A good gym involves a lot more than just the right exercise equipment. You need to think of the type of clientele you’ll be serving, membership and subscription fees, hosting fitness classes, and finding new ways to make your gym stand apart from your competitors. Setting up a gym is by no means an easy task, which is why the best way forward is to start off with a gym business plan.
So what is a business plan?
It is a formal document that lays down who you are as a business and gives a realistic picture of where the business will go in the future. At a fundamental level –
It is a document that shows exactly how your business works, how it’s going to succeed, and the steps you need to take to get there.
Do you even need a business plan for your gym?
Industries are now gradually clawing back to their pre-pandemic growth rate. Old enterprises are re-opening and new businesses are popping up faster than we can imagine. To new entrepreneurs, business plans are more of a formality that can be overlooked. But sometimes, undermining the importance of a strategic plan for the growth of your business can backfire.
According to a study, business owners who have a well-defined business plan have almost twice the probability of securing capital and growing their enterprise when compared to those who don’t.
How will a gym business plan help you?
The primary purpose of a plan is to create a roadmap of how a gym will progress in the foreseeable future. Writing a business plan can be a useful exercise to help you discover fresh ideas which you might have missed and gauge if there is any room for improvement. While starting a gym, you can rely on your business plan for things like:
- Deeper assessment of the market: Making a business plan forces you to research the various aspects that will influence your gym’s success. These could include things like your ideal clients, target market, facility and equipment costs, local competitors, and any other market variables that could impact your business’ success.
- Choosing the right way forward: By getting ideas down on paper through various rough drafts of plans, you will be able to evaluate what has the best chance of success. This allows you to focus your time and energy wisely.
- Fund acquisition: Without a clear image of how the money will be used, no smart investor or lender will put money into a business. A good business plan lays out how the money will be spent and what the primary goals will be.
- Detailed mapping: Even though you have company goals in mind and rough ideas for achieving them, having your strategies written down is not the same as having them in your head. A good gym business plan will include thorough plans for marketing, resource allocation, hiring new staff, and other initiatives to help you achieve your objectives. It can assist you in understanding the scope of the fitness industry and determining the resources required to get started.
How do you go about writing one?
Creating a business plan is an organized and detailed process that helps you define the key metrics associated with your business. For this, you need to have a mindset that helps you to make strategic decisions while having realistic expectations. To begin with, ask yourself:
- Where are you right now?
- Where do you want to be in the future?
- And, how do you envision yourself getting there?
Understanding the answers to these questions will put you in the right spot to draft the best possible plan for your gym. Generally, there are 2 types of business plan templates:
- Lean start-up business plan; and
- Traditional business plan.
A lean start-up business template highlights the key components of your strategy which allows you to view all the relevant details of your business in a single go.
However, having just a lean start-up plan for your business isn’t enough. Banks and financial institutions require extensive business plans as they can showcase an in-depth study of your business and how you plan to take it forward.
A compromise between the two might be the best for your gym. A lean business plan template could be useful for having an overview of your setup. There will be many occasions where you might need to refer to your plan for some important decision, and a lean business plan would be useful in those instances. On the other hand, a detailed gym business plan will be a necessity during fund acquisition, asset expansion, and internal guidance. So keeping both of these handy will not put you at a disadvantage, to say the least 🙂
The 9 key elements of a detailed gym business plan
Drafting a gym business plan is by no means an easy task. You have to strategize a plan of operation, dig deep into the market, run competitor analysis, project financial data for upcoming years, and collate everything in a single document.
We have established businesses that can be susceptible to changes, so owners of pre-existing gyms need to know about how they should update their business plans for future reference.
On the other hand, upcoming gym owners might not know what to include in their business plan, simply because this isn’t something people do on a daily basis. On top of that, they also have to keep their preparation for setting up their gym on track.
While all of that may seem a little overwhelming at first, it’s okay to work at your own pace and do your tasks one step at a time. You don’t have to learn everything at once. This is why, for your reference, we have put together a series of blog posts on:
- How to draft a gym business plan; and
- How to start a gym.
Now that you have a fair idea of what a gym business plan means and how important of a role it plays in the growth of a gym, let’s look at its 9 key elements which will help you cover every single aspect of your gym without missing out on anything:
- Executive Summary
- Gym Business Overview
- Market Analysis
- Competitor Analysis
- Products and Services
- Sales and Marketing Strategies
- Management and Operation Plan
- Financial Projections
- Funding Requirements
We have also included a sample gym business plan for you at the end of this blog (Click here to go right to it).
1. Executive Summary
Having a strong executive summary is crucial if you’re looking for investors or loan sanctions. If your first few pages aren’t compelling enough, potential investors or loan officers would find the document mundane, which is the last thing you would want!
This section is basically a summary or an overview of the business plan. Give a brief description of your gym along with a summary of the market analysis that you have done. Then explain why your gym is uniquely qualified to fit in this market. Your executive summary should address the following questions:
- What is your business model and its strengths?
- What market demand will your gym fulfill?
- What key market data supports your concept?
- What is your competitive advantage?
- What will be your support line in terms of revenue, expenses, and profit/loss for the first three years?
- What are you requesting in terms of funding?
Remember!
While you’re working on the executive summary, you might find yourself wanting to fill in more data than required, and it is important that you DON’T. The purpose of the executive summary is to highlight your goals for the gym and to give a very high-level understanding of the steps you will be taking in order to achieve those goals. You will have plenty of opportunities to fill in all the relevant information under the coming sections.
2. Gym Business Overview
This is a more detailed description of your gym, the clientele you serve (or the clients you hope to serve), and how it stands out from the competition. This is also a good place to include your goals for your gym
The executive summary captures the mission statement and a high-level understanding of the goals that you want to achieve. You can build on these points in your gym business overview to provide further detail. Try to cover:
- The purpose of your gym – Spreading awareness about maintaining good health, helping people stay fit, etc.
- Target audience; niche-specific type of gym
- The founding details of your enterprise
- Strategies you will be adopting in different departments to achieve your goals
- The legal structure of your business
3. Market Analysis
Focus on writing about what your market is about and the specific niche your gym fits into. Think of things like:
- Do you have a niche?
- What kind of audience comes under this niche?
- What are the current trends in the fitness industry? Do your business plans cover these trends and how compatible are these trends with your ideal clients?
Carefully examine your local market and your gym’s potential to fit into that market successfully. It’s a good idea to include some hard data and statistics to show where the market has been and where it’s expected to go.
4. Competitor Analysis
Research your competitors. You should make a list of direct and indirect competitors with their strengths and limitations, as well as how your gym compares to them.
- Direct competitors: This includes gyms similar to yours in the local area that are going after the same type of customer.
- Indirect competitors: These are the other types of gyms, health and fitness-based centers in your local area that target your market with different kinds of products and services.
You can talk to locals, hand out questionnaires, and do surveys to gain some insights. Ask them why they chose their current gym, what all do they think they are missing out on, and try to capitalize on that. Getting real-time information can be difficult but it is the most valuable feedback you can get. Collate the data under this heading and highlight how your gym can fulfill the wants of your potential customers.
5. Products and Services
This section is a detailed breakdown of what you offer to your customers. It should cover membership options, group classes, available exercise equipment, and personal training opportunities. You can also include child care options, or special training sessions, whatever fits your idea.
Discuss the needs that your services fill for your target audience. Use this section to detail any plans to add or change services, including the projected cost and payoff for those changes.
You could also explore opportunities to sell products. This can help you establish your brand and kick off an additional source of revenue. Ensure that if you plan to sell health food items, keep in check with food hygiene standards and include procurement sources and a budgeting overview.
6. Sales & Marketing Strategies
Sales & marketing strategies are a key part of the fundamentals of funding plans and financial projections. These are highly dependent on market research and competitor analysis. Your marketing strategy can comprise of:
- Improving services
- Advertising
- Sponsorship
- Loyalty plans
- Website promotions
- Email marketing
- New equipment
- Promotions
- Prices
There are no boundaries to your ideas here. It is very important to try and cover all possible bases because these strategies will help you maintain the rate of client acquisition and increase your client retention period. For an in-depth understanding, this section should address the following questions:
- What membership types will you offer and what will you charge for them?
- What are your sales forecasts?
- What is your strategy to get your target market into your club and convert them into members?
- What is your unique selling proposition?
- What promotional offers and marketing strategies will you use during pre-sale and post-launch?
- How will you retain your members?
It’s easy to overlook marketing strategies while doing extensive research on other things which constitute your business plan, which is why we’ve created a list of some simple, low investment, and high ROI gym marketing ideas. Check out this blog to learn about different ways to get more clients for your gym.
7. Management & Operations Plan
This is one of the most important sections of a business plan, while you’re in the phase of opening a gym because this will outline how your gym will actually function and what are the various moving parts involved.
Lay out the key members of your management team and the experience they can bring to help grow your business. This should not be limited to fitness experts and trainers you hire, but also people with business experience who will help you with administrative tasks. It is important to show any potential investors that the right people are in place to help your gym succeed.
If you plan on managing the club, include your bio alongside the rest of the management team’s profile in the appendix. Provide an organizational chart along with a description of any non-management staff you’ll need. They can include:
- Personal Trainers
- Dieticians
- Sales/membership managers
- Storage handlers
- Customer service
- Maintenance personnel
Outside of rent, labor is the biggest expense for most fitness club operators, so having the right compensation is critically important. Break down your management and staff profile, along with their compensation and benefits plans. (Xanax)
Remember!
How you structure compensation and benefits will impact your ability to attract and retain a strong team and can make the difference on whether or not your business is profitable in the short and long term. So give these points and good thought before cementing anything in your plan.
8. Financial Projections
Include your financials for the most recent year, as well as your projected revenue for the coming years. These projections should be based on the solid market research you’ve done.
Create comprehensive financial projections that include income statements, balance sheets, and cash flow statements for the next three years based on the expected best and worst-case scenarios. Provide context for these numbers by comparing them to industry benchmarks. Start-up costs, payroll expectations, debt payment schedules are important to reference as well.
Make sure to consider membership and revenue-generating service ramp-up, membership churn, and staff compensation in your projections.
9. Funding Requirement
Use this as an opportunity to think realistically about your business. Include the key external resources you might consider to get funded. These could be:
- Personal savings
- Soft loans (family members, friends, gifts)
- Bank loans
- Crowdfunding
- Partners
- Sponsorship from other business
Detail exactly where you plan to get your funding from, and how much. If you’ve previously made loan applications, make a note of them here for any potential investor to consider.
Conclusion (+ Free template)
Starting a business has its own set of challenges, but the payoff is well worth the effort in the end. If you have a gym business plan that covers all you’ve learned so far, you’ll be able to kickstart a gym with a bang! Simply because your plan:
- Will act as a point of reference for you when you have to make important decisions.
- Be a resource to help you secure investment.
- Give you the security that you have explored all aspects of your new business.
- Show partners or new employees which direction you aim to head in.
Want a template to get you started?
Check out this gym business plan template that we’ve created for you.
Download the FREE gym business plan template!
Save it or print it out and use it to create a robust business plan!
Yay! You are one step ahead in a successful personal training business!
Remember!
Every business is unique. So, don’t be afraid to tailor your own gym startup business plan that is specific to your needs. Even though sample business plans are designed to assist you in creating the ideal presentation for your clients and investors, it is ultimately up to you to decide how you can best communicate your ideas.
Good Luck!
About Appointy
We at Appointy, help business owners grow and run their businesses with our online scheduling software. This blog was a part of our ‘Manage your Business’ category, where we provide expert tips, and resources, or simply talk about the challenges that small and medium businesses face every day.
If you have any thoughts on this blog or would like to chat about your business struggles and achievements, let us know in the comments below.
We love a good talk!