Prepare a Gym Business Plan
The article tells you how to write a gym business plan, and also the next step – How to start a gym.
Today, the global fitness industry is valued 100 billion us dollar. IHRSA found that from 2013-2017, fitness club membership has increased 120+%.
If you plan to start running a fitness gym business but without experience, suppose you would need to prepare capital by loan or investor. And bank loan manager or potential investor would require a data driven business plan to ensure that you are ready to start the business. No matter materially or spiritually, they want to see that you’ve finished your homework at high score.
Even if the gym does not require external finance resources, a comprehensive business plan could also be a path diagram for long-term development of your gym. It requires well organized and detailed procedure to write the business plan, which could define key factors in association with any successful enterprise.
Gym Business Opening Plan Outline:
Before entering into the details of every section, here below is an outline of major issues should be included within starting a gym business plan:
- Executive Summary
- Introduction of your gym
- Services and products
- Facilities and gym equipment
- Market research and Analysis
- Strategy execution
- Management summary
- Financial Projections
1. EXECUTIVE SUMMARY for your Gym Business Plan
A strong executive summary would be impressive for investors or loans, and if the first few pages aren’t compelling, potential investors or loan officers will have no interest to read on. Thus, it would be awesome to include some persuasive gym business cases in the summary.
Since it acts like the index of the business plan, it is recommend to finalize this section after finishing the rest of the article, so that you can extract the important content and data from the overall plan.
Please answer below questions in the executive summary:
- What is your business model and its strengths?
- What is your market volume? Where you get these key market data?
- Which market demand your gym can fulfill? What membership types will you offer and what will you charge for them?
- Do you have any unique and practical advantage?
- What is the bottom line of income, expenses, sales growth and profit/loss for the 1stthree years?
- How much your gym would require as funding?
2. INTRODUCTION OF YOUR GYM
You should already have a framework outline of your gym, the investor or loan manager may not, so it is necessary to introduce your gym.
- Ownership and investor structure, the legal structure of your gym, is it related to another company? And the company type it belongs to.
- Capital required and equity being returned, estimated ROI for investors and how they quit in future.
- Gym location, traffic, parking, nearby competition, and the environment around.
3. SERVICES AND PRODUCTS
Next, you are required to define your service philosophy, and the workout environment being created.
- How close your business will be intouch of your members?
- Will it bean aura of luxury or a no-frills fitness model?
- Would youprovide a revenue ornon-revenue services?
4. FACILITIES AND GYM EQUIPMENT
If a site or facility has been chosen, please clarify its key advantages and benefits, such as size, accessibility, visibility, build-out possibilities, approx rent, area demographics, to show how you are familiar with your target market. And a map showing the location exactly is highly recommended.
If you are still in the stage of searching facilities, please provide the criteria you’ll use to evaluate potential facilities. In addition, there also need include a detailed description of what the gym will have, like cafe, studios, locker rooms, studios, cafe and/or amenities, and also the overall design aesthetic.
Finally, the gym equipment is the major part of costs, which includes:
Body weight machines
5. MARKET RESEARCH AND ANALYSIS for Gym Business Plan
First of all, understanding the fitness industry trends is so important, we could refer to industry reports researched by IHRSA, who provides data to prove the bright future of fitness industry.
Then, talk about detailed marketing positioning, including the where the local competition comes from, and the demographics of your primary and secondary markets in the specified area. Address the reason ideal customers would be attracted by your fitness club or fitness center according to the research, ie. babysitting service.
The market research and analysis makes you stand out of your competitors, which ensures you business to be successful and will help with messaging once start-up, so bloody time and brain cells would be spent around this info.
6. STRATEGY EXECUTION
- What is your competition advantage? Eg babysitting service, like free coffee or soft drink, or more gym equipment.
- Marketing and sales forecasts
You will outline your marketing and sales strategies on this section, and the sales forecast for the 1st three years.
Below questions might be involved:
- What are thesales forecasts looks like?
- What would you do to make the target customers join your club, absorb as members?
iii. What is your market strategy?
iiii. Do you have any promotion offer plan to support pre-sales and after-sales?
- V. What would you do to retain members?
7. MANAGEMENT SUMMARY
In this section, you can subdivide organize structure, salary and benefits plan.
If you want to manage the fitness company (such as club or center), please provide your personal resume and team member profile in the appendix, and an organize structure chart would be in need. In addition, you also need a declaration of any non-management staff the gym.
Besides the gym equipment and the rent, labor is the biggest expense for most fitness clubs, so salary and benefits structures is super important. Keep in mind, how you structure salary and benefits system will lead to attracting and retaining your team members. In addition, think over whether your business would be profitable or not, in long and short term.
8. FINANCIAL PROJECTIONS
This section will likely be the most head aching part of the plan.
Based on best and worst forecast, you will create cash flow statements, income table and balance sheets for the three coming years.
You would need to provide background by comparing with industry standard and ratios, start-up cost, salary expectations. And debt payment table is also important as well. Take membership and revenue raised service ramp-up, membership churn and staff salary into consideration.
This section comes out to be the last section of your own gym business plan, all supporting docs included:
- Resume ofthe management team
- Job descriptions
- Demographic info
- Road map
- Promotion plan
- Marketing plan
Above all, it would be very complicated to wrap up all issues, even though open a new or small gym business is a so exciting thing. If you want to succeed, spending plenty of time to study and prepare the homework, making a business plan is necessary.
A complete gym business plan will help you assess the viability of your gym project, strength your ideas, set goals and learn how to achieve the goals, attracting capital to launch your gym, and get ready for the long term sustainability.