Buying a gym business can be a great investment decision, but there’s a lot that can go wrong if you don’t follow all the steps in this ultimate guide on how to buy a gym business. From due diligence to market research to gym staffing and training, there can be a lot to wrap your head around. Here’s everything you need to know about how to buy a gym.
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So, first of all, you should know just how profitable is owning a gym exactly (potentially, very profitable, but again, not always). And you, being an astute business operator, have decided that all the excitement (and headaches) of learning how to open a gym is someone else’s game, because you want to buy an already existing (and profitable!) gym business.
Identifying potential gym businesses to purchase is often the best place to start. Each gym is unique, with unique factors related to the gym customer base, competitive positioning, and market demographics.
To find gyms for sale online, visit the following:
Is there a similar fitness studio concept nearby? If so, how profitable is it? You can show up and find out! Take a class. Sit in the parking lot and count cars.
Is the closest CrossFit box over a 30 minute drive away from your desired location? Are there any local Facebook workout groups or boot camps that meet in local parks? If you work with youth athletes, are there schools close by? How many youth sports camps are in the same location? Youth sports leagues? Other rec facilities? You get the idea.
Yes, you can purchase market research, pay a consultant, and the like, but don’t discount what some real estate entrepreneurs call getting a feel for the place, walking it with your own two feet, and seeing the location with your own eyes.
This may seem too macro if you’ve just been walking around the neighborhood of a promising gym to buy, but before proceeding, it may behoove you to have a pulse on industry trends.
With the rise of online personal training, distance training, and other forms of hybrid fitness businesses offering both in-person and remote training, ask yourself if there is opportunity or caution for this particular gym business. Can you add on an online component?
Maybe other trends related to class types, programming choices, pricing, and other factors place you in a position to implement key changes that will quickly enhance profitability.
Conversely, you may be leery of buying a gym concept that is heavily fad-driven, as the headwinds you face with declining consumer interest will be too much to overcome in later years.
Choose a gym concept that will have staying power. The fitness studio TAM is enormous; there are plenty of options for fitness studio concepts that won’t go the way of the infamous Shake Weight.
Okay, so you’ve found the market you are interested in to buy a gym, you’ve identified a gym to buy that appears promising, the gym owner is open to entertaining an offer, well… what do you do next?
Here are the key steps to take for due diligence when buying a gym business. One big tip: enlist the help of a professional advisor. This means attorney, CPA, experienced business broker, a capital partner, etc.
Most likely you will need some form of financing to buy a gym. Sure, sometimes if you buy a distressed gym, or a very early stage sub scale gym business, or maybe you simply have the cash, then that could be the case, but generally speaking, you will need a loan to buy a gym.
Options for financing a gym business purchase include:
No matter which option you choose, be sure you understand the terms and requirements of financing options, and seek professional guidance from a qualified financial advisor.
Your attorney and/or business broker will help you navigate the following steps:
#1 Negotiate the Purchase Agreement
#2 Conduct the Closing Process
#3 Handle the Transfer of Ownership and Assets
Building a strong management team, developing a marketing strategy, implementing operational best practices, and continually monitoring and analyzing key gym performance metrics are all key pillars to gym success.
Buying a gym is hard work, and so is running it, but we believe that “team work makes the dream work” as they say (one of those corny, but oh-so-true statements – ever been on an dysfunctional team? Yeah… exactly). Having the right gym software is an important tool to accomplish your gym growth goals. We help gym owners every day. Reach out for a demo and see how we can help you.