Operations

How Much Does Opening a Gym Cost?

How much does starting a gym cost? This comprehensive guide breaks down the expenses and revenue opportunities involved in starting a fitness business.

Monica Hilton
August 2, 2023
TL;DR
How much does starting a gym cost? This comprehensive guide breaks down the expenses and revenue opportunities involved in starting a fitness business.

You’re up before dawn, preparing to teach the first class of the day in your brand-new gym. You’re surrounded by people with all kinds of fitness goals. You enjoy motivating them and connecting them to others with like-minded goals. If this sounds like the dream you’ve been envisioning, let’s talk about what opening a gym takes.

Although it’s not an easy undertaking, it can be extremely rewarding with the right amount of effort. The motivation to help others is often the biggest driving factor for gym entrepreneurs. That mental fulfillment will certainly help you maintain the focus, clarity and dedication to keep going if times get rough.

Cost of opening a gym
By researching the costs of opening a gym, you can determine if it’s a path you want to pursue!

PushPress is here to help! We’ve put together is a comprehensive list of the typical costs associated with opening a gym. For reference, we used a 3,000-5,000 square foot space in the United States as our template, so adjust numbers accordingly for your own gym.

Starting a Gym? The PushPress Gym Startup Guide offers concise, practical advice and process-oriented steps. This will help you open and grow a thriving and successful gym that your community will love.

The Costs of Opening a Gym.

1. Facility Expenses.

Lease Costs.

Commercial lease rates are often expressed as a yearly cost-per-square-foot. They vary widely by location.

For example, in rural areas or smaller towns, you might pay $10-15 per square foot per year. On the other hand, in large, metropolitan areas like New York City or San Francisco, costs could easily be $50-100 per square foot or more per year. So depending on location for a 3,000 to 5,000 square foot gym, the annual lease could range from $30,000 to $500,000 or more.

Purchase Costs.

Similarly, the cost to buy commercial property can range from $50 per square foot in low-cost areas up to $1,000 or more per square foot in the most expensive cities. So, purchasing a 3,000 to 5,000 square foot facility might cost anywhere from $150,000 to $5 million or more.

Remember, these are very rough estimates and the actual costs will depend on a variety of factors, including the specific location of the facility, the condition of the building, market conditions and more.

It's best to consult with a real estate professional or a business advisor who understands the current market conditions. He or she can help you make a more accurate estimate based on your specific situation and plans.

In addition, remember to factor in renovation costs (if needed) and monthly utilities fees. When researching locations, ask the landlord for the average utility fees (e.g. lighting, heat, water) from previous tenants. And ask about budget plan options so you pay the same price each month.

2. Gym Equipment.

Gym equipment costs can vary widely depending on the type of gym you plan to open. Here are some typical expenses associated with gym equipment:

  • Cardio Equipment: Treadmills, elliptical machines, stationary bikes, rowing machines, and stair climbers. These can range anywhere from $1,000 to $5,000 per piece for commercial-grade equipment.
  • Strength Training Equipment: This list includes dumbbells, barbells, weight plates, weight machines, squat racks, benches and kettlebells. You may spend anywhere from a few hundred to several thousand dollars per piece in this category.
  • Functional Training Equipment: Things like medicine balls, stability balls, resistance bands, yoga mats, foam rollers and other smaller items. These are usually less expensive but you'll need a larger quantity of them.
  • Specialty Equipment: Depending on the focus of your gym, you might have other specialty equipment like Pilates reformers, boxing bags or spin bikes.
Gym equipment expenses for boutique gyms
Gym equipment costs will vary based on the type of services your fitness business offers.

As an estimate, for a small boutique gym, you might spend anywhere from $30,000 to $100,000 or more on initial equipment purchases. Here's a rough breakdown:

  • Cardio Equipment: 5 pieces @ $3,000 each = $15,000
  • Strength Equipment: 10 pieces @ $2,000 each = $20,000
  • Functional Training/Small Items: $5,000
  • Specialty Equipment: 5 pieces @ $2,000 each = $10,000

Total: $50,000

Keep in mind that these are rough estimates. Your costs will vary depending on your gym’s specific layout, the type of equipment you choose and where you source your equipment from. Depending on the way you optimize gym space, you may be able to decrease expenses here.

Also, remember to factor in costs for things like gym flooring, mirrors and sound systems.

3. Insurance Costs for Opening a Gym.

The cost of insuring a gym can vary widely based on numerous factors including the size of the gym, location, number of employees, types of services offered and other risk factors. Here are some general estimates for common types of insurance that a gym might need:

  • General Liability Insurance: This insurance protects your business from claims involving bodily injury or property damage. For small gyms, annual premiums could range from $300 to $1,000 per year.
  • Professional Liability Insurance: This type of insurance protects your business from claims relating to the services you provide, such as a client getting injured due to improper instruction. Annual premiums for professional liability insurance typically range from $1,000 to $2,000.
  • Property Insurance: This covers damage to your property and the contents within it, including your gym equipment. The cost of this insurance can vary greatly depending on the value of your property and equipment, but for a small gym, it might be in the range of $2,000 to $5,000 per year.
  • Workers' Compensation Insurance: If you have employees, you'll likely need workers' compensation insurance. The cost for this insurance varies by state and depends on factors like the number of employees and the types of roles they have, but it could easily be $1,000 to $2,500 per year for a small gym.

Adding all these together, a boutique gym might pay roughly $4,300 to $10,500 per year for insurance, although the actual cost could be lower or higher based on the factors mentioned above.

It's a good idea to speak with an insurance broker or agent who is familiar with the fitness industry to get an accurate quote based on your specific business details. They can help you understand the types of insurance you need and how much coverage is appropriate for your business.

4. Marketing and Branding.

Marketing and branding aren't just expenses; they're investments in your business. Effective marketing can help attract and retain gym members, which will drive revenue. It's crucial to have a well-thought-out marketing plan that aligns with your business goals and budget.

These costs can vary significantly depending on your strategies, target market and location. Here are some of the areas to consider:

  • Branding: This includes developing a logo, color scheme and overall brand identity. Depending on whether you do it yourself or hire help, this could range from a few hundred dollars to more than $10,000.
  • Website: Designing a professional website can cost anywhere from $2,000 to $10,000 or more, depending on its complexity and the rates of the developer. SEO services can range from $500 to $5,000 per month, depending on the level of service and expertise required. (But did you know that an effective, SEO-optimized website is included with PushPress Grow?)
  • Social Media Marketing: Many businesses handle social media marketing in-house, which makes it relatively low cost. If you decide to use paid ads on platforms like Facebook, Instagram, or Google, the cost will depend on your budget. A typical small business might spend anywhere from $1,000 to $10,000 per month on paid ads.
  • Local Advertising: This could include print ads, radio spots, outdoor signage or direct mail. Costs here can vary widely, from a few hundred to several thousand dollars per month.
  • PR & Launch Event: You might consider hiring a PR firm or hosting a launch event to generate initial buzz. This could cost anywhere from $1,000 to $10,000 or more.

Overall, a smaller fitness business might spend anywhere from $5,000 to $50,000 on an effective gym marketing plan, followed by an ongoing monthly spend.

Gym marketing and branding expenses
Creating a gym marketing strategy will help with lead generation and sales conversion.

5. Software and Technology.

Software and technology costs are a vital part of running a gym. Here are some options to consider:

  • Gym Management Software: These comprehensive platforms handle member management, class scheduling, billing, email marketing and members’ apps. These typically have a monthly fee of anywhere from $50-$200 that varies based on the number of gym members. (Did you know PushPress offers a FREE version to help you as you're opening a gym?!)
  • Website Hosting: Gym website hosting could cost from $10-$50/month or more, depending on the provider and the level of service you need.
  • Email Marketing Software: Platforms like MailChimp or Constant Contact typically charge based on the number of contacts you have. Costs generally range from $20-$200/month.
  • Payment Processing: If you accept credit card payments, you'll have to pay processing fees. This is typically a percentage of each transaction, often around 2-3%.
  • Wi-Fi and Internet Services: This cost will depend on your location and the level of service needed, likely around $50-$200/month.
  • Music and TV Subscriptions: If you plan to play music, you'll probably need a commercial license. The cost can range from $20-$100/month.
  • Security System: Security systems and cameras can range from a one-time cost of a few hundred dollars for a simple system, to a monthly fee of $50 or more for a monitored system.
  • Hardware: Things like computers, check-in tablets, TVs and a sound system are typically one-time purchases. They generally range from a few hundred to a few thousand dollars.

These are rough estimates. Your actual costs will depend on your specific gym size needs and providers. Remember, these tools are investments that can help your gym operate more efficiently, provide a better member experience and increase gym revenue.

Pro Tip: Get Your Gym Management Software for Free!

We get it. As gym owners ourselves, we know that the initial costs of opening a gym can be a bit overwhelming. That’s why we created PushPress Free, to give you a FREE option for managing your gym as you get started. Register today and let us help you build your dream!

6. Payroll.

When you first open a gym, your “team” might consist of you, you and well... you. But as you grow and scale, payroll will likely become one of your biggest monthly expenses. Here are the categories to consider when projecting payroll numbers:

Hiring coaches will determine payroll projections
Choose between hiring full-time coaches or part-time to determine your payroll projections.
  • Gym Owner: Determining your average income can be difficult, as it depends on a variety of factors. These will include your location, size, membership fees, overhead costs and number of clients.
  • Part-Time Coaches: In order to create a ballpark estimate for your coaching payroll, multiply the hourly (or per-class) rate you intend to pay your coaches by the number of classes your gym offers per week. If your coaches help with other tasks like cleaning or admin, factor in those rates as well.
  • Full-Time Coaches or Other Staff: If you plan on hiring full-time coaches or a leadership team, you’ll likely have them on a monthly salary. This actually makes it easier to calculate projections, as each team member will have a set monthly rate.
  • Cleaning and Maintenance: To keep your gym in great condition, you'll need consistent cleaning and maintenance. Consider the amount of work needed and your budget. This will help you decide whether to have a cleaning/maintenance crew as employees or contractors.

7. Ancillary Expenses.

It's always a good idea to factor in a buffer for unexpected costs and ancillary expenses.

These costs will vary from gym to gym so ask yourself the following questions. How will you provide water for your members (purification machine, water fountain, bottles)? Depending on the number of members, how much toilet paper and soap will you need? Will you pick up those supplies yourself or get them delivered through Amazon Prime? What about locker room amenities? Will you need cleaning supplies or will your cleaning company provide them? Are there any other supplies you’ll need?

In Summary: The Risks and Rewards of Opening a Gym

Being a gym owner can be both overwhelming and incredibly rewarding at the same time. When you’re considering opening a gym, be analytical and practical. Choose location, size, demographic and equipment wisely. Control operating expenses while creating revenue opportunities.

Managing operations and expenses are an integral part of opening a gym. But don’t forget the “human” side of running a business. Here are a few tips and tricks to keep in mind as you get started:

  • Decide what sets your gym apart from the competition. Promote that.
  • Eliminate competition by providing top-notch services that no one else can match.
  • Negotiate when you can get a better deal. But DO NOT negotiate your values.
  • You can trade membership in exchange for services, but do not devalue it.
  • Do not entrust your website development to a member of your family.
  • Take the time to get to know your members. They have chosen to be your clients.
  • Show gratitude for those who have helped you or your company.
  • Be prepared for emergencies. And set aside some cash for the rainy days.
  • Recognize that their lives influence your members' behavior in the gym and outside of the gym.
  • No matter how appealing a “magic pill” for success seems, it does not exist.

Your gym's earning potential is only limited by your business decisions and your willingness to put in the effort. It’s time to get to work.

Monica Hilton

Monica is our Content Manager extraordinaire for PushPress. She also owns her gym in Indianapolis, Together We Rise CrossFit, which she opened in 2014 and previously worked in IndyCar racing.

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