Is Owning a Gym Profitable? Business Potential of Fitness Centers

Are you considering becoming a gym owner? Or perhaps you're already a gym owner and wondering if your business has the potential for long-term profitability. Either way, you've come to the right place.

In this guide, we'll explore the ins and outs of the fitness industry and take a deep dive into the world of gym ownership. We'll analyze the costs and benefits to gym owners, discuss the factors that can impact profitability, and share some tips for creating a profitable gym in today's world.

So if you're ready to flex your business muscles and learn more about the exciting and dynamic world of the fitness industry, let's get started!

How much do gym owners make?

So how much do gym owners make anyway? It's a common question, and the answer varies depending on several factors.

Glassdoor, a job review site and marketplace, estimates that the average total pay for a gym owner is £43,221 with additional cash compensation averaging £3,900 [1]. The range of salaries these averages were based on greatly differed depending on the size and location of the gym. Meanwhile, according to Origym, the management position in a gym the average annual pay for a UK gym owner is £30,800 [2].

So what can we take away from these numbers? While owning a gym can be profitable, the amount of money a gym owner can make is highly dependent on many factors. Prospective gym owners need to do their research and have a solid understanding of the costs and potential profits before jumping into the world of gym ownership.

Factors that can impact a gym's profitability

The gym business can be highly profitable, but several factors impact its financial success. Here are some key factors that can influence the profitability of a gym business:

Location and size:

The location of a gym can have a significant impact on its success. A gym in a high-traffic area with good visibility and accessibility can attract more customers than one located in a remote or hard-to-reach location. A gym near a residential or business district can also increase its potential customer base. 

However, the size of the gym will affect your location choice too. Some clients prefer larger gyms with areas for group activities like spinning classes, free weights, yoga or dance classes and more. This can limit the choices for the location for your gym business. Other clients prefer smaller gyms, often with specialised equipment or tailored to a target audience, such as martial arts gyms or women-only gyms. These private gyms or locally-owned boutique gyms often have fewer members but cost more for memberships.

Size doesn’t limit the potential success of your gym but will refine your location choices, customer base and marketing efforts, which will all link to how profitable your business can be.

Competition: 

Competition can be fierce in the gym industry, especially in densely populated areas. A new gym may struggle to attract members if there are established gyms nearby with loyal customer bases. However, while a gym in a larger city will likely face more competition, it may also be able to charge higher monthly fees, depending on amenities and ease of access. Understanding the competition and offering unique and attractive features or services is essential to stand out.

Pricing:

Pricing is a critical factor in a gym's profitability. If a gym's pricing is too high, it may struggle to attract members, while if it's too low, it may not generate enough revenue to cover expenses. A gym owner must strike the right balance between competitive pricing and profitability.

Equipment: 

The quality and variety of equipment available at a gym can also impact its profitability. A gym with a wide range of modern equipment can attract more members than one with outdated or limited equipment. However, investing in new equipment can be expensive and may require significant capital.

Staffing:

The staffing of a gym is another crucial factor in its success. Well-trained and qualified staff and personal trainers can provide excellent customer service, maintain the equipment, and offer personalized training sessions, which can lead to increased membership and retention rates.

Maintenance: 

Regular maintenance of equipment is essential for member safety and the longevity of equipment. Regular maintenance can help avoid costly repairs and replacements, positively impacting a gym's bottom line.

By analyzing and understanding these factors, gym owners can make informed decisions to increase gym revenue and build a successful business. It is crucial to monitor financial performance continually, track key metrics, and adapt strategies as needed to ensure long-term success.

TIP: Check out our gym startup costs blog for a complete overview on what initial investment you need to make when opening a gym.

Owning a gym: the benefits

It's not all bad, though, we promise! Opening your own gym can be an exciting and lucrative business venture. Here, we'll break down the key benefits and profits to decide if owning a gym is right for you.

Monthly gym membership: 

One of the primary benefits of owning a gym is the steady stream of monthly membership fees. Depending on the size of your gym business, its location, and the number of members, monthly fees can range from less than £20 to several hundred per month.

On top of that, you may also be charging:

• Sign-up or initiation fees
• Annual fees
• Cancellation fees

Personal training and classes:

Successful gyms often offer personal training and group classes, which can be a lucrative source of income. For example, a gym owner might charge £40 per hour for personal training sessions and £20 per class for group classes. If you have a successful gym, you could potentially have dozens or even hundreds of members signing up for these services each week.

Retail sales: 

Many gyms sell merchandise like workout clothes and supplements. A successful gym owner can make significant profits from additional revenue, like retail sales.

Flexibility:

As a gym owner, you have the flexibility to set your own schedule and work hours. You can also design your gym's layout and equipment, creating a unique environment that reflects your vision and caters to your members' needs.

Community building:

Owning a gym provides an opportunity to build a community around your business. You can foster a sense of camaraderie among your members by hosting events and promoting group fitness classes. This creates a loyal customer base and enhances the overall gym experience for members.

Health benefits:

Owning a gym or fitness club promotes a healthy lifestyle, which can be personally rewarding. As a gym owner, you'll be helping people improve their physical health and mental wellbeing. This can be particularly fulfilling if you're passionate about fitness and want to positively impact people's lives. (And, of course, as an owner you’ll likely be making full use of the gym as much as your members do!)

Branding opportunities:

As your gym business grows, you can develop your brand and create a recognizable identity that resonates with customers. This can include designing a unique logo, creating branded merchandise, and promoting your gym's values and mission.

Potential for expansion:

If your gym or fitness club is successful, you can consider expanding your business by opening additional locations or offering franchising opportunities. This can increase your revenue and build your reputation as a respected gym brand.

Has this tickled your interest in launching your own fitness business? If so, check out our how to open a gym guide for a step-by-step on starting your own gym.

7 tips for making your gym business profitable:

1. Location is key:

Choosing the right location for your gym can make or break your business. Look for a location that is easily accessible, has ample parking, and is in a high-traffic area. Consider factors such as demographics, competition, and proximity to residential areas.

2. Create a unique experience:

In a crowded fitness industry, it's important to differentiate yourself from competitors. Focus on creating a unique gym experience that sets you apart. This could include offering specialized fitness classes, investing in state-of-the-art equipment, partnering with other companies in your local community, or providing exceptional customer service.

3. Offer a variety of membership options:

Not everyone wants a long-term commitment to a gym. Offering various membership options, such as monthly or pay-as-you-go plans, can attract a wider range of potential customers and increase revenue.

4. Invest in marketing:

A successful gym business relies on a steady stream of new members. Invest in marketing strategies that will attract and retain customers, such as social media advertising, email campaigns, and referral programs.

5. Maximize efficiency:

Look for ways to streamline your operations and reduce costs. This could include automating administrative tasks, negotiating with vendors for better prices, or implementing energy-efficient practices to reduce utility bills.

6. Focus on member retention:

It's much easier and cost-effective to retain existing members than to constantly attract new ones. Offer incentives such as loyalty programs, personalized training plans, or member appreciation events to keep loyal customers engaged, motivated, and returning to your gym.

7. Stay up-to-date with industry trends:

The fitness industry is constantly evolving, so it's important to stay current with new trends and technologies. Invest in training and development for yourself and your staff to ensure you're offering your members the latest and greatest fitness programs and equipment.

Let's see these tips in action...

Meet John, who owns a small gym in a suburban area. John spent £200,000 on gym equipment and pays £3,500 a month in rent. He employs a team of five staff members who earn a combined £120,000 in wages and benefits each year.

John charges his gym members £50 per month for membership, and his gym has 500 members. His gym also offers personal training and group fitness classes, with an average of 50 members signing up for each service per week.

John's gym generates an annual income of £780,000 from memberships alone. In addition to that, he earns an average of £20,000 per month from personal training and group fitness classes and an additional £5,000 per month from retail sales. After deducting his monthly expenses and business overheads, John's gym generates a net profit margin of £225,000 annually.

So how can John improve his profit margins?

🏋️ Upsell personal training and group fitness classes: John could encourage more of his members to sign up for personal training and group fitness classes by offering package deals or promotions. He could also consider adding classes or expanding the schedule to attract more members.

🏋️ Offer member referral incentives: John could offer existing members incentives for referring new members to the gym, such as a free month of membership or a discount on personal training. This can help increase his membership base without spending money on advertising.

🏋️ Utilize social media: John can leverage social media to promote his gym and reach potential new members. He could use platforms like Instagram and Facebook to showcase his gym, post updates on class schedules, and offer exclusive promotions.

🏋️ Partner with local businesses: John could partner with other local businesses, such as health food stores or fitness clothing brands, to offer discounts to their customers or promote each other's businesses. This can help drive more foot traffic to his gym and increase revenue.

How can a gym POS system help?

If you're a gym owner, you know how important it is to streamline business operations and maximize profits. One way to do this is using a gym point-of-sale (POS) system.

A gym POS system is designed specifically for fitness businesses and can help automate your daily tasks, such as scheduling classes, tracking member attendance, managing inventory, and more. But one of the most significant benefits of a gym POS system is its payment processing services. 

With a gym POS, you can offer your members multiple payment options, including credit/debit cards, mobile payments, and even recurring billing. This flexibility makes it easier for members to pay for their gym memberships and services and helps increase revenue by reducing payment-related issues and increasing member retention.

TIP: Epos Now’s Payment Processing seamlessly integrates into our all-in-one system making payment seamless. 

Additionally, gym POS systems can help you manage your business's financials by providing you with real-time sales reports, tracking expenses, and helping you monitor inventory levels. This information can be used to identify areas where you can cut costs, optimize pricing strategies, and ultimately increase profitability.

Sweat it out: final thoughts on owning a gym

Owning a new business in the fitness industry can be a rewarding experience both personally and financially. With the right strategy, mindset, and tools, you can build a thriving fitness business that not only helps people achieve their fitness goals but also generates steady revenue for you. 

However, it's important to remember that owning a gym is not a get-rich-quick scheme. It requires hard work, dedication, and a willingness to adapt to the ever-changing needs and demands of the fitness industry.

So, before diving headfirst into gym ownership, take the time to research, assess your financial situation, and create a solid business plan that considers all the factors that can impact your gym's profitability.

With the right mindset, resources, and passion for fitness, you can build a profitable gym that not only helps you achieve your financial goals but also makes a positive impact on people's lives. So sweat it out, and make your fitness business dreams a reality!

Interested in learning more about opening and running your own fitness business? Check out our additional resources below:

• Gym licenses and costs
• Cash flow statement guide
• The most profitable small business
• 9 cost saving ideas for the workplace