Opening a new gym of your own is both exciting and a little intimidating. Not only do you need to pick a location and choose your equipment, you also need to get basics like signage, certifications, and gym management software. You may need to hire and train employees, as well as provide them with uniforms. In addition, don’t forget your tax identification number, business license, liability insurance, and other government requirements. Considering all this, what is the cost of starting a gym?
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What is the cost of starting a gym?
According to Entrepreneur.com, it costs $10,000-$50,000 to open a new gym. However, things quickly get complicated from there. That amount may be enough for a small fitness venture, such as a personal training business, yoga studio, or CrossFit box, but if you’re dreaming of a large commercial gym, be prepared to spend more — a lot more. For example, Anytime Fitness lists the initial investment for its franchisees as anywhere from $98,430-$523,824.
How To Cover Startup Gym Costs
If you don’t have $523,824 or even $10,000, that doesn’t necessarily mean owning a gym is out of your reach. New businesses may be able to secure a loan from the Small Business Administration. Such loans will generally be easier to obtain and offer lower interest rates. Alternatively, you could apply for a bank loan or line of credit, but the requirements for qualification will be much higher.
If you decide to borrow money to fund your new gym, be aware that you will still need to put down some cash of your own. The SBA will expect a 10-20 percent down payment on your loan, while banks may ask for up to 30 percent down.
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What if I want to open a gym with no money?
If you’re still determined to open a gym without spending a penny, you could enter a limited partnership. In this type of arrangement, one partner invests all the money but does not help actively manage the venture. The other partner is the “sweat equity” partner; they do not contribute financially, but instead, do the day-to-day work of running the business.
If you choose this method, know what you’re getting into. To help protect both partners, you will want to have a written agreement in place before your gym opens. This agreement should clearly spell out how the business’ equity, liability, and assets are distributed.
The Bottom Line: How much money do you need to start a gym?
Unless you have a lot of experience in business or finance, a small $10,000-$50,000 gym may be the most realistic course of action. However, the good news is that, even if you don’t have that much money, you still have options. Explore various financing methods, and choose the one that works best for you.
And, if you want to make sure your new gym turns a profit quickly, Exercise.com can help. Book a demo to learn more.