling

Remodeling is expensive, however, essential expense for gym owners to put together a dreamy neighborhood gym. Budgeting for the construction expenses well in advance can help regulate your startup expenses.

Considering a general gym concept, your fitness center must have a shower area, locker room, reception, training area, waiting room, and other designated places essential for your gym. Further, also add the cost of building utilities, flooring, and painting to your remodeling expenses.

Given that you are working on a blank canvas, the costs for remodeling would span anywhere between $20,000-$115,000. Now, you can try negotiating with the landlord to help cover some or most of these expenses. While there is no surety that he would agree to share remodeling expenses, it’s worth taking your shot.

4. Gym and non-gym equipment

Equipping your gym with a variety of gym and non-gym equipment is essential before you open your fitness center for people. Gym equipment is costly and you need to make thorough considerations before making any actual decisions.

Here, you have one of the two choices:

• Buy equipment
• Lease equipment

Buying is definitely expensive, however, it’s a one-time expense that will cover you for years. The cost of equipping your standard gym with essential equipment costs you anywhere between $15,000-$50,000.

Here is a rough cost breakdown for different fitness equipment:

• Treadmill: $300-$5,000
• Free weights: $500-$2,000
• Strength training machines: $1000-$3500
• Stairmaster: $2,000-$4,000
• Rowing machine: $300-$3,000
• Functional training equipment: $500-$2,500
• Mats, resistance bands, and other accessories: $100-$1,000

Leasing, on the other hand, offers multiple advantages such as low upfront expenses, zero maintenance, and access to the latest equipment. To stand tall in the fitness industry, you want to ensure that your gym has all the latest equipment essential for attracting a premium crowd.

Considering that you choose to lease the equipment, make a provision of $2,000-$3,000 for monthly lease payments.

A wise move would be to buy accessories, bench presses, free weights, and functional training equipment. However, for cardio machinery and strength training equipment where constant upgrades are available, leasing would be an effective choice.

Apart from these, consider the cost of furnishings for tables, chairs, couches, and miscellaneous gym supplies costing somewhere between $8,000-$20,000.

5. Payroll expenses

Usually, your startup cost calculations should include payroll expenses for the first 3 months. Now, depending on the size and services of your gym, decide how many people you need to hire for particular roles.

Considering a mid-size facility, you need nearly 15-20 employees to efficiently operate your gym. This includes floor trainers, administrative staff, personal trainers, gym managers, and freelancing specialists.

Here are the current average salaries for the following roles in the US:

• Floor trainer: $45,380 annually, $21.82 hourly
• Personal trainer: $48,247-$82,151 annually, $27.89 hourly (base pay)
• Gym manager: $38,574-$60,626 annually
• Receptionist: $34,610- $43,891 annually, $17.43 hourly
• Freelancing specialists: $20-$100+ per hour

Now, map your hiring plan and calculate your payroll expenses at least for the first month in your startup cost calculations. We suggest budgeting anywhere between $5,000-$8,000 for your monthly payroll expenses.

6. Gym technologies and software

Gym owners need to invest in some top-level POS (point of sale) system that would seamlessly integrate within your system and help facilitate payment processing. The initial setup and hardware would cost you between $1,200-$2,000. Also, keep aside $100-$200 for recurring software payment expenses.

Apart from these, you also need standard gym management software to help with membership management, staff management, billing, maintenance reminders, and much more. The upfront cost for this would be $1,000-$5,000 or a subscription billing costing you $200 every month.

7. Licensing, permits, and insurance

As a first step of compliance, you need to register your business with the state by choosing the appropriate entity for it. This would cost anywhere between $150-$500.

However, apart from getting a business license, you would also need to check for local licensing and permit requirements for your personal studio gym. This includes health and safety permits, a certificate of occupancy, zoning permits, and other standard permits required for your commercial gym.

Though the requirements aren’t extensive and stringent for a gym business, the compliance cost for licensing would span between $1,000-$2,000. Instead of scratching your head to figure out the compliances, keep aside $2,000 in legal fees to avail legal services for your gym.

While you are at it, also consider acquiring a fitness instructor or related certifications from institutes like the International Sports Sciences Association (ISSA) to enhance the credibility of your gym. While this is not essential, it is definitely recommended. Besides the costs are negligible varying between $400-$1,000 for each course.

Lastly, before opening a gym you want to ensure that your business is fully insured. The insurance would protect your business against potential risks and loss by offering appropriate coverage.

Here are a few insurances you must consider getting apart from the business insurance:

• General liability insurance
• Worker’s compensation fund
• Property damage insurance
• Professional liability insurance
• Equipment breakdown insurance

The initial costs for insurance would span between $500-$2,000 followed by annual premium payments.

8. Branding, advertising, and marketing

Before opening a gym to the public, you want to ensure that the word about your existence is out creating a buzz. As a business owner, you must work extensively on branding and marketing while simultaneously working on your gym.

Well, here are a few things you need to get right to mark the successful launch of the gym:

• Put together a functional website informing the people about your gym, its world-class amenities, packages, personal trainers, and other fitness-related information. The cost of building a standard informational website spans anywhere between $500-$1,000.
• To attract people to your doorstep, you need signboards and hoardings. Considering the basic costs, keep aside $1,000 for branded signboards.
• To create a local buzz, dedicate your marketing efforts to print advertisements, radio ads, press releases, and other effective mediums costing you between $1,000-$5,000. While online marketing is effective, offline marketing will help you capture the target demographic directly.
• $100-$500 pre-launch marketing costs for online ads, social media, email marketing, and video marketing.
• Lastly, set a budget for marketing expenses you will incur every month. Generally, 5-7% of monthly sales is an ideal budget to dedicate to marketing activities.

The factors above offered just a rough approximation of different expenses in each category. While setting up an actual gym, the costs can vary outside these ranges depending on the concept you choose.

Tips for reducing gym startup costs.

Is there a way to bring down these startup costs? Well, you definitely can start the business with limited capital. Here are a few tips to regulate your startup expenses in different categories:

1. Lease the equipment

Instead of buying the gym equipment, negotiate a favorable deal for lease equipment. This will help you save nearly 50 grands on initial investment and a few thousand dollars every month on equipment maintenance.

Besides, leasing makes it easier for you to upgrade your machinery as and when needed without incurring significant expenses.

2. Start with limited services

Instead of offering extensive fitness services right from the first month, start with limited services. This will help you save a significant chunk on paying specialized freelance staff.

Moreover, you won’t need any extensive equipment if you offer limited services. This will save upfront costs on investment and lease.

3. DIY Marketing

Get creative and design your marketing materials using free designing tools, instead of spending hundreds and thousands on specialists right from the first month.

Creatively allocate your budget to essential marketing activities and save costs where possible.

4. Lease a ready facility

Building and remodeling can get pretty expensive. Instead of choosing a naked property, leasing a ready facility or at least a building with installed utilities and a shower section can bring down your remodeling expenses considerably.

Conclusion

By now you must have a pretty clear idea regarding how much it costs to start a gym. What now? Well, let’s calculate the actual costs for your unique gym using our startup cost worksheet.

Let’s turn your passion for fitness into a reality by taking the first step.

Use Upmetrics for Accurate Startup Cost Projections!

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