So you’ve finally decided to take the plunge and open your own gym, health club, or studio. Congratulations! But beware. Success will require more than just your love of fitness and your desire to help people.
As a leading gym membership consultant, I’m often been called in to boost sales. But sometimes the call comes late: after new gym owners have gotten off on the wrong foot.
I’ve seen the same costly mistakes time and time again. And it’s all so needless.
At best, the mistakes could keep you up at night and delay your progress. At worst, the mistakes could cost you your business.
Don’t let it happen! Don’t make the mistakes.
This article identifies the five most common mistakes I’ve seen in my practice and offers advice on how to avoid them.
In short, I’m about to give away for free some of the most valuable things I’ve learned.
Mistake #1 – Not Understanding The Competition
Is there a ten dollar a month club that recently opened in your area that boasts about its “no contract” policy?
These facilities devalue the perception of what a gym membership is, and how much it should cost. You’ll need to understand and overcome the challenge. After all, chances are your club will be smaller, more expensive and have less equipment.
You may already near the top of the profession in terms of expertise. But guess what? That’s not enough. Time for some tough love. Here’s the sad truth:
Your initial success will have less to do with your expertise, and more to do with the market demand for a “new” player in your market.
Don’t get me wrong. Your expertise will serve you well – in time. But you have a big challenge getting off the ground, especially if you’re in a relatively large space with high overhead. Will word-of-mouth referrals really be enough to fill your gym, pay the rent, and keep the lights on? And don’t you want to make a profit on top of that?
Solution: Make sure you do a feasibility study at the outset.
Assess the competition and come up with a business plan that focuses on your strengths.
So sell value, not price.
Talk what makes you special, as Mike “The Machine” Bruce explains in this must-read blog post.
In short: highlight your expertise and success stories. Make sure you have a solid marketing plan in place and the means to execute it. Closely related is…
Mistake #2 – Not Charging a Membership Fee
This one drives me crazy. If I had a dollar for every personal trainer turned club owner who told me some members were paying only for personal training (and not a membership fee on top of that) I’d be rich.
I think the problem is that these new owners haven’t quite grasped their new situation. Don’t make their mistake! Understand that you are now running a bricks and mortar business with operational overhead. Packages and discounts can work well if done properly.
But don’t give stuff away for free.
Solution: Make sure you charge a membership fee on top of personal training fees.
Mistake #3 – Choosing the Wrong Location
After weeks of looking, you’ve found your dream location. Or so you think. It has the right square footage for what you plan to do.
It may even have been occupied by a fitness facility and you can get a great deal on some of the equipment.
Should you pop the champagne cork? Not necessarily.
Have you considered traffic flow? Understanding which neighborhoods will provide the greatest conversion rates plays a large role in your gyms site selection. Is your location north of a major metropolitan area? If so, assume you will get fewer members south of you and more members from the north.
But here’s the key consideration: will the location bring in the number of members you need to cover overhead and earn a profit?
Also, If your club is located in a hidden location with lower rent, your cost per square foot will be more manageable. But you’ll have to spend more on advertising and promotion.
Which is what I do for a living. I’ve had great success promoting “hidden” clubs. Contact me for more info.
Solution: Don’t rush into anything.
Your dream location could turn into a nightmare if it’s:
- too costly
- in the wrong place
- God forbid, both too costly and in the wrong location
The location decision may be the most important one you make. Carefully consider the cost/location tradeoff in line with your overall business plan.
Mistake #4: Counting On Pre-Sales And Not Knowing Local Laws
Once upon a time, gym owners counted on selling advance memberships before the doors even opened.
But take it from someone on the front lines: these days pre-sales are tough. And I speak as someone who’s “been there, done that” and is still achieving great success, even though many customers are savvy and wary, preferring to take a “wait and see” attitude.
A crucial point: did you know that you have to familiarize yourself with local laws?
- In the Canadian province of Quebec, contracts may not exceed one year and may not be automatically renewed.
- In New South Wales, Australia, fitness clubs may not accept prepaid fees in excess of one year.
- In Ontario, Canada there is 10 day “cooling off” period in which clients may cancel contracts without penalty. There are similar cooling off periods (ranging from 48 hours to ten days) elsewhere.
- In the U.S., some states will not allow you sell a prepaid membership unless you’ve been in business for two years. Other states have surety bonding requirements.
I do this stuff for a living. And I’ve seen talented trainers fail because they didn’t know what they were getting into.
A related problem: some gym owners just don’t have deep enough pockets. So counted on presale cash to open the doors. When the pre-sales didn’t materialize, they were done – before they ever got a chance to open the doors.
Solution: Don’t rely on pre-sales
My four point checklist:
1) Have investors
2) Be familiar with local laws
3) Have a marketing plan
4) Have alternative sources of cash or a line-of-credit in place.
Mistake #5: Cutting Corners
Even though money is tight, don’t cut corners.
• Don’t try to do everything yourself. Sixteen hour days six or seven days a week is a formula for burnout in less than a year. Hire qualified staff to ease the burden as soon as you can.
• Don’t rely on Groupon. They ask for a 50% (or more) discount and then take half that. You’re working for 25 cents on the dollar. So consider Groupon as a last extremity backup, but only if you get desperate and have no other options.
• The little stuff (which isn’t really little at all). Missing pieces of carpet, floor mats, or mirrors look horrible to potential members. So do dirty bathrooms or locker rooms.
Remember: you are entering the market against tough competition. You must do everything possible to convince your community that you are not a fly-by-night operation. Nothing looks worse to a prospective member than touring a facility that still looks like a construction site. It just gives them another excuse not to join.
Solution: Again, make sure you have adequate financing in place to avoid cutting corners in the crucial first months.
And make sure you are in a position to execute your membership growth strategy.
Finally, I am here for you to help implement all this stuff. Every market and every situation is different. May I offer you a free consultation on how to best execute your vision? We don’t just “coach” you — We roll up our sleeves to sign up members in person at your location. You pay nothing upfront, and we assume the financial risk.