Are Gyms and Fitness Centres Profitable?

Starting any business requires a ton of hard work and overcoming many known (and unknown) challenges. Opening a gym is no exception. However, in order to have a higher chance of owning a profitable gym or fitness center, you will need need a recipe for success.

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Market and Product Niches

You don’t have to start a gym that caters to everyone. Choose your market niche carefully and differentiate your business from the competition as much as possible. Differentiation is key to not competing solely on price since there can only be one low price leader in any industry, and the chances of that being you is not likely.

Perhaps you have a boutique gym that caters to a smaller number of customers who have specific needs for specific types of equipment (e.g. the latest high tech fitness equipment), various classes (yoga, aerobics, step, etc.) or specialties (boxing, kick boxing, martial arts, ufc style gyms, cycling, etc.), spa and sauna services, and highly skilled personal trainers. Or, perhaps your gym is bigger in size and caters to a market that is seeking a good value and a no-frills membership. Pricing of the products and services will reflect the type of consumer that you are targeting.

Choosing the right location for your gym

Choosing the right location is critical to any business’ success, including your gym. In order to correctly choose the optimal location, you need to consider the following major criteria:

  • Targeted customers and where they live, work, and play
  • Disposable income levels of your targeted consumers
  • Leasing rates of your chosen location and whether it will allow you to be sufficiently profitable
  • Flexible lease terms that will allow you to secure extensions on your lease and/or to minimize relocation costs should the location no longer be ideal
  • Does the location support your intended operating hours, for example, a 24 hour fitness concept will be nearly impossible if located in a shopping center unless it can be accessed by consumers externally.
  • Consider geographical information systems (GIS) that contain population, income, and other important demographic data to support your location decision making process. Consider proven and effective systems such as GapMaps if you are based in Asia.

The Right People and Partners

Choosing the right staff, especially very early on in your business, will often mean business success or failure. To reduce startup risks, consider becoming a master franchisee of proven and established fitness and gym franchises, especially brands that have proven themselves to be successful in your country or region.

If you want to go at it on your own, be sure to educate and surround yourself with people in the business. Visit successful local gyms and speak to gym managers, personal trainers, gym members and pick their brain on what makes a great gym. Then, hire a highly experienced gym general manager, fitness centre managers, sales and marketing staff, and other key staff. These senior and middle managers will then be able to fill in the remaining staffing requirements.

Once you have your dream team, take good care of them. While it’s critical to managing the bottom line, pay your staff competitively and provide strong financial and non-financial incentives for maintaining profitable fitness centers. Profit centers make for happy management and staff, and allow for career growth opportunities for those star employees that show high growth potential.

Use Guerrilla Marketing

The fitness industry is competitive. You’ll have to stand out from larger brands with cheap monthly plans. Make your gym known through precise marketing. Radio and television advertising still works, but it can put a huge dent in your budget. Digital marketing is an effective solution. For your gym, it can even be inexpensive if you do it the right way. Think like a guerrilla and use effective guerrilla marketing.

Encourage your popular gym customers to be your social media influencers. Invite them to post about their progress. Offer to show before and after photos of their transformation. Make realistic tips a part of your content plan. You can also provide a discount or incentive for sharing the gym’s posts. Once you’re ready, you can invest in sponsored content on social media.

Sufficient Capital

Remember the old adage – CASH IS KING. Starting a gym isn’t cheap and ensuring its profitability will require not only entrepreneurial ingenuity but capital! A basic gym can command an investment of 10,000-50,000 US dollars, according to Entrepreneur Magazine. Larger and unique, one-of-a-kind, high tech gyms can go into six figures. In addition to the capex spend, franchisees also need to pay franchise fees, royalties, as well as commit marketing spend every month. And not to mention working capital to operate the business.

Owning one gym can be profitable and allow you to quit your current job and to become an individual unit gym owner. Owning multiple gyms and fitness centers can make it into a real business with real incomes and growth potential!

Are you ready? If so, consider up and coming franchises such as Go Fit and Fire Fitness. Gyms with proven success already in Asia and supported by an experienced management team that is based in Asia.

To acquire a fitness and gym franchise, contract [email protected] for more info.

Author: Sean T. Ngo is the CEO and Co-Founder of one of Asia’s leading franchise consultancy, VF Franchise Consulting. He is Vietnamese American and has been living in Vietnam for over 16 years. You can reach him at [email protected] or [email protected]


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