To be able to pay yourself well as a gym owner, you need to understand that the industry has potential for several gym revenue streams, as it is getting broader day-by-day. To maximize revenue, you will need to have more than a stream of revenue for your gym. A profitable revenue stream is one that can cover all costs associated with it and still have a 25% and above profit margin. Also, it should be able to contribute up to 15% of the annual income of the gym. In order to remain profitable, here are five revenue streams that are must-haves in your gym business.
1. Membership Sales.
This is the most obvious and important revenue stream a gym could have as it is the core of the gym business. The majority of a new gym's revenue comes from membership sales as new members are usually the first customers of the business. This revenue stream offers a fairly moderate profit margin which is not always easy to maintain.
Acquiring new members as well as retaining existing members is important when your sole revenue comes from membership sales. When focusing on membership sales, you have a few options to increase gym revenue. Acquire more members. Retain a higher percentage of your existing members. Raise your membership prices. These are the only levers that you can use to increase revenue from membership sales.
The first would require you to put more time, effort and resources into advertising and marketing campaigns to reach potential members. Increasing your membership prices might cost you some members especially if you are not adding more value to the increased fee.
Think of membership sales as the foundation of your total revenue. But having membership sales as the only or major source of income is not enough as there are times of the year when acquiring new members dwindle. So, additional revenue streams are necessary.
2. Personal Training.
This is a lucrative aspect of owning a gym and driving gym revenue. It involves offering personalized training and charging more than normal membership dues. Some gyms have reported that they generate up to 30% of their yearly revenue from personal training. Personal training could be at the gym or at a client's house depending on your availability and willingness to offer home coaching.
With personal training, a member gets individual attention from the trainer. This could mean reaching goals faster as well developing a stronger member-trainer relationship. It has a higher price point, since it comes with extra perks a member would not enjoy during normal group trainings. This means extra income for both the gym owner and the employees. You could offer personal training as one on one sessions, small group sessions, consultations, or home services. Advancements in technology have broadened the ways personal training can be delivered.
3. Events And Challenges.
You could organize events, seminars, workshops and challenges both in-house and outside the gym. This income stream does not have to involve fitness exercises only but could also encompass other health and wellness topics. For example, you could organize an event targeted towards a healthy diet.
This could be in the form of a "90-Day No Junk Challenge" to encourage a healthy eating lifestyle. Running a variety of challenges is great because members can invite their friends, family, and colleages to the challenge with them. It's a great way to generate new leads. This kind of challenge should have a physical kick-off event where you can earn extra revenue from ticket sales.
You could have interested participants in your gym's events and programs sign up to gain access into the program. If you are able to deliver premium service that works for them, they will sign up when next you run an event or even sign up for your gym. Running these events regularly between 4-6 times in a year could help the gym acquire an average of 10% membership signups with a potential of driving revenue up by 25%.
4. Fitness Product And Accessory Sales.
One of the most common revenue streams is sales of fitness products and accessories. Normally, when a new member signs up with a gym, they want to purchase gym apparel, footwear and some basic items to kickstart their fitness journey. You could offer these products at your gym so you are not only getting revenue from their signups but also some profit from the sales of these items.
Additionally, some gym members would want to purchase some small gym equipment for their home workout routines like dumbbells, weights, resistance bands, squat balls, etc. Having these products available for purchase at the gym can bring in some extra cash. Selling fitness products can also be a way to generate new membership sales. Walk-in customers who initially came to buy some products can convert into gym members.
5. Online Sales.
As the world keeps evolving, the internet has become a marketplace where anyone can sell any product. As a gym owner, consider blending into this trend and provide your gym with an online platform to be able to reach more audience and also earn extra revenue.
You could start selling your gym's branded products online to a global audience once you can come up with an effective marketing strategy and a credible company image that can be trusted. This is not restricted to physical products as you could also monetize your knowledge as a fitness trainer or nutritional expert.
You could sell diet plans that work for people dealing with weight loss or produce home workout videos and have people sign up with a fee for access to these videos. However, you would need to have an established online and social media presence to be able to make tangible revenue through this stream.
Having multiple gym revenue streams is important as it keeps you in business for a long time because you do not have to depend on a source to keep the business running. With these once streams and many more, your gym business is on a right track to success.