How to Start a Fitness Business

Are you a fitness junkie? If you start your own fitness business you could make money with every rep. Whether you open a fitness studio or just start working as an online personal trainer, you can help others improve their health and meet their fitness goals while making a good living. Gyms and fitness clubs are a $36 billion industry in the US, so start doing some heavy lifting and grab your share of the market. 

Before you jump in, you might want to do your entrepreneurial homework. Luckily, this step-by-step guide details the entire startup process and will put you on the road to owning your own successful fitness business.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a fitness business has pros and cons to consider before deciding if it’s right for you.

Fitness industry trends

Online fitness has exploded in recent years, thanks in part to the pandemic. The market was worth $6 billion in 2019 and is projected to grow to nearly $60 billion by 2027, expanding 10-fold in just eight years. Even brick-and-mortar gyms are now offering online work-outs.((https://www.alliedmarketresearch.com/virtual-online-fitness-market)) 

Industry size and growth

• Industry size and past growth – The US gym and fitness market is worth $36.6 billion in 2022. The industry had seen steady growth before the pandemic and has started growing again as the pandemic recedes.((https://www.ibisworld.com/industry-statistics/market-size/gym-health-fitness-clubs-united-states/))
• Growth forecast – The global health and fitness industry is projected to expand more than 7% annually through 2028.((https://www.mordorintelligence.com/industry-reports/health-and-fitness-club-market))
• Number of businesses – In 2022, 106,132 gym, health, and fitness club businesses are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/gym-health-fitness-clubs-united-states/))
• Number of people employed – In 2022, the gym, health, and fitness industry employs 823,652 people.((https://www.ibisworld.com/industry-statistics/employment/gym-health-fitness-clubs-united-states/))

Trends and challenges

Trends in the fitness industry include:

• 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.

Challenges in the fitness industry include:

• Sharp growth in the online fitness industry has led to a market saturated with online training options, creating a highly competitive environment for both online and in-person fitness businesses.
• Member retention for gyms is an ongoing challenge. The same could be true for a subscription based online fitness business.

Demand hotspots

• Most popular states – The most popular states for gyms are Minnesota, Connecticut, and Michigan.((https://www.zippia.com/advice/states-most-gyms/))
• Least popular states – The least popular states for gyms are New York, North Carolina, and Arkansas.

What kind of people work in Fitness Businesses?

• Gender – 44.2% of fitness directors are female, while 52.6% are male.((https://www.zippia.com/fitness-director-jobs/demographics/))
• Average level of education – The average fitness director has a bachelor’s degree.
• Average age – The average fitness director in the US is 37.2 years old.

How much does it cost to start a fitness business?

To start an online fitness business, you’ll spend about $5,500 for a computer, equipment, and fitness certifications. To open a physical gym, you’ll spend $40,000 or more.

It’s not required, but being personal training certified is one of the surest ways to attract clients; without it you’ll struggle to compete. You can get certified through the National Academy of Sports Medicine (NASM) in 12 weeks for around $700. 

You’ll need a handful of items to successfully launch your fitness business, including: 

• Computer with camera (online business)
• Kettlebells
• Exercise bands
• Treadmills, cycles, steppers, ellipticals (gym only)
• Training bench and free weights 

How much can you earn from a fitness business?

For an online fitness business, you could charge $20 a month for unlimited access to your pre-recorded workout videos, and add new ones each month. You could also offer $300 subscriptions for monthly sessions of live online personal training. Your profit margin should be high, around 90%.

In your first year or two, you could get 200 basic monthly subscribers and 5 personal training clients, bringing in $66,000 in annual revenue. This would mean nearly $60,000 in profit, assuming that 90% margin. As your business gains traction, sales could climb to 500 basic subscribers and 20 personal training clients. With annual revenue of more than $190,000, you’d make a tidy profit of around $170,000.

What barriers to entry are there?

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

• The costs to get started
• Competing in a saturated market

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a fitness business, 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 product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research fitness businesses in your area and online to examine their services, price points, and customer reviews, as well as what sells best. You’re looking for a market gap to fill. For instance, maybe the market is missing an online Hula Hoop class.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as yoga or Pilates.

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

What? Determine your products or services

The service options for a fitness business are endless. You could offer a subscription for live and recorded training sessions, personal training subscriptions, or on-demand personal training workouts. If you have a physical gym, you can offer memberships as well as in-person or online fitness classes and personal training. 

How much should you charge for fitness services?

For an online fitness business, you should be able to charge about $20 per month and around $300 a month for online personal training packages. If you have a gym, membership fees average $500 per year. If you have an online business, you should aim for a profit margin of about 90%. For a gym, your profit margin will be about 20%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up 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 will be fitness-conscious people, which is a very diverse group. You should spread out your marketing to TikTok, Instagram, Facebook, and LinkedIn. 

Where? Choose your business premises

You can run an online fitness business from home, but if you open a gym, you’ll need to rent a physical space. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Fitness Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

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 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “online fitness” or “fitness classes”, boosts SEO
• Name should allow for expansion, for ex: “FitNation” over “Pilates Palace”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

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 sets 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 Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
• Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
• Product and Services: Describe your offerings in detail.
• Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
• Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
• Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
• Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
• Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
• Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
• Appendix: Include any additional financial or business-related documents.

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’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to fitness businesses.

If you’re willing to move, you could really maximize your business! Keep in mind, 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 fitness business 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 Corp – 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 Corp – An S-Corporation 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 need to elect to be an S-Corp for tax status. In an S-Corp, 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.

Form Your LLC

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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 or by mail or 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.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re 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.
• 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 fitness business. You might also try crowdfunding if you have an innovative concept.

Step 8: Apply for Licenses/Permits

Starting a fitness business 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 fitness business 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 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 may want to use industry-specific software, such as PushPress, GymMaster, or PerfectGym, to manage your memberships, classes, and payments.

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 for 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 services like WordPress, Wix, or Squarespace. 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.

They are unlikely to find your website, however, 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

Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products: 

• Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area. 
• Instagram: Same benefits as Facebook but with different target audiences.
• Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Subscribe Now”. This can sharply increase purchases. 
• Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers. 

Kickstart Marketing

Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include: 

• Signage – Put up eye-catching signage at your gym and website. 
• Post a video – Post a video about your fitness classes. Use humor and maybe it will go viral!
• Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal. 
• Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
• Seek out referrals – Offer incentives to generate customer referrals to new clients. 
• Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
• Pay–per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
• Influencer marketing – Pay people with large social media followings to promote your fitness business. You can find micro-influencers with smaller followings and lower rates.

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 fitness business 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 USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your fitness business could be:

• Workout on your time with our on-demand classes
• Online personal training tailored to your fitness goals
• Zumba your way to health and fitness! 

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 fitness business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in fitness 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. 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

If you have an online fitness business, you may not need any employees. If you have a gym you will likely need workers to fill various roles. Potential positions for a fitness business include:

• Front Desk Clerk – greet customers, sign up members
• Fitness Trainers – Run 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 Fitness Business – Start Making Money!

Americans are more health-conscious than ever, and more willing to go online to get fit. Online fitness is booming, which means this is the perfect time to get in on the action. You’ve done your business homework, now it’s time to get out there and start building your fitness empire.