How much does it cost to open a gym ?

Fitness is your passion—now it’s time to make it pay the bills. Opening your own gym is an ambitious and rewarding venture, but the biggest question is : “how much does it cost to open a gym ?” Gym startup costs vary greatly depending on the size and type of operation you want to run.

That’s why we’ve created this worksheet and companion guide to determine the cost to set up a gym and calculate the details of what it will take.

Breaking down gym startup costs

So, how much does it cost to start a gym? To answer that, you’ll have to start by envisioning the ultimate version of a gym you have in mind. For example, a modest studio gym could cost $65,000, while a mid-size gym could cost $115,000. You could also open a simple cycling studio for as little as $50,000, but even within that framework, costs can vary drastically. The bottom line is, it’s possible to spend anywhere from $50,000 for a budget facility to upwards of $1,000,000 for a colossal mega-gym with all the amenities.

And how much does it cost to build a gym from the ground up? For that, you’ll have to throw open those financial windows considerably higher. Take into consideration such factors as square footage, location, and whether or not you will rent or own your gym that you are building and your costs can range between several hundreds of thousands of dollars—all the way up to several million dollars in some cases. 

Regardless of your particular business path, it’s helpful to break down the costs into two categories: one-time costs and recurring costs.

One-time costs

Make no mistake, the initial costs of opening a gym aren’t cheap. However, your wellness venture may or may not need to consider every item on this list, so feel free to pick and choose the applicable items and add them to your worksheet.

  • Physical location – this cost will vary greatly depending on desired size and location of your gym, as well as your decision to rent or purchase the building. Aside from space for weights and machines, you may wish to include space for cardio, yoga or spin classes. Additionally, you might provide locker rooms, showers or a sauna. You can easily spend up to $800,000 if you want to own the space outright. As a rule, always do thorough comparative research on commercial spaces in your desired area. 
  • Gym equipment – this cost similarly has a large range, depending on the amount and type of equipment you want. Think somewhere between $10,000 for a personal studio to $50,000 for a fully-equipped commercial gym. Be sure to shop around—and keep in mind you can often get a discount if you purchase the equipment in sets as a complete package.
  • Certifications – having a professional, certified staff is a big plus. Accreditations for personal trainers can range from $500 to $800 per certification. Some certifications to explore include: American Council on Exercise (ACE), National Academy of Sports Medicine (NASM), International Sports Sciences Association (ISSA), American College of Sports Medicine (ACSM) and National Strength and Conditioning Association (NSCA).
  • Licenses and permits – individual localities define the standards for which licenses and permits you will need. Be sure to look into a business license and any required health and safety compliance permits as well. Costs will vary across the board, but keep in mind that proper licenses and permits are necessary.
  • Legal and processing fees – you may need professional help negotiating your lease, closing the property sale, or just muddling through the necessary licenses and permits for your gym. Expect to pay around $200 per hour for these services. Fees vary depending on which legal documents you’ll need (Certificate of Incorporation, Business License, Business Plan, Non-disclosure Agreement, Memorandum of Understanding, Employment Agreement, Operating Agreement etc.), but expect to pay an average of $9,000 to get everything squared away
  • Insurance – insurance is a legal necessity, especially important for a gym. You’ll need general liability, workers’ compensation, and a surety bond among potential others. Expect to have around $12,000 in premiums here to start, though rates will vary based on different factors (such as franchise situations).
  • Building improvements and remodeling – this cost may or may not be necessary for you, and varies on an individual basis. You’ll at least need to do what it takes to get the building up to code if it isn’t already. Just keep in mind that remodeling costs add up quick, so don’t get carried away.
  • Computer network and POS system – you’ll need to be set up with an internet network and a point of sale system to accept modern forms of payment, as well as proper gym management software to ensure things go smoothly. Depending on which provider and level of hardware you choose, you will need to spend $550 to $2,300 annually and typically twice that amount to get started.
  • Signage – Here’s an opportunity to get creative. Proper gym signage can be pulled off for as low as $20, though you could easily spend much more.
  • Employee uniforms – this is another cost that is entirely up to you. You generally want some uniformity across staff wardrobe, but for a gym, simple workout clothes and company logo shirts are typically the norm.
  • Miscellaneous gym supplies – customers will expect some basic supplies be available to them, so you should have towels, chairs, etc. on hand. Expect about $500 to get set up.
  • Merchandise – don’t overlook a great opportunity to offer customers supplies and merchandise. Think t-shirts, supplements, protein shakes and powders, water, etc. Make sure you budget in the cost of the initial stock-up.
  • Advertising – you’ll want to announce your arrival to attract potential patrons. You could spend $5,000 to run a robust, more traditional ad campaign or go guerilla and plaster signs in high traffic areas to recruit customers.
  • Responsive website – every modern business needs a web presence. Expect to pay $300 to $700 for the initial build.
  • Operating cash – you’ll want some working capital and cash reserve for normal business operations. We suggest having at least $1,000 on hand. 

Recurring and ongoing costs

Since the ongoing cost of owning a gym varies so significantly between gym types and sizes, we’ve made a list of potential costs you’ll need to consider in your venture with average cost estimates. Exact figures may be more or less for your operation, but these gym operating cost categories should be on your mind.

  • Mortgage or lease payments – regardless of whether you rent or purchase your location, you’ll have a monthly expense in the form of a mortgage or lease payment. Costs will vary significantly depending on the factors outlined above and the final cost of the building or loan amount.
  • Insurance – those $12,000 premiums to start will have to be kept up to date and paid annually, so be sure to factor them into your ongoing budget costs.
  • Permits – compliance permits often have renewal fees. Be sure to check with your locality for specifics.
  • Equipment lease payments – if you choose to go the leasing route for your equipment, make sure to budget in those payments. Average cost ranges from $3,934 to $8,067, but that will vary depending on what kind and how many pieces of equipment you’re leasing.
  • Utilities – a gym uses a lot of electricity, especially if it’s open 24 hours a day. Larger-scale operations pay an average of $63,465 to $68,413 annually.
  • Equipment Repairs and Maintenance – gym equipment takes a beating day in and day out. Make sure you factor in frequent repair and maintenance costs. This could cost you $25,040 annually.
  • Cleaning supplies – cleanliness and sanitation is a must for a gym. You’ll need mops, vacuums, toilet paper, bleach, wipes, laundry service etc. Expect an average of $150 monthly for smaller operations. Larger gyms may spend from $12,609 to $29,980 annually.
  • HVAC maintenance – this is your heating and air conditioning, and it’s pretty important upkeep for a fitness center. Average cost is $500 annually for routine maintenance.
  • Phone and internet service – your patrons will appreciate free WIFI. Expect to spend $75 per month, or $900 per year here.
  • Employee Wages – employees will earn varying salaries depending on their skills and experience levels. Make sure you have payroll for the first few months on hand before opening—it may take some time to turn a profit.
  • Payroll taxes or self-employment taxes – this cost goes alongside your wage expenses and will vary similarly, according to your business model. Make sure you consider your employees’ and your own particular situation to determine the taxes you’ll owe. Keep in mind they often need to be paid quarterly. If applicable, self-employment taxes will shake out to around 7.6% of individual revenue.
  • Credit card processing fees – standard industry rates for swipe transactions shouldn’t exceed 3.25% on the high end, so shop around for your service provider. You’ll also have to consider mandatory PCI compliance fees, which typically start at $5 per month. Many gyms reduce the amount of transactional fees they pay by reducing the number of transactions they make—since members pay monthly costs, retail items can be bundled into their membership costs as they occur.
  • Marketing – it’s up to you if you want to make your marketing efforts an ongoing cost. You’ll have to consider your individual business model and measure the return on investment of different marketing strategies.
  • Legal and professional fees – this is a fluctuating expense, as it depends on your particular business model and situation. Just keep in mind that professional services, such as accounting or legal, typically run about $200 per hour.
  • Miscellaneous expenses – even with the most meticulous planning, you never know what problems may arise. It’s always a smart idea to budget in some funds for miscellaneous expenses. We suggest at least $1,000 per month.

Common gym startup myths & mistakes

Every gym startup operation is different, saddled with its own unique set of challenges to face. You’ll have to accept that you’re bound to make some mistakes. Our advice: just make sure to avoid these common missteps.

  1. Don’t skip the training and accreditation.  As a fitness professional, your clients look to you as an authority, so make sure that’s the truth. Proper training and accreditation is key for the success of your clients’ goals and therefore the success of your gym as a business. You aren’t serving your clients or yourself if you and your staff are not properly trained. Accreditation in niche or specialty fitness markets is also a great way to set your gym apart from competitors.
  2. Don’t begin without a client base.  If you’re considering opening your own gym or fitness center, you most likely already have a number of clients. A gym is a tough business to start from scratch, so you really want to make sure you have a sustainable number of devoted clients who will become members. If you don’t have any sure clients at the outset, don’t invest in opening your own gym at this stage—work on building your client base on a smaller scale.
  3. Don’t skimp on equipment quality. Across the board, you want to make sure your equipment and facilities are up to snuff—if not for your members, then for your own bottom line. Gyms take a lot of abuse and going cheap on flooring will cost you more in the long run when you have to replace it. Buying used machines may be less expensive at the moment, but you’ll sacrifice access to the full manufacturer’s warranty coverage, as well as up-to-date technology to best serve your members.
  4. Don’t surprise your neighbors. There’s going to be some noise. Weights will be heavy, music will be pumping, machines will be whirring—even downstairs neighbors to a zen yoga studio will hear some thumping. If your space is connected to or within earshot of others, you’ll want to be fully up-front about the inevitable noise with your landlord and/or neighbors. The last thing you want is for your business to have a negative impact on its surrounding area, so make sure you clear this issue early on.
  5. Don’t forgo gym management software. Your gym must operate smoothly and efficiently. A lot goes on behind the scenes with each membership. Sophisticated software to handle check-ins, billing schedules, membership renewals, day to day scheduling and various other administrative tasks may not be cheap, but it’s worth every penny. Remember, automation is your friend.

Industry tip

 Running a gym is a workout. Don’t burn yourself out tracking expenses—consider upgrading to online accounting software with Sage Business Cloud Accounting to save time and money.

What gym owners wish they knew when starting their business

It takes a combination of luck and experience to uncover industry best practices. Luckily for you, we’ve culled the wisdom of seasoned gym owners to supply some valuable hindsight.

  • “Assemble a team.” Opening a gym is an ambitious venture, so don’t go it alone. Starting with a team of dedicated people ensures not everything will fall on your shoulders. The key is finding people who will allow you to accomplish more than you can by yourself. Not only will a collective effort boost results, but it can be financially beneficial—your team of associates can double as a team of investors. But you might want to be wary of even splits as far as ownership goes—it’s important to have a designated leader to drive your venture in a singular direction.
  • “You’re more than just a gym.” The sooner you realize this, the better off you’ll be. “You aren’t simply selling fitness. You’re selling a brand. You’re selling a lifestyle. Create a culture of belonging for your members and everyone will benefit,” said Chris Welch, who turned his lifelong love of fitness into a full-time venture when he opened CrossFit Five Plus in Beverly, Massachusetts. A positive, captivating culture surrounding your gym can lift you higher than any other traditional business tactics. Give yourself a leg up and make sure you have a solid grasp of the image you want to embody before you open your doors.
  • “It's okay to start small.” You don’t need to go all out for your first day, month, or even year. In fact, you really can’t afford to. You need to be realistic in considering the size of your operation, and do your business planning accordingly if you want to be sustainable. If you’re going to lease a space, get the minimum square footage you think you’ll need. You can always expand, move, or open another location. As with any business venture, unnecessary expenses are the last thing you need and can be detrimental to success.
  • “Short term profits aren’t everything.” At the start, your number one focus should be building your brand and your following. Make moves in service of that. Offering workout fuel (protein bars, coffee, recovery drinks, supplements and the like) may not yield huge profit margins, but it does benefit your clients and keeps them coming back. Health and nutrition are inextricably linked to fitness—a well-curated nutrition aspect of your gym shows that you care about your clientele and positions you as an expert. These kinds of tactics pay dividends in the long run.

How to use the gym startup cost worksheet

Our gym startup costs worksheet is simple and intuitive to use. Once downloaded, it’s fully customizable to fit your needs. The template includes both high and low-end estimates for starting a gym to give you a full picture of what it will take.

  • Download the free template.
  • Add or remove fields applicable to your particular gym startup type.
  • Assess your needs and related costs.
  • Make note of potentially changing costs or costs to be determined.
  • Plug in your numbers and enjoy the simplified breakdown of your startup and ongoing costs.

Focus on building your business, not tracking expenses—try Sage Business Cloud Accounting

Opening and maintaining a gym requires a lot. Day in and day out you invest your time, energy and focus into creating something amazing. So why waste your valuable time and efforts tracking expenses the old-fashioned way? Administrative tasks can now be fully automated—so upgrade your business model by deploying online accounting software through Sage Business Cloud Accounting and save yourself some time and money. You have enough on your plate. Outsource the busy work and get back to doing what you do best—making your business a success.

Ready to grow your business ?

Sage Business Cloud will help you spend less time on admin and more on attracting customers.