Owning a gym can be a very profitable business venture, but there are several things you need to take into account before making the decision to open your own gym. A Statista survey in November 2020 reported that 68% of gyms that had been open for more than eight years were profitable.
The Reality of Gym Ownership
Anyone who has ever thought about owning a gym has likely fantasized about the potential profits. After all, there is a large and growing market for fitness services. However, it is important to be realistic about the work involved in running a gym.
The average gym profit margin is 10-15%, with franchise gym profits on the lower end of 10%, boutique fitness studios averaging 20% to even 40% profit margins, and CrossFit gym profit margins in the 25-30% range. Gym profit margins vary depending upon the type of gym, location, and other factors.
After deducting all kinds of expenses, the net income of the gym owner comes down to $65,000 – $75,000 annually on average, which is quite good.
Gym chains have established themselves as leaders in the fitness industry by delivering quality services, state-of-the-art equipment, and expert guidance to help individuals on their fitness journeys.
Statista research revealed that 52% of the gyms and fitness clubs that were operational for less than 3 years were profitable in 2020. The 2017 IHRSA Profile of Success reported that the median margin for all clubs in the Pro-Shop/Retail category was 16.5%.
Building a successful gym is not easy, but with patience and hard work, being the proud owner of a profitable gym is certainly achievable.
In this blog post, we’ll talk about whether owning a gym is profitable and what you need to do in each area of your business to make that gym profitable.
Strategies to Increase Gym Profitability
This means that you need to make at least $46,000 in order to start making profit. Here are a number of ways in which you can increase gym profitability:
- Host bootcamps.
- Sell merchandise.
Operating a gym comes with expenses like rent, utilities, advertising, and equipment. Gym owners need to cover these expenses to maintain a profitable business.
On average, a gym generates $1,000-$2,000 per month within the first 6 months. After a year, a successful gym makes at least $20,000 monthly.
To forecast profits, find the gym’s revenue and expenses. Profits equal revenue minus expenses. Calculate revenue by multiplying the number of members by the membership fee.
Successful gym owners accommodate demand, provide quality service and facilities, and implement data-driven decisions.
The size of a gym impacts potential revenue and salaries. More members and facilities allow for higher revenue. Location also affects profitability.
Speaking with successful gym owners provides insight into profitable strategies. By identifying what makes their gyms succeed, others can achieve success too.