How profitable is owning a gym?

Posted by Tyler Spraul, Certified Strength and Conditioning SpecialistĀ® (CSCSĀ®) on January 1, 2023 ā€” Updated on November 28, 2023

Gym profit margins vary depending upon the type of gym, location, and other factors. The average gym profit margin is 10-15%, with franchise gym profits on the lower end of 10%, boutique fitness studios averaging 20% to even 40% profit margins, and CrossFit gym profit margins in the 25-30% range.

How profitable is owning a gym?

So, is owning a gym profitable? Are gyms profitable businesses? Just how profitable are gyms exactly? Do gyms make money? Yes!

Read on to learn more about average profit for various types of gyms, read our gym owner guide, and check out the best gym management software. Learn how to increase gym revenue and profit and how to run a successful gym with the best gym payment processing software and best all around platform for managing your entire gym.

Maximize your gym’s average order value with a best-in-class payments stack.

Payments
Smart Gym Payment Processing & Online Payments Increase Gym Profit Margins

Sell products and services in-person and online.

On-Demand

Book appointments to keep your gym calendar full of profitable clients.

Booking

Engage your leads and gym members with email, SMS, and in-app notifications to get more sales.

SMS

All from your own custom branded fitness app.

Custom Branded Apps

See why the best gym management software, the best personal training software, and the best online fitness coaching software is all a single platform for growing your gym’s profitability: Exercise.com.

APEC
Exercise.com is simply the best. We were using three or four different apps or softwares to do what we can now do all in one with the Exercise.com platform.
Brandon Stroupe
Founder and President, APEC Sports Performance

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Gym Profit Margins by Type of Gym

Here are the average gym profit margins for different types of gyms:

Type of GymAverage Profit MarginSource
Boutique fitness studios20-40%SoulCycle press release (https://www.soul-cycle.com)
Traditional gyms10-15%International Health, Racquet & Sportsclub Association (IHRSA) (https://www.ihrsa.org/about-the-industry/)
Franchise gyms10%FranchiseHelp (https://www.franchisehelp.com/industry-reports/fitness-industry-report/)
CrossFit boxes27%National Association of Professional Trainers (https://www.naptnation.com/)
Yoga studios20-30%Yoga Alliance (https://www.yogaalliance.org/)
Pilates studios20-30%Club Industry (https://www.clubindustry.com/)
Swimming pool and aquatic centers10-15%National Swimming Pool Foundation (https://www.phta.org/)

Are fitness centers profitable? Are franchise gyms profitable? Are CrossFit gyms profitable? They all can be! From the table above you can see that the average boutique fitness studio profit margin is 20-40%, the average traditional gym profit margin is 10-15%, the average franchise gym profit margin is 10% (quite a bit lower than other gyms, but with a more established playbook and higher certainty of financial success), the average CrossFit gym profit margin is 27%, the average yoga studio profit margin is 20-30%, the average Pilates studio profit margin is 20-30%, and the average swimming pool/aquatic center profit margin is 10-15%.

If you are considering starting a gym then learn all about how to open a gym, how much it costs to open a gym, how to create a gym business plan, how to create a gym budget, how to get a gym loan, and all of the various fitness business ideas you can ideate on when deciding how to start a fitness business and decide which fitness business is right for you. There are lots of ways to make money from fitness and opening a gym is just one of them (For example, you can create a fitness app, you can sell fitness online, you can start a fitness bootcamp business, etc.)

And, of course, you can do all these things on the Exercise.com platform, whether you want to start and grow your gym or fitness business in-person or online.

PJF Performance
I sold a workout program and matched my yearly salary of in-person training within two weeks of selling to my community!
Paul Fabritz
Founder and BS, CSCS, NSCA-CPT, ACE, FMS, PJF Performance

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Factors that Influence Gym Profitability

Of course, it is important to note that gym revenue and gym profitability can vary widely from one gym to another. Key factors for gym business profits include the gym owner/operator’s experience level, the type of gym business model, the market/location, the cost structure, pricing strategies and other factors.

Yes, it’s great to increase gym revenue, but as a gym owner (read our gym owner guide to learn more), what you really want to do is to increase your gym’s profits, because that is what’s left over after paying all your expenses, and what ultimately will end up as cash in your bank account. Sure, having average gym revenue is a milestone, but if you want to be one of the most successful gym owners, then you likely want to earn more profit as a gym owner than the typical average gym owner salary of $150,000 per year.

What makes a profitable gym? Experienced gym owners implement a number of key strategies for increasing gym profits.

From upsells and online training memberships:

Upsells & Online Training Memberships Increase Gym Profitability

To smart time-saving fitness automations for member engagement and retention:

Automations
Member Engagement Automations Increase Gym Profit Margins

Gym owners use the Exercise.com platform to manage and grow their gym’s profitability every single day. Upsells and automations are just one of many profit-boosting features. From gym check-ins to workout logging and gym payment processing, gyms of all sizes (and profit margins!) can improve their gym profitability with one improvement at a time.

Mike Boyle - Sled Push
“The Exercise.com team is amazing, and their all-in-one software is more than we ever expected! All of this is made possible by a high-quality team.”
Mike Boyle
Co-Founder, MBSC

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Read More:

How to Increase Gym Profitability

There are a number of ways to increase gym profitability.

Talk to us about how we can help your gym with software tools to power gym growth.

Jimmy Myers Relentless Sports Performance
If you want to offer an elite service for the end user you need to get with the times and use elite level software that is intuitive, visually appealing, and effective. That is exactly what Exercise.com delivers to its clients.
Jimmy Myers
Owner/Trainer, Relentless Sports Performance

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Is opening a gym profitable right away?

Opening a gym is not typically profitable right away. Like many businesses, it requires a significant initial investment. This can include costs for leasing or buying a space, renovating the space to fit the needs of a gym, purchasing equipment, hiring staff, and marketing to attract members. Once the gym is open, there are recurring costs like rent, utilities, employee salaries, and equipment maintenance. Depending on the location, competition, and effectiveness of marketing strategies, it may take months or even years for a gym to become profitable.

Read More:

Is a gym business profitable everywhere?

The profitability of a gym business varies based on several factors, and it’s not guaranteed to be profitable everywhere. Location is a critical factor; for instance, a gym in a densely populated urban area might see more foot traffic than one in a rural setting. However, the competition might be stiffer in urban settings. The target demographic, local economic conditions, cultural attitudes towards fitness, and the specific services offered by the gym also play significant roles. In some cultures or regions, niche fitness offerings like yoga studios or CrossFit boxes might be more popular than traditional gyms. Thorough market research, understanding the local demographics, and having a solid business plan are crucial before opening a gym in any location.

Read More: Best Locations for Gyms

How profitable are gyms with multiple locations?

Gyms with multiple locations often have the potential to be more profitable than single-location gyms, but this profitability is contingent on various factors.

  1. Economies of Scale: With multiple locations, gym owners can often negotiate better deals with suppliers, reduce per-unit costs, and streamline administrative processes, leading to reduced operational costs.
  2. Brand Recognition: Having multiple locations can enhance brand visibility and recognition, making marketing and advertising efforts more effective.
  3. Diversified Revenue Streams: Multiple locations mean diversified revenue streams. If one location underperforms due to local factors (like a competitor opening nearby or a temporary closure), the overall business can still remain stable if the other locations perform well.
  4. Shared Resources: Multi-location gyms can share resources, like trainers, equipment, or marketing campaigns, which can result in cost savings.
  5. Membership Flexibility: Offering members access to multiple locations can be an attractive selling point, potentially drawing in more clientele.

However, there are challenges as well:

  1. Increased Overhead: While some costs might go down per unit or location, absolute overhead costs will increase simply because there are more facilities to maintain.
  2. Management Complexity: Managing multiple locations requires more robust systems, better communication, and often a larger administrative team.
  3. Variable Performance: Not all locations will perform at the same level. Some may be more profitable than others due to differences in local demographics, competition, and other factors.
  4. Risk of Overexpansion: Growing too fast without a stable foundation can lead to operational inefficiencies and financial strain.

While gyms with multiple locations have the potential for greater profitability, the actual profitability hinges on efficient management, market research, strategic location selection, and the ability to leverage the advantages of having multiple outlets while mitigating the associated challenges.

Read More:

How much is the average fitness club revenue?

The average revenue for a fitness club can vary widely based on its size, location, membership fees, and the range of services it offers. In the U.S., for instance, smaller gyms might earn between $300,000 to $600,000 annually, while larger establishments in prime locations, especially those that offer premium services, can see revenues exceeding $2 million or more per year. However, revenue doesn’t equate to profit, as gyms have substantial operating costs. It’s essential to consider expenses such as rent, staff salaries, equipment maintenance, marketing, and other operational costs when evaluating the potential profitability of a gym.

What factors contribute to the profitability of a gym?

Profitability is influenced by factors such as membership fees, additional revenue streams, location, target audience, and competition. Efficient management, cost control, and effective marketing strategies can also play a significant role in determining the success of a gym.

Read More: How to Hire Gym Staff and Build an A+ Team

How much does it cost to open a gym?

The cost to open a gym can range from $130,700 to $205,000 for the first year. This includes leasing a space, purchasing high-quality gym equipment, renovation and construction, both online and offline marketing, as well as ongoing operational expenses like employee wages, utilities, maintenance, and insurance.

Read More: How much does it cost to open a gym?

How long does it typically take for a gym to become profitable?

The time it takes for a gym to become profitable can vary widely, but on average, it can take anywhere from 1 to 3 years. Factors such as initial investment, ongoing expenses, and the success of marketing efforts can impact the time it takes to reach profitability.

What are the average profit margins for a gym, and how do they compare to other industries?

The average profit margin for a gym can range from 10% to 30%, depending on factors like size, location, and services offered. This is comparable to or even higher than some other industries, particularly when a gym effectively manages its expenses and optimizes revenue streams.

What strategies can I implement to maximize the profitability of my gym?

To maximize profitability, focus on attracting and retaining members, optimizing membership pricing, and offering additional revenue-generating services such as personal training, group classes, and retail sales. Implement cost-saving measures, maintain efficient operations, and regularly evaluate your marketing strategies to ensure their effectiveness.

How can I increase gym membership sales?

A strong marketing strategy, effective gym prospect lead generation, offering competitive pricing and promotions, and providing a positive member experience can help increase gym membership sales. Leveraging the features of a comprehensive gym management software like Exercise.com, such as lead tracking and automated follow-ups, can also contribute to driving membership sales.

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How can I optimize gym revenue streams?

Optimizing gym revenue streams involves diversifying offerings beyond memberships, such as personal training sessions, group classes, merchandise sales, and online training programs. Utilizing a gym management software like Exercise.com can help manage and track revenue from different streams, enabling effective financial management and strategic decision-making.

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How can I improve member retention rates?

Member retention is crucial for long-term gym profitability. Building strong relationships with members through personalized experiences, exceptional customer service, offering engaging and varied workout programs, and implementing effective member communication strategies can help improve retention rates. Gym management software, like Exercise.com, can aid in automating member communications, tracking member activity, and providing a personalized experience.

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How can I manage gym expenses effectively?

Managing gym expenses effectively involves identifying areas of cost optimization, such as energy usage, inventory management, and staff scheduling. Utilizing a gym management software with robust reporting and analytics capabilities, like Exercise.com, can help track expenses, analyze financial data, and identify opportunities for cost savings and operational efficiency.

How can I leverage technology to enhance gym profitability?

Leveraging technology is essential for enhancing gym profitability. Implementing a comprehensive gym management software solution like Exercise.com can streamline business operations, automate administrative tasks, improve member engagement, and provide valuable insights through data analytics. By embracing technology and utilizing the right tools, gym owners can drive efficiency, increase revenue, and ultimately enhance profitability.

Read More:

How can I effectively track and manage the financial performance of my gym?

Utilize accounting software or hire a professional accountant to monitor your gym’s finances, including revenue, expenses, and cash flow. Regularly review your financial reports to evaluate profitability and make data-driven decisions to optimize your gym’s operations and marketing strategies. Choosing the best accounting software for gyms will also help you streamline financial operations.

What role does member retention play in the profitability of a gym?

Member retention is crucial for gym profitability, as it is generally more cost-effective to retain existing members than to acquire new ones. High member retention rates contribute to a stable revenue stream, allowing for better financial planning and more predictable cash flow.

How are gyms profitable?

Gyms can be profitable through a combination of factors. Solid marketing strategies help attract a steady stream of new members, while good location ensures accessibility and visibility. Providing exceptional customer service fosters loyalty and positive word-of-mouth referrals. Strong processes and efficient operations optimize resources and reduce costs. A robust gym management software solution, like Exercise.com, plays a critical role in streamlining operations, automating tasks, managing memberships, scheduling classes, and tracking progress. This comprehensive tooling allows gyms to focus on delivering an exceptional fitness experience while optimizing revenue streams and maximizing profitability.

Are there any additional revenue streams to consider for increasing gym profitability?

Consider offering ancillary services such as personal training, group fitness classes, workshops, or specialized programs. Expanding into retail sales of fitness apparel, supplements, or equipment can also provide additional revenue. Partnering with local businesses for cross-promotions or hosting events may create further opportunities to boost your gym’s profitability.

If you want to join the many gym owners utilizing the best gym management software to open a gym and then run and grow their gym on the Exercise.com platform, get a demo to see how you can start improving your gym profit margins today.

AMPD Golf Performance
“Working with Exercise.com and their team has been an amazing experience and a dream come true in terms of accomplishing a vision! Their workout technology has helped us effectively engage our community, and I highly recommend Exercise.com to grow your business!”
Andrew Banner
Co-Founder, AMPD Golf Performance

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Tyler Spraul is the director of UX and the head trainer for Exercise.com. He has his Bachelor of Science degree in pre-medicine and is an NSCA-Certified Strength and Conditioning SpecialistĀ® (CSCSĀ®). He is a former All-American soccer player and still coaches soccer today. In his free time, he enjoys reading, learning, and living the dad life.
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