Common Challenges for Gyms in the First Year of Business

Eamonn Curley
06 January 20
9 min read
weights loaded on a barbell

We have written numerous articles on the process of opening a gym. From getting your business plan right to selling memberships before the door even opens, there is a lot to take care of to give you every chance of success. Getting over the first couple of hurdles is a relief and there is no better feeling than when you have your grand opening. 

However, once you open the doors for the first time, that’s when the real work begins. Starting up a business in any area can be tough and fitness is no different. Fitness is a competitive market at present and there will no doubt be a lot of competition in your local area. Building an engaged and retainable customer base will never move from the top spot on your to-do list. 

The first year of business is always difficult, especially if you are changing hats from employee to business owner. And for some, this first year can prove to be a bridge too far. In fact, according to an article by IHRSA, 81% of studios fail within the first year. There are a few reasons for this, but chief among them is a lack of knowledge or dedication to the business side of things. Often, people open up a gym with a burning passion for fitness that doesn’t transfer over to spreadsheets and management software.

If you find yourself in this boat, don’t worry, you are not alone. The good news is that there is always room to improve. In this article, we will look at some common issues gym owners face and 5 ways to improve your fitness facility and the overall experience of your members. 

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What Are the Common Problems Gym Owners Encounter?

When it comes to running a fitness business, especially in the first year, there are a number of challenges that can arise. From a lack of business experience to not identifying a suitable target market right through to not creating the best member experience possible, there are a number of common problems fitness entrepreneurs encounter the world over. 

Not Embracing the Business Side of Things 

One of the toughest mountains to climb for some fitness entrepreneurs is learning how to run a business. A lot of people start a fitness business because they are passionate about fitness. According to statistics gathered by Guidant Financial, 23% of entrepreneurs start a business to pursue their passion. However, not all of them are experts in running a business. 

Usually, fitness entrepreneurs have previously been fitness instructors or have held senior positions within a gym or studio. And, despite gaining some years of experience in the business, there was always the business owner above them who would have the final say. Transitioning from employee to employer brings a whole new wave of responsibility and decision making that can take time to get used to. For a percentage of fitness founders, they unfortunately never get used to it.   

Not Identifying the Right Market Need

In research gathered by smallbiztrends.com, it was found that the #1 reason most new businesses fail is that there is no market need. They cite a statistic from machine intelligence platform CB Insights, who found that 42% of businesses fail for this reason. Some entrepreneurs become convinced they have a product or service that people need – without actually finding out if that is the case. Even big companies like Google make this mistake. Their Google Glass product is a prime example of this. 

This can also happen in the fitness world.  There are so many new trends on the go in the industry that it’s easy to jump on the hottest new trend sweeping New York and LA. However, without proper research into the market, there is a high chance of failure. Extensive market research is key, something we will go into further later on in this article. 

Not Understanding the Member Experience

Experience management services firm Walker predicts that in 2020, customer experience will overtake price and product as the key differentiator for customers. If a business wants to retain customers in the long term they have to focus on member experience. For fitness entrepreneurs, this is a common issue that arises. Focus is placed on acquiring as many members as possible and retention strategies are sometimes an afterthought. 

Take a look at some of the most successful fitness franchises out there at the moment. Success stories like F45 and Orangetheory place a big emphasis on member experience. They uniquely understand the challenges their members want to overcome and provide them with the perfect environment to succeed. A problem a lot of new gyms and studios struggle with is promising the world in the sales process and failing to deliver when the person is a member. 

5 Essential Gym Improvement Ideas

Now that we have gone through the common problems that gym owners face in the first-year business, let’s look at some strategies to improve this. Some of these strategies can be implemented straight away, while others will take longer. In a few cases, you may need to rip up what you have done and start from scratch. 

1. Do Your Research

Finding out as much as you can about your market is an essential part of a successful business. If you are encountering issues in your first year of business, then it’s possibly time to go back to the drawing board. One way to structure your research is through a business plan. We have written extensively on this topic before as it’s such a key step in the foundation of a gym. Contributor to that article (and Glofox customer) Ibrahim Mohammed is the owner of IMStrong Bristol. His most important advice about the business plan is this; “What I believe is that once you write down what you are going to do, you know exactly how to go about it, rather than guessing along the way.” 

And if you feel that you have been guessing along the way its time to put a stop to that. As we discussed in the previous section, guessing what the market wants, rather than researching what they actually want. A business plan forces you to figure out the basics of what you need to do. This includes researching and identifying the right market for your service. 

2. Build a Community

A big part of growing a successful gym nowadays is to build a community for your members. It was often the case in big box gyms that once a member signed up, they were left to their own devices. This means its harder to retain these members once their contract is up. And that’s really the goal of building a community – to retain members. The most successful group fitness franchises of recent times have placed a big focus on making sure there is a thriving community in each of their studios. In fact, F45 uses the slogan “Team Training, Life-Changing”, showing how much the concept of community is baked into who they are.   

A lack of community could be one of the issues holding you back in your first year of business. A community can be hard to build and will definitely not happen overnight. A good place to start is regular communication. In fact, a 2017 study by IHRSA showed that 90% of members valued regular communication from their studio’s staff. To get you and your members talking on a more regular basis, set up a private Facebook or Whatsapp group. This will encourage members to talk and motivate each other. Another simple way is events. Social occasions outside the studio that have a fitness influence are a great way to get your member’s building relationships with each other. On a recent episode of our Fitness Founders Podcast, Kentucky based studio owner Katie Daniel explain some of her strategies for building community.

3: Keep Things Tidy

This idea isn’t so much about improvement but more about keeping gym maintenance at a good level. The condition of a fitness facility can determine the long term success or failure of the business, that is not an understatement. Word of mouth does spread, whether it be directly via gym members to their friends or Google reviews. 

Clean facilities with functioning equipment and the occasional update leave a lasting impression on gym members and even those who are just curious and wish to take a peek inside. Something as simple as having a popular machine, battle rope or new piece of fitness technology can help boost gym membership sales and keep the fitness center thriving both in terms of financial security and atmosphere.

4. Get the Latest Updates

Incorporate technology such as apps, automated emails, online signups and encourage corporate wellness. Technology is involved with just about every aspect of our day to day lives and each generation from the millennial and onward will be tech-savvy. By incorporating apps that encourage daily tasks, allow users to set personal goals, remind them of classes they’ve signed for and offer rewards for their deeds. 

They will provide an extra incentive for your members to keep pushing for their weight loss targets, eat healthily and if utilized to their full extent, create friendly competition between the employees of local businesses who are looking to improve the overall health of their employees and offer something fun in the process.

5. Take Notice

Maintain a record of member purchasing habits in your on-site store. A great way to maximize sales and shows members that you are paying attention to what they like would be to list their favorite products in a point of sale module and base future orders around that. 

This demonstrates that as a gym owner, you pay attention to your member’s wants and needs. People like to know that they are considered and thought of as more than just a number. A key to new members coming in and keeping old ones is showing you care about them.