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How To Start A Climbing Gym In 2023

How To Start A Climbing Gym In 2023

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How To Start A Climbing Gym In 2023

How To Start A Climbing Gym

There’s something captivating about the challenge of rock climbing – it’s a combination of thrilling adrenaline, the endless creativity and precise thinking that the sport demands, and the thrill of pushing your body to its limits. But heading out to climb a mountain isn’t always feasible, and that’s where indoor rock climbing has become popular. Climbing gyms give athletes the chance to rock climb in a more convenient, supervised setting. If you have a passion for climbing, starting a climbing gym can allow you to share that passion with others while helping them train and learn to become better, stronger climbers.

Whether you’re a seasoned climber looking to turn your passion into a business or a budding entrepreneur intrigued by the thrill of the sport, this guide will equip you with the knowledge you need to start your journey.

Business Overview

An indoor climbing gym is a facility that allows people to climb artificially constructed walls and rock formations indoors. Unlike most gyms, which offer a wide variety of exercise equipment, climbing gyms take a much more specific approach. Catering to rock climbers, these facilities use rock walls and climbing equipment to deliver athletes a full-body workout. Some of these gyms may focus entirely on rock walls, offering a variety of walls suitable for climbers of different experience levels. Other gyms take a more comprehensive approach, offering rock walls and exercise equipment that helps climbers develop their strength and refine their skills.

Climbing gyms are often more expensive than traditional gyms, but they’re also popular and deliver some benefits that justify their higher prices. These gyms offer valuable supervised instruction and training in a controlled environment, which is essential to helping climbers safely develop their skills. Climbing is also an excellent cross-training activity for athletes, so while athletes may not head to the climbing gym daily as a part of their core exercise routine, they may seek this type of gym out regularly for cross-training.

Climbing Gym Industry

The climbing gym industry has experienced significant growth in recent years, driven by the increasing popularity of indoor climbing as both a recreational activity and a competitive sport. According to industry reports, the global climbing gym market is projected to reach $600 million by the end of 2023 and is projected to grow over the next five years. This growth can be attributed to factors such as the accessibility of indoor climbing facilities, the rise of professional climbers, and the inclusion of climbing in international sporting events.

ISPO notes that indoor climbing setups are increasingly departing from the style of natural climbing opportunities. When indoor climbing began, designers tried to replicate the look and feel of outdoor climbing settings. Today, gyms are creating unique, distinctive climbing opportunities. Artificial climbing walls are installed in malls, shopping centers, and even old factories. These setups may resemble Parcours’ experiences or Ninja Warrior setups.

The indoor climbing industry is increasingly catering to new climbers and families with children, but this requires a shift in marketing and business structure. With most new climbers being friends, family, or partners of current climbers, gyms need to find ways to make these climbers feel welcome and offer easy admittance, like guest passes or day passes.

Steps To Start A Climbing Gym

Starting a climbing gym is a big but exciting job. You need more than just knowledge about climbing; you need a strong business foundation and a passion to foster a community. This guide is here to help you understand the basics and answer the questions many new small business owners have.

Step 1: Assess the Market

Before you take the leap into the business world with your climbing gym, stopping and studying the ground you’re about to step on is a good idea. This means finding out if there are enough people interested in climbing to support your business.

Opening a climbing gym requires major upfront costs for facility leasing, building walls, purchasing gear, hiring staff, and more. Starting without understanding your target market is incredibly risky. Market research helps minimize risk by gauging customer interest, competition levels, and demographic trends. This data is also useful in informing you on key decisions like location selection, amenities offered, and pricing models.

There are several cost-effective ways to research market demand:

  • Observe existing gyms: Visit climbing gyms in your area and neighboring cities. Analyze their facilities, attendance levels, and peak hours. You can also check out their websites and customer reviews to gauge what they offer and what customers say about them.
  • Customer surveys: Create a short survey to use with fitness communities, sporting goods stores, adventure clubs, and gyms in your area. Ask about interest, desired amenities, and pricing.
  • Local data review – Research population demographics and growth projections by using the Census Bureau and local data from economic development offices. Evaluate household income levels and participation in fitness activities. This highlights your target market size.
  • Industry associations: Trade groups like the Climbing Wall Association have data on gym locations, trends, and consumer demographics. A membership will provide access to more data.
  • Climbing forums: Post questions on regional online climbing forums to poll current climbers on need and interest. It provides qualitative data directly from your target market.

While not a guarantee, thoughtful market research helps determine if demand exists to support a new climbing gym in your area. It’s an helpful first step before investing in a facility.

Step 2: Write a Business Plan

So, you have done your research and found out that people are excited about your climbing gym idea. Awesome! Now, it’s time to get serious and write a business plan. This is a big document that helps you get ideas out of your head and on paper to refine them further, and it is really important if you need to ask a bank for money to help you get started.

Let’s take a look at the most important parts of the business plan for lenders when they evaluate a climbing gym loan:

Market Analysis: Why Your Business Will Succeed: In the market analysis section, emphasize the factors that make your climbing gym successful. Highlight market trends, demographics, and customer demand that indicate a strong potential customer base. Include data on the growth of the climbing industry, the increasing popularity of indoor climbing, and any unique differentiators that will give your business a competitive edge. Lenders will be interested in understanding why your climbing gym is positioned to be successful, which is important when considering the competition from other gyms.

Management Team: The People Behind the Business: The management team is an important aspect that lenders place great weight on when evaluating whether to fund a new business. Introduce the climbing gym owners and any key employees, and showcase their relevant experience, expertise, and passion for the industry. Highlight their track record of success, leadership skills, and ability to navigate challenges in the competitive landscape. Demonstrating a strong and capable management team assures lenders that the business has the right individuals behind it.

Location: Ideal Setting for Success: Discuss why the proposed location is ideal for your climbing gym in the location section. Highlight factors such as accessibility, proximity to target customers, foot traffic, and competition analysis. Explain how the location aligns with the needs and preferences of your target audience, making it a desirable destination for climbers. This section demonstrates to lenders that you have carefully evaluated the market dynamics and chosen a strategic location to maximize customer reach and profitability.

Financial Projections: Demonstrating Profitability: The financial projections section is where lenders will spend the most time, as they want to ensure that the business will be profitable and you will be able to pay the loan back. Provide realistic and data-driven revenue projections, expense forecasts, and a clear breakdown of startup costs. Include details on pricing strategies, membership models, and potential revenue streams. Show how you have considered various scenarios, accounted for seasonality, and implemented strategies to manage expenses and drive profitability.

Related: How to write a business plan

Step 3: Source Funding

Alright, now you have a solid plan, and it’s time to find the money to make your climbing gym come alive. Starting a climbing gym is expensive, but there are different ways you can find the money you need. Let’s walk through the options:

Personal savings: Your own savings are the first place to look. It’s money that you have and can use without needing to ask anyone else. It also shows your commitment and belief in the business.

But, starting a business can cost more than what you have saved up, so if personal savings aren’t enough to cover startup costs, seeking outside funding becomes necessary.

Bank loans: Going to a bank or credit union is often the primary way to fund a new climbing gym. These institutions typically require borrowers to invest a significant portion of their personal funds (at least 15%) toward the total project cost. A good credit score, collateral, and a solid business plan are essential when approaching lenders. In some cases, if the bank considers the loan too risky, they may utilize an SBA loan guarantee.

Local investors: Another way to find money is to talk to people in your area who have money to invest and like to help local businesses. They might be interested in your gym and want to give you money to help you start.

Friends and family: Asking people you know for help can be another way to find money. It might feel a bit weird, but if you write down the agreement and everyone agrees, it can work well. Just remember, always put everything in writing to avoid misunderstandings later.

Microloans: If you find out that the bank won’t give you a loan or won’t loan the entire amount needed, you can think about a microloan. Microloan programs, often offered by nonprofit organizations or Community Development Financial Institutions (CDFIs), provide small business loans with flexible terms. Some microloan providers also offer business training and mentorship alongside funding, which can be valuable for new entrepreneurs.

Related: Finding the money to start a business

Step 4: Register the Business

The process of registering and making an indoor rock climbing gym business legal can vary from state to state, and in this stage, we want to look at what is generally required to legally set up the business. These include:

Determining the business structure: First up is deciding how your business will be legally structured. You have four main choices:

  • Sole proprietorship: This is the simplest form and usually the least expensive to set up. It essentially means you own the business entirely. While it allows complete control, it does not offer personal liability protection should the business encounter legal troubles.
  • General partnership: This is where two or more people share the ownership, financial obligations, and operational roles of the company. It’s somewhat similar to a sole proprietorship but accommodates multiple individuals.
  • Corporation: This structure separates the owners from the business, offering protection from business liabilities, but it is more complex to set up and involves higher costs.
  • Limited Liability Company (LLC): This is a popular choice for many businesses, including gyms, because it gives you some of the protections of a corporation but is easier to set up and administer.

Deciding the right structure can depend on various factors, including how you see your business growing and your personal preference. Forming an LLC or corporation tends to be a popular option for rock climbing gyms as they can provide limited liability protection, separating personal assets from business liabilities, which can be advantageous in the climbing gym industry where inherent risk is involved.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Registering a business name: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtaining business licenses and permits: Each state has different requirements regarding licensing for a gym. Most commonly, there are specific requirements for what can be included in a membership contract. There are additional state requirements if your gym offers personal trainers to be aware of.

At the local level, some cities will require climbing gyms to obtain special permits and follow certain requirements.

Last, some general business licenses are needed, such as a local business license, sales tax number, and Employer Identification Number.

The types of licenses and permits needed can vary, so it is vital to check with local government agencies, such as the city or county clerk’s office or the state licensing department, to identify the specific requirements. This may include health permits, zoning permits, safety inspections, occupancy permits, or environmental permits.

Related: What licenses do climbing gyms need?

Step 5: Acquire & Set Up the Location

Now that you have your funds ready and your business registered, it’s time to find a home for your climbing gym. Choosing a location that aligns well with the target market you identified in your business plan is important. Before signing any contracts to acquire a property, ensure that your funding is fully secured, as sometimes there can be delays or even denial of funds. Additionally, verify that the property is zoned for a climbing gym to issues down the line.

Some gyms operate out of rented properties, while other gyms run out of properties that are purchased. Each option has its advantages. Buying or building an entire facility allows for more customization, though it’s possible to renovate existing rental properties with some patience, too.

Indoor climbing wall operators will need to be aware of OSHA Compliance for Indoor Climbing Gyms (Occupational Safety and Health Administration). In addition, the Climbing Wall Association (CWA) has guidelines and best practices for building and operating indoor climbing gyms.

The challenge in finding a climbing gym location is finding a facility with ceilings that are tall enough for the walls and boulders. Most climbing gyms will also need space for a retail shop, weight lifting gym, and locker room with showers.

You may also benefit from consulting with industry experts or experienced gym owners to ensure you have the appropriate equipment to meet safety standards and your customers’ expectations.

Step 6: Hire Staff

When starting a climbing gym and planning to hire employees, it is important to be prepared. The positions needed for a climbing gym may include climbing instructors, front desk staff, maintenance crew, and marketing personnel. Each role plays a vital part in delivering a positive experience to customers and maintaining the overall operations of the gym.

But, before hiring employees, there are several legal obligations you need to address as an employer:

  1. Obtaining an EIN: Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This unique identifier is used to report employment taxes and other business-related transactions.
  2. Employment eligibility: Ensure all hired employees are legally eligible to work in the United States. This involves completing the Form I-9 to verify their identity and authorization to work.
  3. State reporting: Each state has different reporting requirements for new hires. Familiarize yourself with your state’s regulations and ensure timely reporting of new hires to the appropriate state agencies.
  4. Worker’s compensation: Most states require employers to carry worker’s compensation insurance. This provides coverage for employees in case of work-related injuries or illnesses. Consult with an insurance provider to determine the specific requirements in your state.
  5. Labor laws: Familiarize yourself with federal and state labor laws that govern employee rights, wages, working hours, breaks, and other employment-related matters. Compliance with these laws is essential to avoid legal issues and ensure fair treatment of your employees.

Apart from these legal requirements, it’s important to budget around 15% on top of salaries to cover payroll taxes. This includes employer contributions towards Social Security, Medicare, and unemployment insurance.

Related: Hiring your first employee

Step 7: Create a Marketing Plan

With the gym close to the grand opening, it’s time to get your plan in place to let people know about the facility. Implementing and executing an effective marketing plan is crucial for the success of a climbing gym. Here are some popular ways to market a climbing gym:

  • Website: Develop a professional website that showcases your gym’s features, services, and pricing. Optimize your website with relevant keywords and meta tags to improve its visibility in search engine results. Consider creating informative blog posts about climbing techniques, safety tips, and local climbing resources to attract organic traffic.
  • Social media: Utilize social media platforms like Facebook, Instagram, and Twitter to reach your target audience. Share engaging content, such as photos and videos of climbers in action, training tips, and updates about events or promotions. Encourage followers to share their experiences at your gym and leverage word-of-mouth marketing.
  • Online business directories: Claim your business on relevant online business directories, such as Google My Business, Yelp, and TripAdvisor. This helps potential customers find your climbing gym when searching for local recreation activities or fitness centers.
  • Local partnerships and sponsorships: Forge partnerships with outdoor gear stores, adventure sports clubs, and local businesses. Offer joint promotions, organize collaborative events, or sponsor local climbing competitions. This fosters community engagement and exposes your gym to a wider audience.

Related: Low-cost ideas to market a new business

Step 8: Prepare to Open!

As you near the ribbon cutting of your climbing gym, there are a few remaining tasks to finish. We’ve covered the major ones, but every business will have different needs. Here is a list of common things to take care of:

Business insurance: Obtain appropriate business insurance coverage to protect your climbing gym from potential risks and liabilities. This may include general liability insurance, property insurance, professional liability insurance for instructors, and workers’ compensation insurance.

Related: What types of insurance does a climbing gym need?

Bookkeeping and accounting: Maintain clear and accurate financial records right from the start. Consider hiring a professional or using software like Wave Accounting (FREE) or Quickbooks for streamlined bookkeeping.

Contracts: You might need contracts for employees, waivers for gym users, and agreements for partnerships or sponsorships. Hiring a legal professional is best, but for an affordable option, RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.

Opening a bank account: Open a dedicated bank account for your climbing gym to separate personal and business finances. This will help keep your financial records organized and simplify accounting tasks.

Management software: Consider investing in management software to streamline operations, manage memberships, track attendance, schedule classes, and process payments. Some popular options for climbing gyms include Rock Gym Pro, Xplor Recreation, and CLIMBMANAGER.

Pricing structure: Determine competitive and profitable pricing for your climbing gym. Consider factors such as location, competition, target market, and the value you provide customers. Pricing can be based on memberships, day passes, classes, or other offerings.

Credit card acceptance: Set up credit card processing capabilities to offer convenient payment options to your customers. Some popular providers include Square or Stripe.

Joining industry associations: Joining industry associations can provide valuable networking opportunities, access to resources, and industry insights. Some notable climbing gym industry associations include the Climbing Wall Association (CWA), the International Federation of Sport Climbing (IFSC), and USA Climbing.

Preparing for the grand opening: Plan and execute a successful grand opening event to generate buzz, attract new customers, and showcase your climbing gym. This may involve hosting free trials, offering special promotions or discounts, inviting local influencers, and reaching out to the community through social media and local publications.

Greg’s Tip: While it’s important to cater to advanced climbers, don’t forget to appeal to families and new climbers as well. Create a welcoming and inclusive environment that offers beginner-friendly routes, classes, and activities. By diversifying your offerings, you can attract a wider audience and foster a sense of community within your climbing gym.

Greg's Business Tip

Common Questions When Starting A Climbing Gym

How much does it cost to start a climbing gym?

Here is an overview of the major costs involved in starting an indoor climbing gym:
The total upfront costs to start a climbing gym often range from $1 million to $3 million.

Here is a breakdown of some potential costs involved in starting a climbing gym:

Location: When securing a space for your climbing gym, you may need to pay lease deposits upfront or purchase the facility outright.

Business registration and licensing: Ensuring your business is legally compliant comes with its own set of costs.

Equipment and renovations: The cost of climbing walls, safety equipment, holds, mats, and other necessary gear can be substantial. Additionally, remodeling the space to accommodate bouldering walls and create a suitable environment for climbers may incur significant expenses.

Insurance: Obtaining business insurance is essential for protecting your climbing gym from potential risks and liabilities. While the exact cost will depend on factors such as coverage limits and the size of the gym, the cost of insurance can be substantial.

Marketing: Initial marketing costs may include designing a logo, creating promotional materials, setting up a website, and launching digital marketing campaigns to create awareness about your climbing gym.

Staffing: Initially, you might hire staff for training before the gym is operational, adding to the startup costs.

Finally, having a financial buffer equal to three to six months of operating expenses on hand is highly recommended. This can help you navigate the initial period after opening when you are still building your client base without the stress of tight finances.

How profitable is a climbing gym?

Determining the exact profit a climbing gym owner could make involves various factors and would generally require detailed financial analysis. However, to give you a ballpark idea, let’s use a simple formula where profit is calculated as total revenue minus total expenses.

To start with, the revenue of a climbing gym can potentially come from several streams including memberships, day passes, group bookings, and lessons. In the US, a climbing gym can reportedly charge anywhere between $15 to $20 for a day pass and $50 to $100 for a monthly membership. Assuming you have 300 monthly members paying an average of $75 per month, your monthly revenue from memberships alone would be $22,500.

While gyms dedicated entirely to climbing are successful, additional revenue can come through branching out by offering other training services. In addition to climbing opportunities, consider adding weight training or yoga to appeal to more potential members and to give gym members a broader range of options. Keep in mind that while you can add additional exercise facilities, traditional gyms can add climbing walls, which adds to the competition.

Next, let’s estimate the operational expenses, which would encompass staff salaries, utility bills, insurance, equipment maintenance, and marketing costs, among others. For a moderately sized gym, monthly operational expenses could hover around $15,000 to $20,000.

Thus, calculating using the formula Profit = Total Revenue – Total Expenses, we get ($22,500 from memberships + potential additional revenue from other streams) – ($15,000 to $20,000 in operational expenses).

Based on this estimate, and not including additional revenue streams, the gym could be looking at a profit of $2,500 to $7,500 monthly from memberships alone, before taxes. Including other revenue streams, the profit could be substantially higher.

While this is a simple example, to have an exact figure, one would need to consider the actual revenues and actual costs based on the specific circumstances of the gym.

What skills are helpful in running a climbing gym?

Sarting a climbing gym doesn’t require a business degree, but certain skills and experiences are valuable in both starting and running this type of business.

Climbing experience and knowledge: Experience as a climber and knowledge of the industry are some of the most important and beneficial skills for a climbing gym owner. A gym owner who has not only climbed but also loves the sport brings insight and enthusiasm to the business that you can’t replace.

Previous experience working in a gym: Experience working in a gym or coaching climbers gives the real-world experience of the operations and challenges of being a gym owner. If you don’t have this direct experience, consider checking out the articles and events from Climbing Business Journal and Climbing Wall Association.

Interpersonal skills: A climbing gym owner needs strong interpersonal skills, which can help to make connections with and build relationships with new clients and current gym members.

Attention to detail: Attention to detail is incredibly important in this business, especially when it comes to monitoring safety.

Creativity: Climbing gyms can face plenty of competition, but a creative gym owner who can develop unique programs, classes, and opportunities can help develop a unique business model and make that gym stand out from others.

Management experience: Experience in hiring, training, and managing employees is important for gym owners since employee management will be a standard aspect of daily gym operations.

What is the NAICS code for a climbing gym?

The NAICS code for a climbing gym is 713940, which is categorized under Fitness and Recreational Sports Centers.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Association of Fitness Studios
International Climbing and Mountaineering Federation
International Federation of Sport Climbing
International Rock Climbing Research Association
National Association for Health and Fitness
National Gym Association
USA Climbing

How To Start A Climbing Gym In 2023

How To Start A Climbing Gym In 2023

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