How to Prepare An Initial Budget For Your Gym
Posted: June 7, 2021 in Chains
World Gym
LOS ANGELES, CA – Budgeting can be one of the hardest, but most crucial, parts of starting a gym. After all, even though your end goal might be sharing your love of fitness, the bottom line is a health club is a business and must be run as such.
The good news is that as a World Gym franchisee, you don’t have to go it alone. Part of the service that World Gym provides is drawing on our extensive experience with new owners just like you,” says World Gym’s Franchise Business Coach Jared Deptula.
Before you dig into the details of your expenses, opening and operating costs and revenue, here are a few high-level considerations to help:
1. Know which items can and should be negotiated, and make sure you do.
Some line items like payroll and insurance are what they are, and you don’t want to skimp on either. “Gym owners should look at payroll not as an expense, but as an investment in having the best club right from the start,” Deptula says.
Those two aside, there are some places you can probably negotiate. Deptula advises getting creative with your rent and equipment leases during this early phase, which can help you keep your expenses down as you build your business when you need to preserve capital and have the lowest expenses possible.
Making a good choice on your real estate will pay off over time, and Deptula recommends working with World Gym’s suppler teams as you evaluate spaces. “They’ll have you covered as you consider different locations or try to decide on size parameters, then give you insight on appropriate cost per square feet.”
In many cases, you can negotiate free rent or equipment leases upfront, particularly when you work with World Gym’s preferred vendors, who understand the unique economics of a health club.
2. Start signing up members today.
Yes, that’s right…long before your doors open. “We recommend at least three months of presale promotions to get people in the door and sell the image of what your club will be,” says Deptula. Not only does that get the cash flowing quicker, but it can help build community and camaraderie from the start and make your grand opening truly “grand.”
Deptula points to World Gym’s expertise in this model of selling a club before it’s a club. They can help create marketing materials, including high-end renderings and floor plans that will offer good insight into what the club will look like, with a visual layout of the equipment and amenities specific to your location.
“Paint the picture through good communication to get your potential members excited to get in the door quickly and early when everything is new and shiny and they have the benefit of being charter members.”
3. Don’t go it alone.
This might be the most important piece of advice related to preparing an initial budget for your gym: Talk to fellow franchise owners and even your lender, who knows the market and its opportunities and pitfalls.
Again, that’s the benefit of working with an established entity like World Gym. “All of us have done this before, and that’s what we’re here for: to get new franchises up and running. Then once they’re ready to roll, we can give advice on the physical layout and help with marketing and presales, and of course, a budget that’s realistic,” says Deptula. “We will set you up for success.”
