Gym Business Overview

A gym provides space, equipment, and services for people to exercise and improve their physical fitness. These facilities offer various workout options including cardio machines, weight training equipment, fitness classes, and personal training services.

The most common business models for gyms include:

• Traditional Full-Service Gym: Large facilities with diverse equipment, group classes, and amenities like locker rooms, showers, and saunas
• Budget Gym: No-frills facilities focusing on basic equipment with minimal additional services to maintain lower membership costs
• Boutique Fitness Studio: Smaller facilities specializing in particular workout types like yoga, cycling, or high-intensity interval training
• 24-Hour Access Gym: Facilities offering round-the-clock entry through electronic access systems with limited staffing

Related: Checklist To Start A Business

How Do Gyms Make Money?

Gyms’ main source of income is monthly or annual membership fees. Members pay recurring charges to access the facility and its equipment, ranging from $10 to over $200 per month, depending on the facility type and included services.

Additional revenue sources that gyms commonly use include:

• Personal Training: One-on-one or small group training sessions with certified fitness instructors who provide customized workout guidance and support
• Class Fees: Charges for specialized group fitness classes like yoga, spinning, or high-intensity interval training that go beyond basic membership access
• Food and Beverage Sales: Income from selling protein shakes, energy drinks, water, and healthy snacks through in-house cafes or vending machines
• Retail Products: Sales of workout clothing, exercise equipment, supplements, and other fitness-related merchandise
• Guest Passes: Income from temporary access fees paid by non-members who visit with current members or want to try the facility

Industry Statistics

Gyms and fitness centers operate under NAICS code 713940: Fitness and Recreational Sports Centers, which includes facilities with exercise equipment and physical fitness activities, such as swimming, skating, or racquet sports.

Here are some statistics for the fitness industry:

Gym Industry Size & Growth: The fitness industry generated $41.8 billion in revenue last year. Over the past five years, the industry experienced a decline with an average annual decrease of 1.9%. However, the industry is expected to grow 3% annually over the next five years as consumer interest in health and wellness continues to rise, coupled with increasing disposable income. (IBISWorld)

Number of Gyms: There are 90,699 gym and fitness center locations. The largest companies include Life Time Inc. with $1.52 billion in revenue, 24 Hour Fitness USA Inc. with $1.17 billion, and Equinox Holdings Inc. with $1.07 billion in revenue. No single company controls more than 5% of the market. (IBISWorld)

Gym Profit Margin: Gyms typically generate profit margins between 10% and 30%, with larger chains averaging higher percentages due to their scale of operations. Boutique fitness studios and specialized training facilities often see higher margins of 20-40% as they can charge premium rates for their services. Most gyms take one to three years to reach profitability, with successful operations generating annual profits between $80,000 and $180,000, though this varies based on factors like location, membership base, and operational costs. (TeamUp Sports)

Costs To Start a Gym

Starting a gym typically costs between $50,000 and $500,000. This range accounts for different facility sizes and equipment needs, from smaller workout studios to large full-service fitness centers.

There are several expenses when starting a gym, but here are some of the more expensive items:

Equipment and Machines: The largest expense when opening a gym ranges from $30,000 to $200,000. This includes cardio machines like treadmills and ellipticals, strength training equipment such as weight machines and free weights, and various accessories like mats and medicine balls.

Building and Renovations: Commercial space for a gym usually requires modifications costing between $10,000 and $100,000. This covers flooring installation, mirror installation, locker room construction, and necessary electrical and plumbing work to accommodate fitness equipment and shower facilities.

Insurance and Certifications: The insurance costs for a gym business range from $4,000 to $12,000 annually. This includes general liability insurance, professional liability coverage, and property insurance. Staff certifications and training programs add additional costs.

Security and Access Systems: Electronic entry systems, surveillance cameras, and monitoring equipment typically cost between $5,000 and $15,000. This includes software for member check-ins and 24-hour access control if offered.

These numbers represent rough estimates, and actual costs will vary based on location, size, and business model chosen.

Resources:
Athletic Business
Club Fitness
Fitness Business Association