Starting a fitness studio is a capital-intensive endeavor; however, starting a fitness studio will cost significantly less than starting a full-service gym.
To start a fitness studio business:
- Decide the type of fitness studio.
- Conduct target market research.
- Create a business plan.
- Calculate the Startup & Ongoing Costs.
- Register your fitness business.
- Obtain required licenses and certifications.
- Explore relevant funding options.
- Select the fitness studio location.
- Devise a marketing strategy.
- Design attractive fitness programs.
- Simplify bookings and memberships.
- Create promotional content.
- Launch your fitness studio business.
Some of these steps require continuous assessments and reviews to make pragmatic decisions before launching your fitness studio business and for the duration of your business. This guide explains each significant phase and process you must work on to start a fitness studio.
Additionally, review my guide on building a fitness brand to understand the process of branding and creating your messaging.
#1. Decide the Type of Fitness Studio
The type of fitness studio you wish to start will form the basis of your business plan. You can provide a specific service or offer a wide range of services.
- Choose a fitness niche. Most fitness studios with a clear brand operate within a fitness niche, such as yoga, boxing, Pilates, Zumba, CrossFit, or barre.
- Decide the operations of the fitness studio. Do you want to hire freelance instructors or have in-house staff? Will you offer personal training to anyone who wants it, conduct classes for groups at a time, or offer both services?
Radiant Sun Academy is an excellent example of a studio offering multiple services. At the same time, Skyre Spin & Sweat is a perfect example of a studio offering a specific service – spin in this case.
Large fitness studios may have all the conventional gym equipment and sufficient space for almost all types of exercise, from high-intensity interval training (HIIT) and Crossfit to boxing, aerobics, and more.
However, fitness studios are successful because they can target and serve a specific niche well rather than providing services for everyone interested in fitness.
Specialization is more than just in vogue. Thus, it would help if you ideally chose a niche that is or will be your forte. Your passion may be rowing, cycling, or kickboxing. A practically viable option is pursuing what you already know and offering the best version of it to your target audience.
For instance, if you’re passionate about yoga and are a registered yoga teacher, choose a style you can champion for your business, and plan a fitness studio accordingly. For example, here is a concept that I would have never thought would be successful but is wildly popular.
#2. Conduct Target Market Research
Market research is a fundamental step in your quest to start a fitness studio business. Your passion aside, your target market assessment will influence the choice of your niche.
You may be interested in yoga, boxing, Zumba, Pilates, or anything else. That interest isn’t as valuable as what the market demands. Trying to create a new market is a daunting endeavor.
Try to combine the target market research and your interest in a particular type of fitness studio. Identify the subset of a target market currently not served by the other fitness studios in your area. For example, you may plan special Pilates programs for a specific age group, conveniently scheduled yoga classes for busy professionals, and similar approaches.
Approach the target market research with two objectives.
- You must identify what the market wants but doesn’t have easy access to it.
- What can you deliver, and how can you tweak it to precisely serve the target group’s needs.
A fitness studio may have a membership fee or charges per hour, class, or appointment. It would help if you didn’t decide this unilaterally before assessing what your target audience may prefer. Although memberships are great for business, consumers tend to purchase class packs and try different studios.
Your market research and data analysis should be industry-wide, niche-specific, and local. So, you need to study the relevant data, like these yoga statistics. Then, review the local fitness studios and conduct surveys to analyze the needs of your target audience.
#3. Create a Fitness Studio Business Plan
A fitness studio business plan is the third step because you can only create it after completing the first two steps. Your fitness studio business plan should be as thorough as possible to serve as the blueprint for your business. However, the first draft won’t be perfect. Changes are inevitable. Treat your business plan as a living document.
Also, there are three distinct phases of creating a fitness studio business plan.
- You must gather all the information, including the market reports, customer data, and analyses.
- You should write your business, marketing, and financial plans.
- Collating the final business plan document.
Note: Review my guide on creating a fitness studio marketing plan. The fitness studio marketing plan is a subset of your broader fitness studio business plan.
Here are the broad areas to cover as you prepare a fitness studio business plan:
- Fitness studio type (HiiT, yoga, Pilates, etc.)
- Messaging and unique selling proposition
- Registrations, licenses, and certifications
- Locations and requisite space
- Infrastructure (lighting, flooring), including gear
- Fitness programs and membership options
- Upfront financial investment and working capital
- Branding, marketing, and promotional strategy
- Financial plan for the next five years
- Risks and contingency plan for the fitness business
You should have all the information for the document at this stage. You can use one of the many sample templates available online. A few exceptions aside, most templates are similar.
Here are the significant sections of your final business plan document:
- Executive summary (including the vision for your brand)
- Business overview (detailing the company structure, etc.)
- Leadership profiles
- Industry data
- Target audience analysis
- Competition assessment
- Marketing strategy (including details of various campaigns)
- Operations plan including staff recruitment strategy
- Financial plan
- Business development
#4. Calculate the Start-Up & Ongoing Costs
The initial investment includes the upfront startup and initial working capital to set up and operate a fitness studio. Also, you should have a marketing budget included in the costs. The financial plan should be at least for a year, preferably for much longer. Fitness studios may not break even in twelve months, so planning for the medium term is necessary.
Also, the investment varies wildly depending on your plan. A small fitness or spin studio for a maximum of 10 students at a time may not need more than 1,000 sq ft (92.90 sq m) of space. In contrast, a bigger studio with ellipticals, battle ropes, and spinning classes should be much larger.
How Much Does It Cost To Start a Fitness Studio?
The cost to start a fitness studio depends on many variables. You may choose to buy or rent a place for the studio, and the financial models for the two scenarios are a world apart.
A modest fitness studio in a suburban area and an upscale downtown fitness center will have vastly different startup costs. Likewise, everything from the size of the space to the types of equipment you need will influence the startup cost. Also, there are many inevitable one-time and recurring expenses.
Starting a fitness studio can cost between $50,000 and $1 million, depending on the size, location, and target customers. Recurring costs include staff pay, utilities, equipment maintenance, studio upkeep, marketing, payment processing charges, and legal fees.
Here’s a breakdown of the upfront cost to start a fitness studio:
- Studio space and remodeling – some fitness studio spaces may not need much remodeling
- Fitness equipment and accessories – you may lease the fitness equipment instead of purchasing
- Licenses and permits
- Certifications and accreditations
- Accounting and legal fees – you may hire an accountant or use accounting software
- Computers and systems
- Marketing and promotions
- Website and content
Here’s a breakdown of the recurring costs of starting a fitness studio:
Here is a fitness studio profit calculator. It helps you forecast the monthly profits of your fitness studio.
#5. Register Your Fitness Studio Business
Registering a fitness studio business can be a cakewalk if you’re familiar with the local laws, permits, and other relevant regulations. Otherwise, the whole process can be overwhelming. Consider seeking legal assistance if you don’t wish to tread uncharted territories.
How To Register a Fitness Studio Business
Choose a legal structure for your fitness studio business, register it per state or county laws, obtain an Employer Identification Number, and become a sales tax vendor. Also, a fitness studio must have insurance coverages for the business, employees, and clients.
The Employer Identification Number is the Federal Tax ID mandatory in all states. The legal structure of your company may determine the other applicable laws. For instance, New York requires LLCs and corporations to be registered with the state, whereas proprietorships and general partnerships must apply through the county clerk’s office.
The sales tax registration is subject to state laws as there’s no federal indirect tax on goods and services. Plus, insurance policies to cover the studio, company liability, workers’ compensation, and disability are necessary.
Most local laws require a certificate of occupancy to approve the registration of a fitness studio. Also, you must time necessary site inspection and clearance based on the local zoning laws and permits before opening your studio to avoid unintentional violations.
In New York, the pre-operational inspection involves the health, fire, and planning departments. Furthermore, you may need special permits to provide specific services at your fitness studio, such as child care. Likewise, everything from a spa or sauna to the sprinkler system and remodeling of the leased or owned space must have regulatory approval.
#6. Get the Licenses and Certifications For Fitness Studio
Registering your fitness studio gives you a business license, but you and the brand should also have significant accreditations. It will be beneficial if every trainer is certified, including Pilates and yoga instructors. Also, you may need special provisions at your fitness studio per the local laws.
The most reputed fitness studio and trainer accreditations are:
- American Council on Exercise (ACE)
- American College of Sports Medicine (ACSM)
- National Academy of Sports Medicine (NASM)
- National Federation of Professional Trainers (NFPT)
- National Strength and Conditioning Association (NSCA)
- National Council on Strength & Fitness (NCSF)
- International Sports Sciences Association (ISSA)
On the other hand, yoga instructors do not need certifications to teach, but it will help if your yoga instructors undertake 200-hour or 500-hour Yoga Teacher Training.
Your fitness business needs a few licenses or permits depending on the scope of your services. For example, you need a license to sell food. Pools, showers, or massage services require applicable permits. Also, your local laws may necessitate specific first aid responses.
Likewise, healthcare services and even the music you may play at your fitness studio must have a permit or license.
#7. Explore Relevant Funding Options
Financing is an essential requirement for any capital-intensive business. A fitness studio isn’t an exception. However, you should have a bespoke approach to explore relevant funding options. You have sufficient options at your discretion, from the SBA to banks and more.
Also, you can avail of different types of funding, such as for recurring costs like payrolls or equipment financing, leasing, and asset-based lines of credit. Furthermore, there are secured and unsecured credits and cash advance options. The key is finding and exploring relevant options.
Take, for example, the SBA’s microloans approved in association with the Southwest Initiative Foundation of Minnesota. The program financed Iron Jungle CrossFit in Hutchinson in 2014 and again in 2018 through the Prairieland Economic Development Corporation. Today, the fitness business has expanded, moved into a new studio, and is a successful enterprise.
Beyond the Small Business Administration loans, you can explore the likes of National Funding and GUD Capital. Also, you must check if there are any waivers and incentive programs in your town, city, county, or state for fitness studio businesses. For instance, whether they’re related to using environment-friendly technologies or recycling, and other factors that may be relevant to you.
Another option is to explore self-funding or funding from friends and family. This approach is by far the most common during the startup phase of a fitness studio.
#8. Select the Fitness Studio Location
Fitness studios must have a convenient location for the target market. Also, you have to comply with the local zoning laws. Selecting a fitness studio location is relatively easy if you consider a place that’s already a gym or health club. Otherwise, you may need extensive remodeling.
Consider all the approvals you need before developing the place if you plan on a boutique fitness studio or gym that calls for extensive remodeling.
Thus, consider the local zoning regulations, types of construction, and remodeling permitted in different areas, and accordingly, choose the location. Ideally, your fitness studio should remain in the same place for the foreseeable future.
The viability of your business plan depends substantially on the location. All lenders, including the SBA, have assessors to review the feasibility of your financial plan and overall business prospects. Unlike digital businesses, a fitness studio’s fate depends on its location.
Prioritize the ease of access, including parking and wheelchair compatibility. Choose a relatively busy area with traffic and pedestrians unless you live in a community that loves to work out at a somewhat secluded place. If your clients have to drive long distances, many of them are unlikely to stay constantly motivated to show up throughout the year.
#9. Devise a Marketing Strategy For Your Fitness Studio
Your fitness studio needs a formidable marketing strategy to create waves unless you’re considering a franchise and capitalize on the popularity of a successful brand. Thus, marketing can’t be an afterthought.
Please review our ultimate guide on fitness studio marketing to build your fitness studio marketing plan.
#10. Design Attractive Fitness Programs
The fitness programs and the instructors at your fitness studio will play a crucial role in your success. The swankiest gyms may fail if the fitness programs, including the offers, don’t resonate with the target market. Thus, you must design fitness programs that excite people, which should be easy if you follow this guide.
The market research, surveys, and data analysis mentioned at the outset will guide the strategy to attract potential clients. Also, competitor analysis will tell you where others are going wrong or what they’re not doing that you can improve on and deliver better.
I’ll highlight two modern tales of famous fitness programs.
Bishnu Charan Ghosh developed the original version of what you may know as hot, power, or Bikram yoga. Bikram Choudhury utilized Bishnu Charan Ghosh’s 26 postures but tweaked the sequence and, thus, the routine. Hot or power yoga didn’t exist until half a century ago, either in the United States or India. Today, it’s a celebrated fitness routine.
Likewise, what everyone knows as Zumba is just over two decades old. Even the name of this fitness routine is the trademark of Zumba Fitness, LLC. One of the co-founders, Alberto Perez, was a choreographer before creating the fitness routine based on salsa, mambo, and hip-hop. Today, more than 15 million people practice Zumba worldwide, and there are more than a hundred thousand certified instructors.
You may or may not have concepts like Zumba or power yoga, but you can always customize the fitness programs that you want to offer at your studio.
#11. Simplify Bookings and Memberships
Almost 88 million Americans have gym memberships, but around 6.1 million don’t use the facilities and services they pay for yearly.
Signing up and renewing memberships should be easy. You should have a simple schedule, booking, and membership management process.
Use fitness studio software that focuses on customer experience.
#12. Create Promotional Content
Blogs, vlogs, and self-help tutorials are effective branding tools. Social media posts are useful to promote anything from a limited period membership offer to sharing updates about significant progress.
Create pre-sale memberships and class packs to attract initial customers.
#13. Launch Your Fitness Studio Business
The final step, of course, is launching your fitness studio business. Execute a grand opening when you open the doors for everyone. And keep up with all the steps shared in this guide because everything needs timely updates.
You need to renew permits and licenses. Marketing is a regular exercise, and so are promotions. Market research may take a backseat during exponential growth, but you must always stay alert and proactive to retain your clients.
Why Do Fitness Studios Fail?
Most fitness studios fail due to poor business planning and unrealistic financial projections. An untested business model, high investment and recurring costs, wrong location, and ineffective marketing can sink any fitness studio, even if it’s part of a popular franchise.
A fitness studio shouldn’t skimp on any aspect. Be it the quality of equipment, ambiance, cost of membership, fitness programs, your network of partners to promote the brand or the skills of the trainers.
Identify the most appropriate specialization or niche for your fitness studio business, depending on your knowledge, skills, passion, local market research, target groups, and data analysis. Prepare a comprehensive business plan with conservative financials. Finally, develop a fitness studio that your clients will love to frequent and design programs that satisfy the members.
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About the author
Naz Ahm is the founder of StudioGrowth and has spent a decade growing start-ups and venture-backed companies. He writes about sales, marketing, and growth, especially in the yoga, fitness, and wellness industry.
Naz has an MBA from IESE Business School and started his journey in the wellness industry when he set up an on-demand wellness business. Naz currently splits his time between the U.K and the US.