13 Steps to Starting Your own Gym

Here are the most important things to consider when opening a gym:

1. Location — Choose a location near public transportation and plenty of parking spots for your customers. The place should also have decent soundproofing and plenty of space for the gym equipment.
2. Equipment and insurance — Invest in high-quality gym equipment and think about insurance for all the expensive gym machines. 
3. Specialized certifications — Trainers and fitness instructors who work in your gym need certifications from recognized organizations like the American Council on Exercise (ACE) or the National Academy of Sports Medicine (NASM). 
4. Type — Choose a type of gym you want to run, such as traditional, CrossFit, martial arts, or personal training studio.
5. Franchise — Here are some of the best gym franchises to choose from: Anytime Fitness, Planet Fitness, Gold’s Gym, Orangetheory Fitness, and Crunch Fitness.
6. Staff — Hire trained staff, including professionals, personal trainers, cleaners, and receptionists. 
7. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
8. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.

Step 1: Decide if the Business Is Right for You

Pros and Cons

Every business has pros and cons that you should consider with care before deciding if opening a gym is the right path for you.

Gym Industry Trends

An appealing new concept called hybrid gym membership has the potential to shape the future of the industry. Hybrid members have the option of taking advantage of the gym’s online offerings — from a personal trainer to a variety of yoga and fitness classes — or coming to the gym in person. Outdoor spaces for workouts and personal training are also trending, so gyms have been looking to use outdoor areas for classes and workouts.

The most popular fitness classes are yoga, pilates, circuit training, and high-intensity interval training. New workouts are popping up as well, such as Pound, a cardio jam session inspired by the beat of drum-playing.

Industry Size and Growth

• Industry size and past growth — Following a decade of steady growth, market analyst IBISWorld values the US fitness industry at more than $31 billion. The industry is still recovering from the pandemic-driven downturn in 2020.((https://www.ibisworld.com/industry-statistics/market-size/gym-health-fitness-clubs-united-states/))
• Growth forecast — The global health and fitness club market is predicted to grow by 12% annually through 2028.((https://www.mordorintelligence.com/industry-reports/health-and-fitness-club-market)) 
• Number of businesses — There are more than 113,000 gym, health, and fitness clubs in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/gym-health-fitness-clubs-united-states/))
• Number of people employed — The fitness industry employs almost 1,080,000 people.((https://www.ibisworld.com/industry-statistics/employment/gym-health-fitness-clubs-united-states/))

Trends and Challenges

Trends

• Hybrid gym membership, a combination of in-person and online sessions, is gaining popularity
• Increasing use of wearable technology such as fitness trackers and heart rate monitors
• Outdoor gyms and physical activities such as organized hiking 
• Growing preference for home exercise facilities

Challenges

• Building a client base and retaining members
• Rising prices of gym memberships

Consumer Spending

• Average consumer spend — US consumers typically spend $59 on gym membership, $48 on on-demand fitness services, and $136 per month on studios.((https://www.cardlytics.com/blog/which-fitness-spend-trends-build-the-strongest-new-years-resolutions/))
• Potential customer base — About 80% of Americans participated in a fitness activity once or more in 2023.((https://sfia.org/resources/sfias-topline-participation-report-shows-strong-positive-trends-across-multiple-sports-and-fitness-categories-2/)) More than 21.2% of men and 19.1% women engaged in sports and exercise every day in 2022.((https://www.statista.com/statistics/189562/daily-engagement-of-the-us-poppulation-in-sports-and-exercise/))
• Average prices — A gym membership costs between $40 and $70 per month, while a high-end gym membership could cost a few hundred.((https://www.goodrx.com/well-being/movement-exercise/average-gym-membership-cost))

What Kind of People Work in Gyms?

• Gender — About 60% of fitness trainers in the US are male, while approximately 40% are female.((https://www.zippia.com/fitness-trainer-jobs/demographics/#gender-statistics))
• Average level of education — Almost 60% of fitness trainers hold a bachelor’s degree.((https://www.zippia.com/fitness-trainer-jobs/demographics/#degree-level-types))
• Average age — The average age of a fitness trainer is 37 years old.((https://www.zippia.com/fitness-trainer-jobs/demographics/#age-statistics))

How Much Does It Cost to Start a Gym?

Startup costs for a gym range from $25,000 to more than $120,000. The low end represents a smaller space with less equipment. You could always start small and expand your gym later, to a larger space or multiple locations.

You’ll need a handful of items to successfully launch your gym, in addition to the space itself. Here’s a list to help you get started:

• Treadmills
• Cycles
• Steppers
• Ellipticals
• Training bench and free weights
• Kettlebells
• Other weight training equipment
• Functional training equipment, such as:
  • TRX bands
  • Medicine balls
  • Resistance bands
• Safety gear:
  • Floor mats
  • Sanitization stations
• Amenities:
  • Lockers
  • Showers
  • Reception desk

Startup Costs	Ballpark Range	Average
Setting up a business name and corporation	$150–$200	$175
Licenses and permits	$100–$300	$200
Insurance	$100–$300	$200
Business cards and brochures	$200–$300	$250
Website setup	$1,000–$3,000	$2,000
Location rental security deposit	$3,000–$15,000	$9,000
Fitness equipment	$20,000–$100,000	$60,000
Total	$24,550–$119,100	$71,825

How Much Can You Earn From a Gym?

The average profit margin of a gym is 20%, while the average annual cost of an annual gym membership is about $500.

In your first year or two, if you’re able to sign 500 members, you’d bring in $250,000 in annual revenue and $50,000 in profit, assuming that 20% margin. As your brand gains recognition, sales could climb to 2,000 memberships, giving you $1 million in revenue and a tidy profit of $200,000.

What Barriers to Entry Are There?

There are a few barriers to entry for a gym. Your biggest challenges will be:

• Startup costs — Costs of equipment and space are high
• Competition — It’s a very saturated market

Step 2: Hone Your Idea

Now that you know what’s involved in starting a gym, it’s a good idea to hone your concept in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect service. Conducting market research is important because it can help you better understand your customers, your competitors, and your business landscape.

Why? Check out the Competition & Identify an Opportunity

Research gyms in your area to see their membership and fitness training offerings, prices, and online customer reviews. You might find an area without a gym, or maybe the local gyms don’t have good trainers. A small boutique gym with more personal service and training might be another opportunity.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Identifying Your Gym’s Core Offerings

In addition to your workout facility, consider what else you might be able to add to increase your revenue. You could offer:

• Fitness classes of various types
• Vitamins and supplements
• Fitness apparel
• A juice or smoothie bar
• Online classes & hybrid membership

How Much Should You Charge for Gym Services?

The average cost of a gym membership is $500 per year. The typical cost of a fitness class is $35 to $50 per person per class. You should aim for a profit margin of around 20%.

Once you know your costs, you can use our profit margin calculator to determine your markup and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify Your Target Market

Your target market depends on the concept you choose and the classes you offer. If you offer high-intensity circuit training, your target market will probably tend to be younger. You’re most likely to find those customers on Instagram rather than Facebook.

Where? Choose Your Gym Location

When it comes to choosing the best gym location, there are several factors to consider. First and foremost, aim for a central location that is easily accessible via public transportation. This ensures that your gym is conveniently reachable to a larger pool of potential customers. Additionally, prioritize a commercial space that offers ample ventilation and natural light, creating a welcoming and refreshing environment for your clients.

In terms of the physical space, it’s beneficial to find a location that is spacious enough to accommodate the necessary gym equipment and classes you plan to offer. This ensures that your clients have enough room to comfortably engage in their workouts and participate in group activities. It is also important to find a space that requires minimal renovations or repairs, allowing you to start your gym operations smoothly.

Lastly, consider the lease terms of the commercial space. Look for a flexible lease agreement that can be extended as your gym business grows. This allows you the flexibility to adapt and expand your operations according to the demands of your clientele. You can find commercial space to rent in your area on Craigslist, Crexi, and Commercial Cafe.

Step 3: Brainstorm a Gym Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better
• The name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “gym” or “fitness,” boosts SEO
• Choose a name that allows for expansion, e.g., “Fusion Fitness Center” over “Yoga Bliss Studio”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Gym Business Plan

Here are the key components of a business plan:

• Executive summary — A brief encapsulation of your gym business, highlighting its unique value proposition, financial potential, and the roadmap to success.
• Business overview — An outline of your gym, including its mission, objectives, location, and the type of gym experience it will offer to clients.
• Product and services — Detailed descriptions of the gym memberships, personal training services, classes, equipment, and any additional amenities or products you’ll offer.
• Market analysis — An examination of the local fitness industry, potential gym clientele demographics, and demand for gym services in your target area.
• Competitive analysis — An assessment of other gyms and fitness offerings in your area, how your gym will differentiate itself, and strategies to gain market share.
• Sales and marketing — Your strategies for attracting and retaining gym members, including pricing, promotions, advertising, and your online presence.
• Management team — Profiles of the key team members, their roles, experience, and how their expertise will contribute to the success of the gym.
• Operations plan — The day-to-day logistics of running the gym, such as location, hours, staffing, and facilities management.
• Financial plan — Projections of your gym’s financial performance, including startup costs, revenue streams, profit margins, and break-even analysis.
• Appendix — Supplementary materials like resumes of key team members, detailed financial projections, and any legal or regulatory documentation pertinent to the gym business.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to gyms.

If you’re willing to move, you could really maximize your business! Keep in mind that it’s relatively easy to transfer your business to another state.

Choose Your Business Structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your gym will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

• Sole proprietorship — The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General partnership — Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corporation — Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corporation — This refers to the tax classification of the business but is not a business entity. An S Corp can be either a corporation or an LLC, which just needs to elect to be an S Corp for tax status. In this type of business structure, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number or EIN. You can file for your EIN online, by mail, or by fax. Visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund Your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans — This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans — The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants — A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital — Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
• Friends and Family — Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding — Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal — Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a gym. You might also try crowdfunding if you have an innovative concept.

Step 8: Apply for Gym Business Licenses and Permits

Starting a gym requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your gym as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability — The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business property — Provides coverage for your equipment and supplies.
• Equipment breakdown insurance — Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation — Provides compensation to employees injured on the job.
• Property — Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto — Protection for your company-owned vehicle.
• Professional liability — Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP) — This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential Software and Tools

Being an entrepreneur often means wearing many hats — from marketing to sales to accounting — which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

You can use industry-specific software to manage your memberships and payments, such as PushPress, GymMaster, or PerfectGym.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, FreshBooks, and Xero.
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences of filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop Your Website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech savvy, you can hire a web designer or developer to create a custom website for your business.

However, your clients are unlikely to find your website unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Facebook & Instagram Ads — Target specific demographics with tailored ads to enhance engagement and reach.
• Social Media Engagement — Regularly share content, including success stories and workout tips, on platforms like Instagram and Facebook.
• Website Optimization — Enhance your website with optimized calls to action and high-quality content to improve search rankings.
• Local SEO — Optimize your Yelp and Google Business profiles to improve local search visibility and encourage positive reviews.
• Content Marketing — Share informative articles and blogs about fitness, nutrition, and gym updates to attract and engage an audience.
• Video Marketing — Create engaging videos with potential viral appeal, using humor and relatable gym experiences.
• Email Marketing — Send personalized newsletters featuring regular updates, fitness tips, and member spotlights.
• Search Engine Marketing (SEM) — Use platforms like Google AdWords to appear in relevant search results through targeted advertising.
• Pop-Up Workouts — Set up temporary workout spaces in areas with high foot traffic to attract new members.
• Testimonials & Member Stories — Use member testimonials and transformation stories to inspire and attract new clients.
• Influencer Collaborations — Engage with influencers to promote your gym and reach a broader audience.
• Podcasts & Webinars — Build trust and share expertise through online educational content.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your gym meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

Global pizza chain Domino’s is renowned for its strong USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your gym could be:

• Personal fitness for women
• Work out when you want; we’re open 24/7
• Hybrid members have access to all our classes online

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a gym, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in a gym for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in fitness and health. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

As your business grows, you will need workers to fill various roles. Potential positions for a gym include:

• Front desk clerk — greeting customers, signing up members
• Fitness trainers — running fitness classes, personal training
• General manager — staff management, accounting
• Marketing lead — SEO strategies, social media, other marketing

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Run a Gym — Start Making Money!

Opening a gym is a great opportunity to help people live healthier lives and make a good living at the same time. The gym industry is growing fast as Americans are investing more in their overall health and fitness, so this is a great time to jump into the market. To differentiate your gym from the competition and attract more members, think of a unique concept and innovate on the latest trends.  

You’ve made the right first move by gathering all the relevant information. You should now be ready to flex your entrepreneurial muscles and open your own successful gym!

FAQs

How profitable is opening a gym?

A gym can be a very profitable business. Profit margins are a healthy 20% and you can make money from memberships, fitness classes, clothing and supplement sales, and more.

Do I need an LLC for my gym?

You can choose any type of business entity for your gym. An LLC offers many benefits, particularly personal liability protection. If your gym is ever sued for something like an injury, an LLC will protect your personal assets.

How can I open a small gym with no money?

You can’t open a gym with no money, but you might be able to get financing to start one. Your best bet is an SBA loan.

What is the gym failure rate?

The failure rate of gyms is a little over 50%. It’s a very competitive industry and gyms require convenient locations and a good marketing strategy.

What are the risks of a gym?

Opening a gym carries the risk of losing the significant capital that you must put into it. You’ll also have liability risks from people getting injured while using the facilities. You also face the risks of entering an extremely competitive industry.