COVID-19 has had a huge effect on the fitness industry. But companies have adapted quickly and cleverly through providing services online. This has been a revelation and opened up some business to new members outside their local area. Consumer behaviour has changed and the potential market for a fitness business has become wider. Even when brick and mortar facilities open up again the savvy fitness operator will keep an online offering as another revenue driver for your business.
The rules of the game have changed and now may be the best time to enter the fitness industry. New trends are emerging and some may fall behind or give up completely. This opens new space in the market for gym operators with fresh ideas to enter. In this article we will look at what a fitness business is, what will make it successful in 2021 and some hard truths that you need to know before starting.
Skip ahead to:
- What is a Fitness Business?
- What Makes a Fitness Business Successful in 2021?
- 8 Hard Truths About Starting A Fitness Business in 2021
What is a Fitness Business?
Simply defined, a fitness business refers to a facility that provides an area with gym equipment to work out and/or offers group exercise classes with a more defined focus. A fitness business can largely be split into two categories. A traditional big box gym like Planet Fitness or a group focus fitness studio like Orangetheory. For this article we will focus more on group focused boutique fitness studios. High-intensity interval training (HIIT), functional fitness, yoga, spinning or pilates, these are characteristic staples of the fitness studio. They have a bigger emphasis on creating a community and training together as opposed to personal training and individual sessions in a big box gym.
How Much Does It Cost to Start a Fitness Business?
In an article we wrote on counting the cost of opening a gym, we laid out the actual cost of starting up a fitness business from the ground up. Typically it costs between $10,000 and $50,000 to get a fitness business going. However this cost can vary depending on the type of business. When calculating this cost you will need to factor in facility costs, gym equipment, staff and insurance.
Setting up a group fitness business may be a cheaper option than a big box. Group fitness businesses like boutique studios require smaller spaces, less equipment and generally less overheads. The boutique fitness studio is more adaptable to different types of commercial space. In fact a New York Times article references the trend of boutique studios renting retail spaces in malls.
What Makes a Fitness Business Successful in 2021?
What the pandemic has shown is that fitness businesses need to be resilient, adaptable and innovative to navigate the ever changing world we live in. When it comes to health and safety, fitness studios have found difficulties with smaller spaces and more people than a traditional gym, which can spread out people over a larger space.
The flipside of this though is that a successful fitness business have found it easier to adapt their offering to outdoor workouts and online. Adapting your offering safely while still being able to drive revenue and acquire new clients is one of the key challenges for any fitness business opening at the moment. Let’s break this down into a few key areas.
Establish Clear Health and Safety Procedures
The pandemic has made clear that health and safety procedures are essential to running a gym or studios. A Fitness professional needs to develop and apply clear health and safety guidelines to ensure Covid-19 doesn’t spread in their facility. Regardless of whether measures are required legally, developing careful measures to help reduce the risk of spread will help to safeguard the safety of members and staff alike and further generate customer confidence.
To protect your staff and members consider things like temperature checks, regular testing(if available) for staff, clear social distancing markers on the floor, hand sanitising stations and visible guidelines. Make allowances for staff calling in sick and be supportive towards them so they can return to work safely. To avoid any disruption due to short staffing, it may be worth operating on an ‘on call’ basis for staff who are not scheduled to work as ‘back ups’ for each shift in case the scheduled instructor can’t make it.
Be Adaptable with Your Offering
Entrepreneurship is full of obstacles. Starting something from nothing is never an easy ride and there will be bumps on the road. A quality shared by the most successful entrepreneurs is adaptability. In 2020, Covid-19 threw up one of the biggest obstacles fitness operators have ever had to deal with and it became a real test of their resolve. And, while 83% of US gyms survived in 2020, revenues fell by an astonishing 58% from a record high for the industry in the previous year.
Fitness operators need to be adaptable with their business and their offering. With their offering there are two main areas that they need to look at. One area is pricing. At a time where mass unemployment has become the norm, some of your members may begin cutting out expenses – which could include gym membership fees. With these members be flexible and work out payments that suit them where possible. The other area is the actual workout you are providing. With limited capacity in your facility or actual closure, you will need to provide a quality online offering to your members so they can still workout.
Reassign and Retrain Staff
The changing nature of the industry means that the business model of the modern fitness business is much different than this time last year. And, within this business model, the roles of your staff members may change significantly. If you have built up a strong team who have bought into the vision and the values of your business, then the last thing you want to do is to let them go – even if it’s temporary.
The changing nature of the business means new skills are needed. In some cases you may need to hire new talent to fill these roles. However try and look internally and allow employees to upskill to fill any talent gaps you have. One great piece of advice came from a podcast interview we did with Alex Hormozi. He advised assigning staff members to do sales outreach and accountability calls. This can open up increased revenue with more sign-ups and more members sticking to their members – which increases recurring revenue each month.
8 Hard Truths About Starting A Fitness Business in 2021
Forbes recently wrote an article about how this year may be the best time to set up a fitness business. They list five compelling reasons and while there is no doubt that there are opportunities out there. However the reality is that starting and running a business is tough. In the next part of this article we are going to focus on some hard truths you need to face up to before starting a fitness business.
1. Planning is Everything
Creating a business plan is vital and there are many steps for creating a group fitness business plan. With this solid foundation there will be issues later on down the line. And while you can plan for every eventuality, you need to be prepared as possible. Think of your fitness business plan as a handbook for all your next steps. To create a business plan use the wealth of business plan templates on Google.
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The key factor when writing a business plan is to confirm that there is a demand for your business and that you will be able to generate enough income to run a profitable operation. This document also plays an important role in securing investment. If a potential investor can clearly see the profitability of your business, they are more likely to invest.
2. Be Ambitious, but Be Realistic
Ambition is nearly a given. There is no way a person puts themselves through the process of setting up a fitness business without ambition and passion. The flipside is too much ambition. If you think you’re going to be the next Orangetheory after the first year then you need to reign things in!
Strive for success but also be realistic about your growth. Chris Cooper, the owner of Two Brain Business Consulting, writes in depth about growing a business sustainably. As he laid out in a recent article, the ideal membership base number is 150 and there is a pathway you should follow to reach that number – check out his thoughts here.
3. Listen to The Experts
Chris Cooper is an excellent example of one of the many fitness business and general business experts out there. They offer actionable advice on how to run your business based on years of experience in this process – there is no limit on the amount of actionable knowledge you can learn.
Recently Men’s Health published an excellent article collecting the thought of the best in the game. Profiling the likes of Mark Cuban and previous guest of The Fitness Founders Podcast Alex Hormozi, the article gives a great overview of where the fitness industry may be heading in the future. Listening to the experts is especially key to keeping up with the latest trends. This allows you to stay ahead of the competition.
4. You Need to Be a Leader
Good leadership is necessary in any business. Some fitness business owners come into running a business from working under another owner in another business. While they may have been in a higher management position in those previous jobs, running a business is a completely different prospect.
Running a business means all responsibility lies with you. This can be tough to handle for some people and you need to go in with your eyes open. Real leadership means leading by example, making tough decisions and empowering your team to be the best they can be and, most importantly, providing them with support when they need it. Check out our great article on the 10 qualities of a successful gym owner for more information in this area.
5. Identify a Niche
It may sound pretty obvious, but the most important step will be to decide your focus, what kind of fitness business do you want to open? Once you have a clearly defined niche, the next step is to thoroughly research the industry and find your trainers and coaches. What makes a perfect coach will naturally depend on what you are offering but ensure that your coaches can meet your target customer’s needs.
Taking the time to get to know your target client will certainly pay dividends in the future, it will also help you to shape your business plan, hire your coaches, define marketing terminology, placement and more. The legal side of the spectrum is also critical and once you have selected your specific route and business you may need to look into whether you need business licenses in order to operate.
6. Member Experience Comes First
Customers value experiences that they deem to be unique and personal. The market is increasingly being driven by tailored and custom services. This will also apply to your communications. Sharing content that is appropriate to your customers interests and needs will certainly boost engagement and in turn revenue. A great way to start is to work on making your brand more personable. Show your customers who you are and find ways to relate. Show them how your brand aligns with their principles.
Don’t abandon the real-world community. Embracing digital does not mean neglecting your physical community. Regardless of people’s expectations for digital access, everyone likes to escape from their ever-connected world and to feel like they are part of a larger community. Digital services offer convenience, but the desire for genuine interactions is still there. Establish opportunities for customers to interact with each other. This can be informal drinks, group walks, outdoor workouts, anything that will foster a sense of community.
7. Digital Is Here to Stay
There has been a huge shift in people’s expectations regarding on-demand and online services. Use this to your advantage and ensure that your website, emails, and social media are well-oiled machines intended to boost engagement (and revenue!) to the max. Online memberships, the ability to book and cancel classes online should all be standard procedures. If you are new to this, pick one thing at a time to focus on, make it manageable and achievable.
As we wrote about in this article on running a hybrid business, when brick and mortar returns, you will need to have some type of digital offering in your business model. As Karan Valecha, Director and co-founder of Golds Gym India, details in this article, one of the key factors behind digital staying is the convenience for the member.
8. You Can’t Be Quiet About Your Business
When we say you can’t be quiet we mean you need a marketing strategy in place. When you create your business plan, you identify your target audience. This means that your marketing can be targeted. This will help define the message you’re sending and the way you communicate to potential members.
In the build-up to the grand opening, you should be promoting the event as well as offering discounts to future members. Your pre-event marketing should tie in with your overall marketing strategy and make full use of social media, a user-friendly website, and any other marketing collateral.
Starting a fitness business can be an intimidating prospect but also a rewarding one. It takes ambition, planning and leadership to be successful. As well as that you need to be willing to learn, make mistakes and face up to challenges. In the end, the journey will always be eventual on the road to fitness business success.