Anyone in the gym business? Some pointers needed

[Dick Dastardly]

Hello good people of PistonHeads.

My Personal Trainer is looking to set up his own gym. It’ll be a small scale thing on a business park, aiming for around 100 members.

It’ll be positioned somewhere between one on one PT sessions and a standard open gym. There will be a few PTs working and group classes each day, so it’s more personal than being a member of somewhere like Bannatynes or David Lloyds and aimed at people who pay for PTs but also want some group sessions to mix it up.

He’s already got enough clients who will join in to cover the first 20 places. I’ve told him I’ll help him write the business plan to launch it and find the other 80 people.

I’ve no idea about this sector so was wondering if anyone here would be kind enough to share some knowledge? Specifically:

- what marketing techniques work best for member recruitment?

- what % of turnover do gyms spend on recruitment, or what is seen as a normal cost-per-acquisition?

- member referrals seem key. I’ve seen my Bannatynes offer everything from discounted massages to the chance to win an iPad if you refer a friend. It would be good to know what works best.

- what is the average lifecycle of membership, and what are the main reasons why people leave a gym?

Thanks in advance.

[vulture1]

How much are the membership? 100x the membership price foes not seem enough to run a business pay for equipment and take a salary?

[Wacky Racer]

vulture1 said:

How much are the membership? 100x the membership price does not seem enough to run a business pay for equipment and take a salary?

This. Say membership was £40pm that's only around £1000pw ...peanuts.

I think you need to aim for at least 1000 members, and what would this gym offer that other local ones don't.

Hire of equipment is not cheap.

It's a very crowded market.

Good luck though

[singlecoil]

I expect that a lot of the people who could afford to use a gym regularly and who were keen to do so would by now have bought a lot of their own equipment and installed in in sheds or spare bedrooms.

[vindaloo79]

I attend JD gym for £20 ppm rolling, it’s very large and has plenty of everything. Was quite sparsely attended out of peak hours.

They have just acquired the xtrain super size gym from ten doors down, all their members have been carried over and all the decent equipment moved over and remain on £10 per month for 3 month then £20 rolling. Dunno what deal was for those who prepaid

It remains unclear if JD took on their lease or just bought memberships but it seems the lower rent attendees from xtrain are flooding JD all hours of the day. It seems surprising to me they managed to need to sell up.

These slightly out of town gyms are everywhere round these parts. Even pure gym is £16 pm.

It will be interesting to see which of these survive extended lockdowns with bargain prices and free classes.

[vindaloo79]

Dick Dastardly said:

Hello good people of PistonHeads.
- what marketing techniques work best for member recruitment?

Big banner outside or leaflets through letter box saying: no joining fee, £10-20 per month, free trial day(s). Giving referral of a free month per successful referral is adequate - as the quality of a place will sell itself.

Being near business premises for pre/post work or lunch visits is a good draw pre Covid.

I tend to move on when I can’t get on machines I want, they let the place run down and don’t keep up maintenance. If I couldn’t park for free or walk/cycle there and something better comes along then I’d be swayed.

Once settled in a gym I tend to stay 12-36 months unless my life/work changes.

Before Covid I joined pure gym as a second gym as it was 10.99 for pre registered members and I could cycle there during the day when wfh. I’ve left it now though as seems greedy to have two memberships.

[russy01]

The only way this is going to work on this scale is if it’s a by appointment only PT business in a tiny unit (think double garage size). I.e personalised sessions at £30 or something... and you’re still not going to make much money.

If you want to run an actual gym then you need several hundred members. We’ve did the numbers on a spare business unit we had and a decent profit could be turned after a few years, but this was assuming you had access to a significant amount of cash to start it up!

You’re asking questions about marketing etc, these parts are relatively easy and cheap.

I assume you’ve done all the numbers for property, rates, insurance, equipment purchase/leasing? It’s this stuff that’s going to make or break the idea...

[LooneyTunes]

russy01 said:

The only way this is going to work on this scale is if it’s a by appointment only PT business in a tiny unit (think double garage size). I.e personalised sessions at £30 or something... and you’re still not going to make much money.

At £30 a session I doubt he’s going to be able to afford decent equipment/facilities, which is going to put off quite a few prospective clients. Of those who are prepared to pay for PT, i suspect most want to train with good kit in pleasant surroundings.

[megaphone]

The ideal business model is to have 100's of members who don't actually use the facilities. There is an Anytime Gym near me, 24hr thing, in an old shop with big windows, I very rarely see anyone in it when I go past, I gave it a year, 4 years later it is still there.

There are many low cost gyms out there, as has been mentioned, £16-20/pm is what you get. My local gym (Better) charges £26/m and that includes all classes and the use of the pool.

The cost to hire the kit is huge, make sure you include a maintenance plan as the treadmills etc are often breaking down.

[bigandclever]

megaphone said:

The ideal business model is to have 100's of members who don't actually use the facilities. There is an Anytime Gym near me, 24hr thing, in an old shop with big windows, I very rarely see anyone in it when I go past, I gave it a year, 4 years later it is still there.

Snipped from http://elitefranchisemagazine.co.uk/franchise-inte...

For would be [Anytime Fitness] franchisees the required financial commitment is a minimum 170K to be expected. Overall project costs (per franchisee basis) run from £400K-600K; determined by location and size of property.

From a franchise profile standpoint average gym size is 5K-7K [square feet] with a typical monthly membership yield of £34 - based on average membership per club of 1059 - and average length of stay (as a member) of 18.9 months.

Edited by bigandclever on Monday 2nd November 07:50

[Si1295]

For direct marketing you need to break down why people go to the gym and why they have left other gyms. I.e include pictures of attractive people smiling/before and after photos.

Word of mouth is arguably the best and for that it has to turn in to a social club, it’s why CrossFit places do well.

[StevieBee]

My Son's a PT. Freelance contract with The Gym. I've been helping him look at setting up something with another. Early days but the following may help you.

100 people is nowhere near enough members. You have to base your plan on the lowest current membership available in your area which will be around £16 - £17 per month. 100 members would yield you no more than £22k annually.

Start up costs vary according to location and what you're aiming for. For combined start-up and year one costs covering premises, fit-out, insurances, utilities, staff, compliance, etc... you'd be looking at £180k - £200k as an absolute minimum and this doesn't include earnings for the owner.

Membership rarely covers costs. Profit comes from add-ons; courses, one-on-one training, shop, cafe, etc.

The cheapest set up are gyms that serve body builders. All they need is plenty of free-weights and a few machines. The venue can be as gnarly as you like.

Attracting the 'yummy-mummie' types can be highly profitable but requires greater investment on decor and all the ancillary stuff (nice showers, childcare, café, etc)

Location is everything. The most successful gyms are located where the majority of members can walk to and/or are within a 10 to 15 minute drive. So take a compass and draw a circle from the proposed location to a distance that meets this criteria and research the demographics of the area covered. If it's viable, it's almost certain that there will already be a gym in that area and if there isn't, you need to consider why that may be.

It is a crowded market but this isn't necessarily a bad thing. It shows that there's demand. Just because there's already a gym in an area, it doesn't mean that area can't accommodate another provided it offers something different.

Dick Dastardly said:

what marketing techniques work best for member recruitment?

Social media. PR. Website. Printed flyers and offers along the lines of three months free.

Dick Dastardly said:

what % of turnover do gyms spend on recruitment, or what is seen as a normal cost-per-acquisition?

Varies enormously. Established gyms spend a surprisingly small amount but that's because they have presence and reputation already. Plus the chain gyms benefit from central marketing and thus economies of scale. So The Gym for example could throw £120k at a national TV advertising campaign but on a per-location basis, the cost is probably less than each gym would spend on a local leafleting campaign.

Dick Dastardly said:

member referrals seem key. I’ve seen my Bannatynes offer everything from discounted massages to the chance to win an iPad if you refer a friend. It would be good to know what works best.

If the gym is good enough, you won't need to incentivise membership. However, one of the most effective incentives is to encourage pairs to join - couples or mates. Lack of a gym buddy is one of the main reasons people leave a gym.

Dick Dastardly said:

what is the average lifecycle of membership, and what are the main reasons why people leave a gym?

50% of members quit a gym within 6 months of joining.

Most gyms will loose between 20% and 30% of members each year.

Main reasons are; as mentioned; lack of a gym buddy as well as insufficient time to use it, not using it enough, unable to afford it, unable to justify the cost, overcrowding (waiting too long to use equipment) or quality of staff.


HTH

[Dick Dastardly]

Thanks everyone. Lots to go through here.

Regarding the number of members and fees, it's going to be a lot more exclusive than your typical big gym. His target audience is people already paying for a PT to come to their home or help them in their gym. He's got a number of clients who use him 2-3 times a week. At £40 a go that's £320-480 per month. You can make it work with 100 members if they are the kind of people who spend that much on their fitness.

[StevieBee]

Dick Dastardly said:

Thanks everyone. Lots to go through here.

Regarding the number of members and fees, it's going to be a lot more exclusive than your typical big gym. His target audience is people already paying for a PT to come to their home or help them in their gym. He's got a number of clients who use him 2-3 times a week. At £40 a go that's £320-480 per month. You can make it work with 100 members if they are the kind of people who spend that much on their fitness.

If he's able to command that level of fee, I would tell him to concentrate his efforts on building his client base. 10 clients on this basis would give him an income of just under £60k a year without all the hassle and risk associated with a physical gym business.

At the moment, his £40 per session is almost 100% gross profit. Translate that to a gym and you'd struggle to see a GP of 10%.

Not saying don't look at it but he needs to think about why he wants to do it.

[LooneyTunes]

StevieBee said:

If he's able to command that level of fee, I would tell him to concentrate his efforts on building his client base. 10 clients on this basis would give him an income of just under £60k a year without all the hassle and risk associated with a physical gym business.

At the moment, his £40 per session is almost 100% gross profit. Translate that to a gym and you'd struggle to see a GP of 10%.

Not saying don't look at it but he needs to think about why he wants to do it.

I agree. If he’s doing home PT, he probably also needs to consider whether clients at that level will want to sacrifice the convenience of doing it at home to go elsewhere. Doubt I’m alone in going from a gym, that is now in the wrong place with increased working from home, to building a good home gym. Would happily spend on a visiting PT but wouldn’t want to go back to a traditional gym unless the facilities were better than at home.

[ben_h100]

As a gym member I’d avoid going down the high membership, low monthly cost model, i.e. stack em high sell em cheap. This can work in the short term, but people who really want to train and make progress will become fed up of going to a packed gym where they can’t get on any of the equipment.

I’m a member of a CrossFit gym and pay c.£60 a month for unlimited classes and unlimited access. To an ‘outsider’ it’s a very basic gym, i.e. industrial estate warehouse with rubber floor, some kettlebells, wall balls, rigs and barbells/weights. The ‘gym’ side of it (which I think I’ve used twice in nearly a year) has one treadmill, a couple of rowers and ski erg along with some more rigs and barbells/free weights. Classes are where it’s at for me.

The owner has done very well to build up the social side of the gym membership, through employing very professional, likeable coaches (on a self employed basis), establishing a social media presence which acts as a chat/banter room, releasing clothing (free advertising) and keeping class sizes to a reasonable level (max 20). There’s the PT element which can be exploited also. The CrossFit niche works well as the coaches know what they are doing and scale the workouts so that everybody can make progress, whatever their age/sex/fitness level.

In short, find a niche, don’t go ‘too big’ and build the social side would be my way of looking at it.

[megaphone]

ben_h100 said:

As a gym member I’d avoid going down the high membership, low monthly cost model, i.e. stack em high sell em cheap. This can work in the short term, but people who really want to train and make progress will become fed up of going to a packed gym where they can’t get on any of the equipment.

I’m a member of a CrossFit gym and pay c.£60 a month for unlimited classes and unlimited access. To an ‘outsider’ it’s a very basic gym, i.e. industrial estate warehouse with rubber floor, some kettlebells, wall balls, rigs and barbells/weights. The ‘gym’ side of it (which I think I’ve used twice in nearly a year) has one treadmill, a couple of rowers and ski erg along with some more rigs and barbells/free weights. Classes are where it’s at for me.

The owner has done very well to build up the social side of the gym membership, through employing very professional, likeable coaches (on a self employed basis), establishing a social media presence which acts as a chat/banter room, releasing clothing (free advertising) and keeping class sizes to a reasonable level (max 20). There’s the PT element which can be exploited also. The CrossFit niche works well as the coaches know what they are doing and scale the workouts so that everybody can make progress, whatever their age/sex/fitness level.

In short, find a niche, don’t go ‘too big’ and build the social side would be my way of looking at it.

I agree, good classes with good trainers. Build up the social side. Up until a few years ago I used a gym that had all this, xmas members parties and away days, all organised by the gym. I even met a few girls! Unfortunately the main trainer moved away and the replacements where cheap and not very good, it all fell apart when the gym was taken over. I just cycle a lot now.

[StevieBee]

megaphone said:

ben_h100 said:

As a gym member I’d avoid going down the high membership, low monthly cost model, i.e. stack em high sell em cheap. This can work in the short term, but people who really want to train and make progress will become fed up of going to a packed gym where they can’t get on any of the equipment.

I’m a member of a CrossFit gym and pay c.£60 a month for unlimited classes and unlimited access. To an ‘outsider’ it’s a very basic gym, i.e. industrial estate warehouse with rubber floor, some kettlebells, wall balls, rigs and barbells/weights. The ‘gym’ side of it (which I think I’ve used twice in nearly a year) has one treadmill, a couple of rowers and ski erg along with some more rigs and barbells/free weights. Classes are where it’s at for me.

The owner has done very well to build up the social side of the gym membership, through employing very professional, likeable coaches (on a self employed basis), establishing a social media presence which acts as a chat/banter room, releasing clothing (free advertising) and keeping class sizes to a reasonable level (max 20). There’s the PT element which can be exploited also. The CrossFit niche works well as the coaches know what they are doing and scale the workouts so that everybody can make progress, whatever their age/sex/fitness level.

In short, find a niche, don’t go ‘too big’ and build the social side would be my way of looking at it.

I agree, good classes with good trainers. Build up the social side. Up until a few years ago I used a gym that had all this, xmas members parties and away days, all organised by the gym. I even met a few girls! Unfortunately the main trainer moved away and the replacements where cheap and not very good, it all fell apart when the gym was taken over. I just cycle a lot now.

From a user experience such an approach can be preferable (it is to me!) but as a business model carries greater risk, partly for the reason megaphone states - that member retention is reliant upon the presence of certain trainers.

If you do go this route then you need to find really good PTs and offer them something that will make they stick around. That won't be cheap.

The model adopted by the low-price gyms is that the Trainers are all technically employed but they have the opportunity to sell themselves as a private PT to members using the gym's facilities - an opportunity for which they are required to pay a 'rent' which is their monthly salary minus £1.00. This suits the gym as they get a team of qualified staff to run the place and it suits the PT as they can get to build a business of their own. Risk is minimal on both sides.

The downside is that both parties want as many people as possible coming through the gym.

But Ben's right - the key is to find a niche; something that isn't readily available in the catchment area or underserved.

One other thing I meant to mention previously... whilst it's possible to earn a half-decent living owning and running a gym, the amount that is earned will always reach a ceiling. You'll be limited on the amount of customers you can have in the place at any one time. Many gyms open 24 hours but there's only 24 hours in a day so that's limiting too. So even if everything pans out, you'll get to a level and that will be that - just a questioning of maintaining it.

That's fine for some and no shame in earning a decent living but if the sights are slightly bigger then you need to flog the protein, clothes, and the really big money comes when you start to expand to other regions.

[Thankyou4calling]

Dick Dastardly said:

Hello good people of PistonHeads.

My Personal Trainer is looking to set up his own gym. It’ll be a small scale thing on a business park, aiming for around 100 members.

It’ll be positioned somewhere between one on one PT sessions and a standard open gym. There will be a few PTs working and group classes each day, so it’s more personal than being a member of somewhere like Bannatynes or David Lloyds and aimed at people who pay for PTs but also want some group sessions to mix it up.

He’s already got enough clients who will join in to cover the first 20 places. I’ve told him I’ll help him write the business plan to launch it and find the other 80 people.

I’ve no idea about this sector so was wondering if anyone here would be kind enough to share some knowledge? Specifically:

- what marketing techniques work best for member recruitment?

- what % of turnover do gyms spend on recruitment, or what is seen as a normal cost-per-acquisition?

- member referrals seem key. I’ve seen my Bannatynes offer everything from discounted massages to the chance to win an iPad if you refer a friend. It would be good to know what works best.

- what is the average lifecycle of membership, and what are the main reasons why people leave a gym?

Thanks in advance.

I’ve a huge amount of experience in this field and have helped three PHers set up commercial gyms.

I’ll PM you

[Dick Dastardly]

That’s very much appreciated. Thanks very much.