How to open a garage gym

This is an overview of which topics to cover when you want to open a garage gym. This is less about the equipment to pick and more about the business itself. If you want to know more about equipment refer to the related articles section.

Business plan

Most business plans will never happen as they were written. This upfront. Still, you are a lot more likely to fail without having than with having one. Just don't prefer planning over action. What you write on paper has to lead to action. Otherwise, your goals will never materialize in the real world. Go with general Patton on this one:

"A good plan violently executed now is better than a perfect plan executed next week."

Your business plan should cover:

Rental cost
Equipment cost
Insurance cost
Estimated income from classes
Estimated income from memberships
Estimated income from selling product in your gym
Costs of Marketing
Water Bill
Electricity Bill
Gas bill
Break-Even point
Monthly income goal
Yearly income goal
Quarterly income goal
Costs for events like Christmas parties, Easter Egg Hunts, etc.
Your salary
Other salaries

A good way of looking at your income is something that hopefully builds over time. Take some inspiration from a Software as a service subscription model. Netflix, Phone contracts and other subscription models are not liked for their auto-renewal clause, but they make money. Think about these aspects beyond your passion for fitness. There is no use in opening a garage gym if you can not make the commercials work. Then you might as well stay a personal trainer or employee.

Insurance

As it is very likely that some people will hurt themselves in your gym, inquire about insurance. This can vary quite a lot based on the services you provide and whom you are providing them too. If you want to run children and classes for retirees, check whether this needs extra insurance. The same goes for other high-risk activities like indoor wall climbing. The last thing you want is an accident to happen which is not covered by your insurance because of a loophole and you face a medical bill that might put you out of business.

Staff

You will be the first employee of your garagegym and you better put in the hours. If you think that your first business is you paying others to do to the job for you and lean back, you better think again. In the early years, your business probably will not even run a profit. After that margins will be razor-thin. You don't want to eat into your profits only because you like the idea of bossing your staff around. Better to keep overheads as small as you possibly can.

Equipment

Equipment is also a tricky one. You can run effective classes without any equipment whatsoever if the main goal is weight loss. Kettlebells will give you a good return for the money you put in as they have many applications. The same goes for jump ropes and sleds. Followed by this are dumbbells, racks, and barbells. Where you can expect the least return on your investment is the machines you find in most commercial gyms. They are usually built for one purpose only. If you have machines make sure that your training programs are designed to use them. Otherwise, what is the point in getting them and use them to make your gym more sticky for the people who go there?

Size

Based on your business plan and how many members you need you also have to decide how big your gym will be. This has an impact on rent, insurance and running costs of the facility. If your model only makes sense with 100 members in your gym, make sure that you plan for peak times and that all the members have access to the material they want to use at these peak times. Otherwise, you might lose them to another gym where they do not have to wait. This is tight, but an important balancing act between how much to invest in space and equipment and keeping your members happy.

Location

Check the location of your gym.

How many people live and work in the area?
Is the location close to public transport?
Do a lot of people pass during the day, or is the door to the gym in a dingy corner?
How do you get there by car?
How do you get there on foot?
How do you get there by train?
What kind of people live in the area?
Which businesses are also in the area?
What is in a 5-minute driving/walking area of your front door?
What is in a 10-minute radius driving/waking area of your front door?
What is in a 15- minute radius?
What are the commercial rents in the area like?
What are the rent for living quarters like in the area?

Location can be the make or break moment for a gym. Put some thought into these factors before making a quick decision and renting some specific area.

Parking

Parking is always a bonus and a major bone of contempt for anyone. Everybody hates looking for a parking space and if your garage gym is connected to the grueling task of not finding a parking space in the first place, chances are that people will rather go somewhere different. Check the parking spaces available for your garage gym.

Are these dedicated parking spaces?
If they are often taken up by people who don't go to the gym, how do you keep them free?
If they are not dedicated parking spaces, how busy is the parking lot / Garage during the day?
Which alternative parking spaces are available?
Is there any room to develop your own parking spaces?
Do the parking spaces suffice for your peak times?

Competition

Competition can be also a major factor when you consider your location. Would you rather have your garage gym in an area where 250.000 people live, but you have 100 competitors or in an area where only 5.000 people live but you are the only gig in town. I would always choose the latter as long as 10% of the population has a gym membership.

Here is the math:

Scenario one

250.000
10% of the Population with a gym membership 25.000
25.000 / 100
250 members per gym

In this scenario you have to compete on opening time, prices, staff etc.

With 100 different offerings, you will also have to go very niche to make yourself attractive to some slice of this cake.

The bonus will be that material might be easier to source and there will be more businesses that you can collaborate with.

But also for these resources, there will be more competition.

Scenario 2:

5.000
10% of the population with a gym membership 500
500 / 1
500 members per gym

If you are the only fitness place in town this makes your life a lot easier. You can live off a broader offering, need less qualified staff and have less pressure to compete on opening times or price. I'll take the second scenario over scenario1 any day if I was to open a garage gym.

You can go into more specifics and make these analyses more sophisticated. However, at least take these things into consideration before you choose your location for the first or any further branch of your fitness empire.

Town Development

If you are choosing a location for a garage gym which is to last several decades, plan accordingly. Make a trip to the local city council and ask how the town will grow over the next 20 to 30 years. Housing estates and shopping malls don't just magically appear out of nowhere in the vicinities. They need planning permissions and founding. Some locations and roads seem to be bad now, but if you look at the housing estates to be finished around the next ten years, all of sudden this gym might be overrun with clients. This way you might get a bargain for a garage gym in a now cheap area and sell for a profit at a later stage. Or just nudge up the membership fees.

Memberships

Think long and hard about your membership fees and how you want to collect them. This is the lifeline of your business and so many gym owners are poor at collecting what they owed. This is also why many gyms fail and the chains succeed so often. While the service at PLanet fitness is poor they make damn sure that they collect their fees from anyone. Have a hard look at:

Cash payments
Contract lengths
Auto-renewals
All you can eat subscriptions
Access to personal trainers
Extra services

Do you really want to accept cash payments? Cash payments are hard to track and eave you wide open for

Members not paying in time, some forget it, some take advantage
Staff collecting cash payments, but not putting them on the books
You forgetting to put payments on record and not reporting it for tax/refunds
You double charging people

Even though you think you might want to save by not getting a proper check-in and card reader system you might want to think twice about that. If the only source for income for you is charging people to go through the front door, you better take control of that front door. Not investing in a proper system right from the start and getting your members used to it is pennywise and pound foolish.

Think about contract lengths and discounts. Everybody loves a discount. Your business likes cashflow. Give people the option to sign up for longer-term and getting a discount in return. Have 30 - 60 - 90 - half year and year plans to match the subscription term.

Scenario 1, No systems, cash in hand:

"Hi there, I am [Your name]. Are you just checking us out or are you looking to join"

"I am just having a look thanks"

"Ok cool, classes are at [your times] and membership is $100 a month. You can pay in cash whenever you want"

This is a great way to lose control of your business.

When is this person going to come back?

When will they pay?

What classes will they attend?

What goals do they have?

How will you measure success?

Will you remember whether they have paid or not?

Scenario 2, Some system and card payments [remeber, cash in hand is still an option here...]:

"Hi there, I am [Your name]. Great to see you here, what is your name?"

"Hi, I am Janet"

"Glad to meet you Janet, would you have some time or are you just dropping by"

"I am just dropping by and wanted to have a look"

"So, what do you think"

" I think it looks good but I am not sure whether I have the time/money/discipline to join a gym"

"I see and understand most of our members start out like that. we have programs that reach from thirty 30 to a year depending on your goals. We usually sit down with you and make a plan in a free consultation. When would be a good time?

"Thursday evening would be great"

"OK great I'll meet you here at the door at 19.30, would that suit"

"Cool I see you there"

In this scenario, you have control over when the person is coming back, what program you will plug her into and you can get the card reader out and get her on the system during the appointment. Even though formalities can be scary ultimately you will be judged on the results your clients get from your gym. If you don't have control over their progress, how will they see you as a value add in the process? They might as well exercise at home.

Target group

Think about your target group and whom you want to attract. Will your gym be for everyone? In that case, you better make sure to have a lot of machines and different classes on the menu. Will you solicit more to yoga and meditation enthusiasts? In this case, you can save on machines for heavy lifting and use the space for an extra library with teas where people can hang out after their training. Think about whom you want to attract and what they might like for their classes.

Finance plan

A good financial plan and having control over your numbers will help to run a successful business and get a loan when one is needed. The most likely time you need a loan are:

Opening your first gym
Expansion
Tough times

Think about each of these and how the numbers would pan out. It is way easier to approach a bank for a loan when you can exactly explain why you are contacting them now and how long you foresee a repayment tot ake rather than presenting a case that is completely out of control just asking for a number you randomly picked out of the sky. Just put yourself in the shoes of the bank. Whom would you be willing to lend more than $50.000 and what would they need to bring to the table to convince you to do so?

Summary

Opening a garage gym is easy. Just open your garage to the public and charge nothing. The better question to ask is how to open a successful garage gym. To be successful your garage gym has to stay at least open. This means you need a salary and costs have to be covered at least when the year is done.