COSTS OF STARTING YOUR OWN GYM HEALTH CLUB VS. FRANCHISING
Owning a health club could be a very profitable venture, that is if done correctly. This investment opportunity is ideal for those wishing to have a business that can close to run itself and allow an ideal work life balance. If done correctly, you can have a great business that generates handsome profits without the need for you to be there 24/7. That is unlike normal fast food and restaurant franchises which usually require an owner/operator mentality which may require your presence more than you would like. So, what are the type of costs involved in starting a gym? We have outlined the top expenses you can expect and compared them with the option of franchising.
Creating A Business Plan
In the very early stages, you should create a business plan. This will not only help ensure that you develop a successful business but will also help with financing. Few lenders will provide you the necessary funding for the startup costs, equipment, etc… if you do not have a business that plan that makes sense to them. For those that would like to avoid this all together and minimize their risk of failure, franchising is a great option. The blueprint for success is already provided and in the case of financing, lenders may see this as a less risky investment.
Fees Associated With Incorporating Your Business.
Once you are ready to take the plunge, you will need to incorporate your business with the state. It is recommended to use professionals to assist you with this. You want to make sure that your business is incorporated the best way for ownership and taxation purposes.
Building Your Club’s Website
In this digital age, your website is the core of all your marketing. Creating a good website is key. That being said, it could also be expensive. A good website with a marketing strategy that will you bring members to your health club could on average $5,000. However, a good health club franchise may provide you with your own web page that is aligned with the overall corporate marketing strategy.
Whether you like it or not, attorneys are necessary, especially in the health club business. They will help you protect yourself from lawsuits and without them, you could be out of business faster than you expect. This is why contract and waivers are important. Don’t make the mistake of thinking you can just download document templates online. All it takes is one gym member that finds a loophole in the waiver/contract and the lawsuit begins. If going through a franchise, agreements and waivers may be provided so the savings in attorney fees can be substantial.
The health and fitness industry is susceptible to more dangers than the average business. With so many people that will be going in and out of your facilities daily, and working with potentially dangerous equipment, you need to make sure you have the best insurance. This can be costly, in addition to the time cost involved in finding out the right type of insurance you need. In the case of franchising, you would receive the exact insurance requirement that you would need. In addition you would be entitled to special pricing based on the overall locations that are part of the health club franchise.
Now on to one of the highest expenses, finding and building out the ideal location for your health club. It could take several months or even more than a year for you to find a place, complete the real estate transaction, and build it out to suit your business plan. If you are purchasing a franchise, they could assist you with finding the best location and creating the site plan/buildout.
Knowing which equipment to purchase and negotiating a good deal are extremely important. This is one of the most expensive parts of starting your own gym franchise. Although there are companies that specialize in leasing equipment, you need to make sure that you do not end up paying significantly more than you should. This is another huge advantage of owning a gym Franchise. In this case, there would be existing leasing companies and terms that are generally more competitive than if you were to go in by yourself.
Gym Management Software
Having the right software to track day-to-day expenses, sales, and revenue is an integral part of having a successful gym business. Industry standard software and licensing can be expensive but it is necessary. If franchising, this may already be included and integrated to your location.
Marketing & Advertising
This another vital component of your overall cost involved in owning a health club. You need to know what type of advertising/marketing works and how to apply it. If done incorrectly, you can have a lot of money go down the tube. The health club industry is a very specific industry and you need intel. In the case of franchising, marketing and some form of advertising may be provided. Some provide assistance with website traffic and provide marketing materials,
Don’t be scared by the upfront cost of purchasing a franchise. At the end of the day, it could be less expensive than trying to do it yourself.