Starting a Gym

The How-To Guide for Doing Market Research

Market research is an integral part of starting a gym. Here are eight key things to consider when doing research for your fitness business.

For most new gym owners, market research gets lost in the shuffle of starting a gym.

There’s so much to do as you prepare to open your doors and truthfully, market research can be somewhat of a foreign concept. Like many others in your shoes, you’re not sure how to start or what exactly to research.

So if you’re like a lot of gym owners, you skip this important step and open your doors. You set your price at $150 per month “because that’s what everyone else seems to be charging.” You estimate that within a year, you’ll have 100 members and business will be rolling.

Market research is imperative for starting a gym
Market research is an imperative part of starting a gym.

As gym owners ourselves, we know that without market research, it doesn’t normally play out the way we expected. We don’t want to reach the point of being overworked and underpaid. And this happens when we’re stuck at the 60-member mark, charging too little and trying to figure out a new plan.

Changing that trajectory starts at the beginning by doing the proper market research when starting a gym. Let’s look at how.

Eight Market Factors In Starting A Gym:

1. Market Rates.

For any business, researching market rates should be a priority when starting a gym and along the way. And while some owners use this research in setting gym pricing, others just kind of take a shot in the dark.

Sometimes they choose a rate they think others would pay for their services. Other times, they set a rate based on that of other gyms, who may even be located in a completely different city or state.

Make sure to look at all of your competition, not just your niche. For example, CrossFit gym owners should monitor rates for local yoga and cycling studios, MMA gyms, franchises and personal training gyms. This is important because your prospective members will probably have a number in their head about what they think fitness should cost. If you’re in tune with the rates of your competitors, you’ll be confident and prepared as you answer their questions.

Further, most gyms neglect to redo this research annually. Since numbers can fluctuate in any market, especially in a time of inflation, monitoring consistently is smart. For example, you might be the most expensive gym in the city at one point. But if two years go by and you’re not following trends, you might find you’re charging 15 percent less than three nearby gyms.

2. Median Household Income.

Another important piece of market research in starting a gym is determining the median household income. Other key numbers include median housing costs and rental costs.

This helps on multiple levels. First, it will help you determine what kinds of services and rates your market will be able to pay. For instance, if you’re in an affluent area, you might be more likely to be able to sell high-ticket gym services. Or you could offer the option for upfront payments, collecting six or twelve months in advance.

Second, knowing these numbers will allow you to assess what to pay your coaches. When it comes to full-time coaches, your goal should be for them to have a sustainable career at your gym and live comfortably in your city. This then comes full circle in factoring into what you need to charge your clients.

Paying gym coaches fair market value

3. Beyond Average Income.

Though determining average income can be helpful, TwoBrain Business founder Chris Cooper says there’s an even more important number.

Two Brain provides business mentorship for gym owners and has helped more than 2,000 entrepreneurs earn more profit and freedom.

Cooper says what’s even more important than average income is determining what the top 10 to 20 percent of people make in your market. Why?

“Because it’s these people who will be your first market for who your service will appeal to,” he says.

DID YOU KNOW: The Gym Startup Guide is designed to help with every stage of running your fitness business. Download your copy today

4. Census Data.

Determining median income and adjusted gross income in your market is actually just a few clicks away. According to Stuart Brauer, owner of WTF Gym Talk, the easiest place to turn to is the most recent Census data on government websites.

WTF Gym Talk is an all-around resource for those looking to grow their business. He helps gym owners work on their business instead of just in it.

Brauer says Census data can also go a long way in helping you determine other important research about your market. Things such as the general demographic of your city should affect your business decisions.

For example, are you in a city with established families that stay for years? Or a transient city full of college students or military? These two markets will have different strategies when it comes to pricing, marketing, business development and more.

5. Primary Employers.

Cooper echoes this idea for starting a gym, recommending research into the the primary employers in your market.

Is there a plethora of new businesses that might be gone in three to five years? In this case, you might risk losing clients when people move away. Or are there a variety of established businesses with career employees? When people have planted roots, it’s easier to develop relationships and drive gym member retention.

6. Competition In Your Niche Offering.

Hopefully, you’re crystal clear about your niche offering when starting a gym. These days, it’s not enough to offer “fitness” and trying to cater to everyone isn’t the best strategy.

Determine fitness niche and specific gym services

Once you’ve determined your niche, research your competition in the market. Determine the businesses that offer exactly what you do, and those that offer something similar. Then find out what their current rates are.

Knowing these numbers can help you set your pricing, and can also be incredibly valuable in your sales process.

For example, a prospect might expresses concern about your price, comparing it to what they’d be paying for a globo gym. By knowing the market, you can explain how your rates compare to other coaching services in the area.

Differentiating coaching in a class format rather than a facilities to “do your own thing” helps them compare apples to apples. In addition, your rates are probably in the same ballpark as the yoga studio or franchise down the street, making comparisons fair and accurate.

7. Beyond Other Gyms.

One important caveat from Cooper is that setting your pricing based solely on other gyms can potentially be a mistake.

Simply because he says, “A lot of gyms are undercharging.”

Instead, he suggests looking at service prices from other local businesses besides just gyms. As an example, Cooper says to find out what massage therapists in your area are charging for a 60-minute massage. Then use that as your personal training rate and adjust accordingly for semi-private training, he explained.

Taking it one step further, double your personal training rate to determine your group training (class) rate, says Cooper. This will help you figure out how much to charge monthly for membership when starting a gym.

Help prospects compare gym competition services and pricing
Market research helps gym owners compare competitor’s services and pricing.

8. Connection With Other Gym Owners.

Audrey Patterson, a long-time gym mentor from Madlab Business, offered an interesting perspective on market research.

“Other gyms aren’t your competition,” Patterson said. “The couch is.”

Madlab empowers coaches to be professionals and teaches business owners how to provide them with the chance to do so. The goal is to create an ethical and sustainable gym.

Patterson suggests taking the time to pick up the phone and call other gym owners when you’re looking for information.

“Tell then who you are,” she says. “Let them know you’re planning on setting or adjusting your rates to be higher, rather than undercutting. Ask for their rates, and definitely share you plan.”

Patterson notes that this can go a long way in developing a useful business relationship. You may even end up cross-referring clients who might be a better fit for the other’s facility.

Pro Tip: Looking for more help with starting your gym? The PushPress team is here for you. Download the Gym Startup Guide today

In Summary: Start Stronger With Market Research.

Think of market research like the warmup for your workout. Staring a gym without the proper research is like starting a workout with a proper warmup.

Once you’ve determined your specific services and niche, research your competition and the area. From comparable rates to average household data, each piece of the puzzle contributes to the success of your fitness business for the long run.

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