So my trainer finally came up w a location that's very hard to turn down. We are thinking a boutique gym w outstanding customer service What are the downsides of the gym business ? Thanks
previous thread about it, churn is the biggest problem, I would think, with liability a strong 2nd. The only way I could think it would be worthwhile would be a high end, membership application only (substantial fee) clientele to weed out the morons and the roid-boys. Easy parking, great architecture, and the best equipment, meaning cherry picking from many manufacturers. If the area supports the demographics, might be worthwile, otherwise just a headache.
It can be done but there is so much price competition from big box gyms that you must be in an area where money doesn't matter to you clients. Hard thing to do.
No matter how great your customer service is, outstanding trainers, best equipment, ect., you constantly have to find new clients. I don't remember what a good retention rate was back in the 90's when I owned clubs, but we were about 50% which was considered great (annually). Club business has gotten much tougher since then. Feel free to PM me to discuss. I was in the business for almost a decade.
I hate to sound like a broken record but look into a crossfit. Very low overhead. Simple bare bones warehouse space with minimal equipment. Small yearly franchise fee, $25 an hour for additional instructors, $100-$200 a month per head. A traditional gym in our area is tough because the market is so fickle. There is little room between the $10 a month gyms and the high end places. Spend a fortune to get a high end site going and the clients flip for the next hot spot.
Is this something you want to do, or is it something your trainer wants you to do? Sounds like his dream, rather than yours... Had a friend whose wife was talked into a hair-dressing salon by her hairdresser. They lost their shirts. It almost ended the marriage as well. At least you won't have those problems.
Respectfully disagree - provided I know enough about crossfit (which I really don't). Isn't the crossfit workout quite difficult? Possibly a good workout for athletes and those who are highly motivated and don't mind working hard (please correct me if I am wrong.......). You will NEVER have a successful club over time if you depend on a clientele that is working their tails off to get/stay in shape - unless you have a niche business working with top athletes, ect. Your turnover will be much greater than even at an average club.
Wellness is a booming business because so many people are overweight and heading for metabolic syndrome. etc. I doubt you could compete with the big box clubs. I also doubt most people are willing to pay a premium just to use your fancy equipment and soft towels. What is intriguing to me is training people in a holistic way, resistance training and nutrition. Problem you need a lot of wealthy committed clients . The reality is most people give up or will not pay enough. Most trainers don't do that well. Harnessing the wellness boom is the key.
That's what I would have thought but after having seen it from the inside for nearly two years I would say that they cater to a niche, cult like crowd. You could run a nice 5,000 square foot box for around 5k a month. If you sold unlimited monthly memberships at $100 a month(the average is $150) you could get 200 members easy. Not to mention the crowd eats up competitions, special classes, merchandise, all for extra cash. If the fad ends your are out very little. The only other way I've seen trainers make bank is the ones in Palm Beach who get a reputation. They get clients to pay them a monthly retainer wether they use their sessions or not. Most of the time they are too busy or too lazy to go. I personally knew a guy. Who made a 100k doing exactly this.
Crossfit is not difficult nor only for athletes . It's a workout that many many women do and get great result . This I have personally witness . Group fitness is the new fad and it attracts majority of women who don't mind to spend money. I'm a trainer plus involved in crossfit so I look at it from different sides. If you offered crossfit plus another "hook" like MMA training or event specific training ( Spartan tough muddier etc) then you could have success . Pm. E and I could send you gym websites for ideas. Traditional gyms are hard especially with large corporate ones( planet fitness, retro fitness ) offering the same product for cheaper ...
Crossfit is intense and difficult. It has a cult-like following that is limited. They offer it at my martial arts gym (krav maga). I don't know anyone who says it is not difficult. Maybe for a top athlete.
Correction, it is intense but my point is it's mainly attended by women so it's doable. Furthermore , you don't need to be in shape to start . Not long ago , a female cousin started . At the time she was 225. Forward 7 months she 180 but thats deceiving because she has lost four dress size. And she's hooked. I've told 7 other girl , only one was former athlete and the rest hated working out . Now all of them are hooked ...
Interesting...I have seen the flip side as well. People injured, people crying with frustration and storming off and not returning, threatening to sue because they did something stupid or ignorant and want to blame the gym/trainers for not telling them things that are beyond obvious, etc., etc. Sure enough, those who take to it, really do take to it. They are almost cult-like in their regularity, their WOD-obsessed facebook posts, their PRs, and their general dedication and obsession with it. It's intense, it works, and if you stay injury free, you will lose fat and gain muscle. It doesn't take much time, either, though going to the gym, gearing up, cooling down, etc., are often not figured in to the time calculations. I wouldn't start a cross-fit gym. If I had a gym already, I might offer it as a program...so long as I could get a huge tyre cheaply. But then, I wouldn't start a gym to begin with. I'd rather do wholesale to all the existing gyms. Nutrition, gear, equipment, etc. I think that would be far more lucrative if you are good at sales, have an eye for good products, and can negotiate good prices/terms with your suppliers.
I too have been looking into a gym type facility. The wife is a free lance trainer and teaches group x at a local gym a few times a week. She uses a pay per use training facility most of the time for her training gigs. The amount paid varies but it averages out to 15 per hour. With a monthly cap of about 500. The guy that has this facility leases about 4k sf and has minimal equipment. Wheel barrows, few tread mills, medicine balls, ropes etc... When we looked into leasing this building a few years ago it was about 1.50 per sf. If you start doing the math on how many hour rentals he needs per month to make rent it is not too bad. His over head is low. The going rate for a trainer of average experience is 70 here in LA. The wife charges more and still has business but you always need new blood as The turnover is ridiculous. I have some numbers at the house broke down into how many people you go thru to get one person to stick and it is Very High. If you want to make it work it seems you need to be at the top of the pyramid. IE the one who leases the facility to the trainers or instructors. You will have better chances of making money and have less people to find. Let the trainers and instructors find the people in the high turnover industry. With this said I am leaning toward renting an area, putting in a group x studio for instructor rental at 30 to 50 per hour pending the time slot chosen, something like TRX for a monthly fee, and having an area for personal training. I figure the more items you offer in one space the better chance you have of making it. The wife would also teach a few of these classes and that would be all money in the bank. A yoga or Pilates class here in LA can easily set you back 20 bucks for a boutique setting. This will allow the instructors to have their following and make money so they will want to keep leasing from you. Ex. They pay me 50 for a prime time slot, they have 10 people at 20 per head and they walk out with 150... If you break this down further each teacher teaches a few classes a week so you can see how few teachers You need to make money. There are about 4 prime time slots per day and about 2 that are close to prime time. Group x requires about 40 sf per person based on room sizes and class loads IMHO
I've watched just a few cross fit workouts online - so apologies if what I've seen is not representative of what most of them are about..... 1. Workout seems quite hard for the average person. Result: After initial excitement people will stop going to the gym. Hard workout = > 90% will quit training within 3 months 2. Who the hell trains their trainers? All that seems to matter is doing many reps quickly - preferably with horrible form and lots of momentum (yeah - let's swing that kettle ball.....). Result: Those who haven't quit within 3 months will hurt themselves in no time. Based on (limited) what I've seen - this is another fad - and a type of workout that simply isn't going to work long term. While member retention is difficult for any club, having to replace your motivated clientele due to injury every 6 - 9 months is simply not economically going to work. Anybody would like to place a bet how many cross fit gyms are still around at the end of 2016??
my gf is big into crossfit. I agree it's a fad, I think some hardcore crossfitters will stick to it but I think the majority of crossfit gyms will be closed within your timeframe. part of the culture of crossfit is "peer pressure motivation", egging people on to keep going and pushing through pain and fatigue. while that has merit to a point, it also means that a lot of people get severely injured doing it. I think that will have a big impact in its long term survivability.
I would recommend finding a crossfit trainer and offering to open them a gym to run. More goes into it of course and it would have to be the right person. But that's how I would do it if someone put a gun to my head and demanded I invest in opening a gym.
The are many injuries and people leave frustrated AT bad or competitive gym. It's all about the "coaches". I wouldn't start crossfit only gym but would offer it. For a long time is thought CF was a fad but I no longer think so because Reebok backs and they have games every year, they creat a community setting at the gym and lastly because people get results.
I'll take that bet!!! What are you putting up? I agree it will one day fade but not that soon. I don't think it's peaked yet. With the Open coming up momentum is still building and with The Reebok marketing machine pushing them it will take more time to fade. It's not hard, it's just that everyone is so weak and out of shape! Grown men who can't do push-ups and pull-ups need to preach about injuries so they don't feel so guilty about sitting on the couch. It works. That's why the established "fitness" industry loves to bash them. Hell, Planet Fitness removed squat racks because they are "too intimidating". http://www.menshealth.com/fitness/planet-fitness-not-gym#. I'm almost two years in and I haven't seen a single injury at my gym. Unless you count the time I dropped a 45lb plate on my toe! I have seen people from ALL walks of life come in and lose insane amounts of weight and get in the best shape of their lives but it doesn't make good youtube fail videos to post the positive things. I asked last night, 250 members at an average of $150 a month. Nice profit.
glad someone chimed in for the positive. even at regular gyms there are injuries. and it does show how many couch potatoes there are.
Don't think it's a fad, but it's a very limited subsection of the population that will embrace the intense WODs of cross-fit. 100 kipping pullups? 7 mile run? That's gonna hurt, no matter how fit you are. Couch potatoes don't stand a chance. Even fit people are at risk of injury and this is not an exaggeration. Just go to crossfit.com and look at the workout of the day and ask yourself if it's feasible for the average fit person. I did the numbers for a gym in San Francisco area. At $100 per month, 250 members will barely allow you to break even after expenses, unless you have really cheap rent and don't employ cleaners, check-in staff, trainers, advertising, insurance, utilities, etc., not to mention the expenses of building out the gym, equipment, computers, software, etc.--all of which need to be paid for out of the dues income. You need closer to 400 members to make decent money. I wasn't guessing at the numbers--my figures were taken from the owners of an existing gym. We talked about opening a second location--the numbers didn't make sense unless I could guarantee 300-500 members. With the number of people leaving every month, you would have to add 50-odd members per month to keep the income steady. God help you if the economy goes down--gym memberships are the first things most people drop. It's not at all about the couch potatoes. If you think you can do it, go for it. But be honest, and it would be fantastic if you could come on here in a couple of years and give an update as to whether you were wrong or right--I would love to be proven wrong and I would love to hear your success stories. Good luck.
Just curious was the area of SF a fit area or full of fat arse people? Was keeping 300 to 500 people that far fetched? Were there big box gyms in the area?
Good points. I think America is full of fat arsed people, SF is probably better than average due to the weather lending itself to people being out more and exercising more. There is a lot more food consciousness too, and more of the population can afford the expensive healthy foods. That's what the surveys say. Target market is working professional with disposable income. Truly rich people have trainers who come to their houses. There was only one "really rich" guy at the gym. He didn't do cross-fit. One "somewhat rich" ex-actress/housewife was a member (total babe)...she didn't do crossfit either. One "beyond rich" guy came in and asked, but never came back. 300 is easy when times are good. Not so easy when the economy tanks. 500 will take time, and I know that gym never reached that goal. It is closer now (I have access to the data), so things are decent, but it has not reached 500. It's a city...everything is close by. Several other gyms in the area. Small boxing gyms, Cycle gyms. And 24 hour fitness. There are probably other gyms too, of all sizes and specialities, that I am not aware of. There are also personal trainers at all price points. It's an active city with yuppies, and the trades cater to them. The owner is very savvy about email marketing, and that keeps bringing new people in as existing members let their memberships lapse for any number of reasons--moves, marriages, job hours or unemployment, financial shocks, kids, time, whatever. It would have gone under a long time ago if not for her ability to attract fresh blood.
Perfect. You win I'll take you and your wife/GF (either/or - not both ;-) to a dinner at a restaurant of your choice. If I win you could do the same for me - Ocean Prime Tampa would work. Always like to meet fellow Fchatters - so this will be a win/win.
