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How To Start A CrossFit Gym

How To Start A CrossFit Gym

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How To Start A CrossFit Gym

How To Start A CrossFit Gym

Are you a CrossFit fanatic and spend a copious amount of time at the gym? You may have paid your bill and wondered what it would be like to be on the receiving end of all those monthly payments the gym collects. If you have a passion for CrossFit and have some knowledge about it, opening your own CrossFit gym to utilize your skills may be a great opportunity to become your own boss.

However, starting a successful CrossFit gym requires more than just a passion for fitness and knowledge of the workout methodology. You need a strategic business plan and an understanding of the fitness industry landscape. This guide provides an overview of the CrossFit gym business and steps to get started, along with answers to common questions for new gym owners.

Business Overview

CrossFit gyms provide high-intensity functional training workouts that combine weightlifting, gymnastics, and cardio exercises. The typical model is group classes led by certified CrossFit coaches. CrossFit does not franchise its model, but each gym pays an annual affiliate fee to use the brand name.

A CrossFit box has the facilities and equipment for CrossFit workouts, and members pay a monthly fee, which is generally higher than fees for traditional types of gyms. Additional revenue can come from private training, camps, apparel sales, and event entry fees. The main costs will be facility rent, equipment, insurance, and payroll.

Industry Summary

The fitness industry, including CrossFit, has seen significant growth in recent years thanks to increasing health awareness and the popularity of functional training. People are drawn to CrossFit because of its sense of community and accountability, which boosts member retention.

The fitness industry saw immense growth leading to 2020, driven by rising health awareness and discretionary income. The pandemic temporarily depressed gym revenues, but fitness centers have rebounded quickly.

However, the market has become more saturated, leading to stiffer competition. There are over 5 million Crossfitters and over 14,000 locations worldwide. You’re competing not just with other CrossFit gyms but against traditional gyms, boutique studios, and even online fitness platforms. Know your competitors, but also know what sets you apart.

Steps To Start A Crossfit Gym

Step 1: Market Research

You’re ready to dive into the world of CrossFit gym ownership. But hold that thought. Before you break ground or even sketch your dream gym, you need to understand the marketplace you’re entering. Market research helps you figure out if there’s room for you in the local fitness landscape. Here’s how you go about it.

Evaluate Existing Competition

One of the first things you should do is get a feel for the CrossFit gyms already operating in your area. Drive by these gyms at different times to gauge how busy they are. If they’re bustling, that’s a sign there’s demand. But high demand usually comes with competition, so you’ll need to offer something unique to stand out.

Identify Geographic Gaps

Pull up a map and plot the existing CrossFit gyms. Are there areas that seem to lack a gym? These could be untapped markets. But remember, just because there’s no gym doesn’t automatically mean there’s demand. It could also be a sign that others have tried and failed, so you’ll need to dig deeper.

Analyze Demographics

CrossFit often appeals to adults who are college-educated and fall into the middle to upper-income brackets. You can get this data from industry sources or government statistics from the Census Bureau. If the demographics align with this profile, it might be a promising location for your gym.

Engage with the Community

Conduct an online survey or even a focus group with people who attend CrossFit gyms. Ask about what drew them to their current gym and what they like or dislike about it. This gives you insights into what potential customers might be looking for and helps you identify opportunities to set your business apart.

Social Media and Online Reviews

What are people saying online about the existing CrossFit gyms? Are there recurring complaints or praises? Social media and review sites can offer a wealth of information on what potential customers value and what they think is missing.

Location Accessibility

You might find the perfect untapped market, but if it’s difficult to get to, people won’t come. Research the traffic patterns around potential locations. Are they easily accessible? Visibility from a main road can also be a major asset.

Economic and Population Trends

Lastly, consider the long-term view. Are there plans for local economic growth? Is the population expected to rise? These factors can influence your gym’s success in the longer term, offering more potential customers as your business matures.

Market research won’t remove all the risks or uncertainties. There’s always an element of unpredictability, but good research lays the groundwork. It gives you a clearer understanding of what you’re up against and where your opportunities lie.

Step 2: Check out the CrossFit Affiliate Starter Kit

When you’re gearing up to open your CrossFit gym, you don’t have to go it alone. CrossFit provides resources like the Affiliate Toolkit and the Affiliate Starter Kit to help new gym owners navigate the often tricky waters of setting up a CrossFit business.

What’s in the Affiliate Starter Kit Course?

The Affiliate Starter Kit Course is like a crash course in gym ownership, focused on the specifics of running a CrossFit gym. It’s an online course that walks you through everything from applying for affiliation to setting up your space and attracting your first members. The course includes video tutorials, interviews with successful gym owners, and quizzes to test your understanding.

Step 3: Write a Business Plan

After all your groundwork and market research, your next move is to write a business plan. Think of it as your roadmap, laying out the route from startup to successful operation. A business plan serves as a reality check. It helps you define your goals and the steps to reach them, in addition to projecting income and expenses. This financial forecasting can help reveal whether your CrossFit gym has the potential to be a feasible endeavor. You can see how much cash you’ll need upfront and how long it might take to turn a profit, which is essential information for both you and any potential lenders.

Related: How to write a business plan

Step 4: Secure Funding

The path to opening your own CrossFit gym is paved with more than good intentions and a passion for fitness. It’s often the financial aspect that turns dreamers into doers – or stops them in their tracks. So, let’s look at common ways to fund a new CrossFit gym.

Personal savings: Many aspiring business owners start by looking at their personal savings accounts, retirement funds, or other assets as a starting point. Be mindful, though; dipping into retirement funds or assets can be risky if the business fails.

Family and friends: Your family and friends believe in you, and some may even be willing to invest in your dream. If you go this route, it’s important to draw up legal agreements that spell out the terms to protect everyone involved. Make sure everyone is clear on whether the money is a loan or an investment and what the repayment terms are.

Bank loans: Banks offer a range of small business loans that can be tailored to your needs. If a bank considers your loan risky, you might be offered a loan backed by the Small Business Administration (SBA) to reduce the bank’s risk. A strong business plan and a good credit score are often non-negotiable requirements for bank loans.

Business credit cards: Business credit cards can provide a quick way to cover costs like equipment, supplies, and operating expenses. Just be wary of the interest rates and try to pay off the balance as soon as possible to avoid costly debt.

Crowdfunding: Platforms like Kickstarter and GoFundMe allow you to pitch your business idea to a wide audience. You can offer rewards like free classes or gym merchandise to attract backers. It’s a good way to test market interest, too.

Business partners: Consider bringing on a co-founder or partner. Not only can they provide additional startup capital, but they also share in the risks and can offer skills that complement your own.

Equipment leasing: Rather than purchasing equipment outright, leasing preserves capital and provides flexibility. This approach lets you upgrade or swap out equipment as your business grows, providing more flexibility.

Microloans: For those who don’t require a large sum or who can’t secure funding through traditional lenders, microloans offer an alternative. Some even come with business training programs.

Related: Finding the money to start a business

Step 5: Register the Business

The exciting journey of opening your CrossFit gym takes a big turn in this step as you transition from planning to making it a legal entity. This might sound a bit dull compared to selecting gym equipment or planning workout routines (that’s coming soon enough), but it’s just as important. Let’s dive into the steps you need to take.

Choosing the right business structure: First up is picking the right business structure for your gym. You generally have four options:

  • Sole proprietorship: This is the simplest and least expensive structure to set up. You’re the only owner and fully responsible for all debts and actions of the business.
  • General partnership: This involves two or more people sharing the profits, losses, and responsibilities of the business.
  • Corporation: This structure provides liability protection and is a separate legal entity from its owners.
  • Limited Liability Company (LLC): This offers some liability protection like a corporation but has the easier administration of a sole proprietorship or partnership.

While each state has its own rules for registering businesses, most CrossFit gyms opt for an LLC structure because it offers a balance between liability protection and operational flexibility. This isn’t a one-size-fits-all answer, so do your research on what makes sense for you.

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!

Business name registration: 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.

Related: Tips for naming a gym

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

Obtain Level 1 CrossFit certification: Before you can open a CrossFit gym, you must first obtain a Level 1 CrossFit certification. This is a requirement set by CrossFit, Inc. to ensure that all affiliated gyms maintain a certain standard of knowledge and quality. The certification process involves attending a two-day course where you’ll learn the fundamental principles and movements of CrossFit.

Obtain 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 as well.

At the local level, some cities will require special permits and follow certain rules to open and operate a fitness facility.

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

Related: What types of licenses does a CrossFit gym need?

Step 6: Acquire & Set Up the Location

Finding and setting up the ideal location for your CrossFit gym requires attention to multiple factors, from the size and layout of the space to the equipment and technology that will power your operations. While the process is demanding, a well-thought-out approach will set the stage for a thriving community of dedicated CrossFit enthusiasts.

The ideal location for a CrossFit gym often leans toward warehouse-type buildings with spacious open floorplans and ample parking spaces. You should also consider the potential for outdoor sessions depending on your locale.

When calculating the size, plan on at least 10 square feet per client. This should accommodate administrative space, locker rooms, and a lounge area. Aim for at least 2,000 square feet, but if you find something larger within your budget, it’s often worth the extra cost.

Once you’ve locked down the location, your next step is to design the gym layout. It should allow for clear sight lines for coaching and enough space between workout stations and equipment. The layout isn’t just for aesthetics; it’s crucial for safety and effective coaching. Depending on the facility, you may need to do renovations to meet your needs. This could include floor refinishing, lighting upgrades, HVAC systems, bathrooms, locker rooms, and meeting ADA compliance standards. Make sure to budget for these upgrades and get all the required permits in place before starting the work.

You’ll also need to purchase and install CrossFit equipment like barbells, bumper plates, pull-up bars, kettlebells, and rowing machines. Don’t skimp on quality; cheaper gear often ends up costing you more in the long run.

Your gym also needs reliable management software to handle bookings, payments, and member engagement. Look for a platform that offers a smooth sign-up process, flexible payment plans, and recurring billing options. Names to consider are Zen Planner, PushPress, or Wodify, all of which offer comprehensive solutions for membership management, payment processing, and scheduling.

Step 7: Hire Staff

Hiring the right team is critical for the success of your CrossFit gym. Whether you’re bringing in front-desk personnel, coaches, or administrative staff, your employees can make or break your business.

Before you start hiring, you’ll need to get an Employer Identification Number (EIN) from the IRS for tax identification. Ensure that all potential hires are eligible to work in the United States by verifying their documentation.

Employment laws vary from state to state, so be sure to look into your own state’s specific requirements, but generally, you will need to report new hires, complete payroll tax registration, and have worker’s compensation insurance in place, covering your employees in case of work-related injuries. Also, be sure to familiarize yourself with both federal and state labor laws to ensure you’re compliant with minimum wage, overtime, and workplace safety standards.

Last, if you’re hiring coaches, they must hold a CrossFit Level 1 certificate, just as you do as the gym owner, to ensure a standardized level of coaching quality and safety.

Step 8: Create a Marketing Strategy

Creating a marketing strategy is important for the success of your new CrossFit gym.

Start off by making sure your branding is on point. A logo that reflects your gym’s personality and values can go a long way. Ensure this branding is consistent across all your marketing materials and online platforms.

Speaking of an online presence, Facebook, Instagram, and TikTok are great platforms for CrossFit gyms. Use these platforms not only to showcase your brand but also to highlight workouts, celebrate member achievements, and run targeted ads. An optimized website is equally important, ensuring that your gym shows up in local searches like “CrossFit [Your City].”

Introductory classes can serve as a powerful tool to attract new members. Offering free or discounted initial sessions can give people a taste of what you offer, making them more likely to sign up. Pair this with a starting package, maybe even tossing in some free branded merchandise like t-shirts or water bottles to sweeten the deal (and market your business more).

Don’t underestimate the power of community partnerships. Partnering with nearby businesses can provide a two-way street of benefits. For instance, offer corporate wellness plans to local companies or give member discounts at nearby nutrition shops, physio clinics, or sportswear stores. In return, these businesses can cross-promote your gym. You can also co-host events with businesses that complement your services, such as juice bars or physical therapists, making it a win-win situation for customer engagement.

By combining these elements thoughtfully, you can create a marketing strategy that attracts and retains members, setting your CrossFit gym up for long-term success.

Related: Low-cost ideas to market a new business

Step 9: Prepare to Open

You’re almost there; you’ve tackled the significant hurdles like creating a business plan, securing funding, and setting up your facility. But before you can celebrate the grand opening of your CrossFit gym, you’ve got some last-minute details to cover. Every business will have different needs, but here are some common tasks:

First up, business insurance. This isn’t just a good idea; it’s a necessity to protect your business from potential risks. Gym business insurance protects you from risks such as injuries on the premises or damage to equipment.

Setting up bookkeeping is another vital step for tracking income, expenses, and overall financial health. Consider hiring a professional bookkeeper or investing in accounting software such as Wave Accounting (FREE) or Quickbooks.

Contracts come next. You’ll need various agreements like membership contracts for your clients.  RocketLawyer and Law Depot have free and inexpensive templates that may be helpful, but consider having them vetted or created by a legal advisor familiar with the fitness industry.

It’s also a good idea to open a separate business bank account. This helps you keep personal and business expenses separate, simplifying your bookkeeping and tax filing processes.

Finally, there’s the grand opening. Plan a launch event that embodies the community and energy you want to foster. This is more than just a celebration; it’s your first big marketing push and a way to introduce your brand to the community.

Greg’s Tip: Community is essential in the success of a CrossFit gym. Hire coaches who have an outgoing personality and actively engage and guide new members from Day 1. Don’t just point customers to a workout.

Greg's Business Tip

Common Questions When Starting A Crossfit Gym

How much does it cost to start a CrossFit gym?

Starting a CrossFit gym can cost between $50,000 and $250,000, depending on the size of your facility and new vs. used equipment purchases. Here are typical costs to plan for initially:

Location deposit: $5,000 to $10,000 for the first month’s rent and security deposit to secure your leased space.

Leasehold improvements: $10,000 to $30,000 for facility buildout like flooring, lighting, and bathrooms.

Equipment: $15,000 to $100,000 for functional training equipment like barbells, weights, racks, and cardio gear.

Insurance: $2,000 to $5,000 for the first year’s general liability insurance policy.

Marketing: $2,000 to $5,000 for initial brand identity, website, and promotional materials.

Business registration
Level 1 certifications: $1,000 per trainer
CrossFit affiliation: $3,000 annually
Business formation & licenses: $500

Working capital: $10,000+ to cover rent, marketing, payroll, and other expenses for the first few months.

How much does a CrossFit gym owner make?

Based on industry research, a typical CrossFit gym with 150 members charging $150 in monthly fees can generate around $270,000 in annual revenue from memberships alone. Additional revenue from private training, camps, and merchandise could add another 15-20%, bringing total potential annual revenue to $300,000-$325,000.

On the expense side, rent, equipment leases, utilities, insurance, and payroll for 3-4 coaches could cost around $180,000 per year. Marketing, professional services, equipment maintenance, and other overhead may total $30,000-$50,000. That puts total annual expenses in the range of $210,000-$230,000.

By subtracting expenses from total revenue, the potential annual pre-tax profit for a CrossFit gym with 150 members at $150/month works out to roughly $70,000-$100,000 per year.

Of course, actual profits depend on membership levels, pricing power, and how well you manage costs. But this provides a realistic benchmark for projected earnings from a thriving CrossFit gym.

What skills are helpful in running a CrossFit gym?

Running a successful CrossFit gym requires a combination of technical skills, business acumen, and interpersonal abilities. Here are some key skills that can be beneficial:

Fitness expertise: Having a solid background in fitness, exercise science, or a related field is crucial. CrossFit trainers need to understand a wide range of movements and exercises and how to adapt them for beginners. They also need knowledge about stamina, flexibility, speed, accuracy, power, strength, coordination, balance, agility, endurance, and other physical skills.

Business management: You’ll need to know how to manage finances, create a business plan, market your gym, and handle other business-related tasks. This includes the ability to make tough or unpopular decisions and listen to your instincts.

People management: The ability to manage people effectively is critical in running a CrossFit gym. This includes hiring and training staff, dealing with customer complaints, and fostering a positive community atmosphere.

Coaching skills: A great CrossFit coach needs to have specific attributes, such as patience, empathy, strong communication skills, and the ability to motivate and inspire others.

What is the NAICS code for a CrossFit gym?

The NAICS code for a CrossFit gym is 713940, which is classified 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 and how to find yours

How To Start A CrossFit Gym

How To Start A CrossFit Gym

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