You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your boutique gym. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a boutique gym?
Your costs will be determined by your location, type of workout program offered, and equipment and machinery needs. Depending on these and other factors, you could spend anywhere from virtually nothing, all the way up to one million dollars in startup costs. A realistic middle range might be $25,000-30,000.
For instance, a barebones operation might involve you running a small boot camp class a few times a week in an outdoor public access area, such as a beach or park. If your workout primarily consists of calisthenics, running, and other cardio drills, your only equipment needs might be jump ropes, stretch bands, and lightweight dumbbells. (Don’t even attempt this approach unless you live in an area where the climate is conducive to frequent outdoor training.)
On the other end of the scale, you could offer only state-of-the-art stationary bikes, treadmills, and lifting equipment, with surround-sound music and an upscale juice bar for after-workout mingling, in a newer building in a high-rent commercial district.
Here are a few of your leading expenses, regardless of your exact gym type.
- Space rental – This will depend on the city, but can run $4,000-5,000 a month for 3,000 square feet. Don’t skimp here, as your members won’t want to pay top dollar to attend classes in a too-small space, or a questionable part of town.
- Equipment – Again, this is highly variable, but can run from a few thousand dollars for several sets of dumbbells, to hundreds of thousands of dollars for the newest and most technologically advanced exercise machinery.
- Liability and other insurance – You’ll want to make sure everyone signs waivers (here’s an example), but you’ll still need liability insurance. You can find out more about gym insurance coverage needs and costs here.
- Employees – For starters, you might be the sole employee, so either have savings so you don’t need to initially pull any salary from your operation, or figure your minimum needs. If you have a head trainer, this person can be an independent contractor on commission (like 25% of membership fees) to motivate his or her sales efforts. Sessions can be led by trainers, who are also independent contractors and get paid about $20 per one-hour session.
What are the ongoing expenses for a boutique gym?
Your largest ongoing expenses will tend to be space-related: rent and utilities. It’s important to keep workout spaces at a comfortable temperature, no matter how hot or cold it is outside. In many places, $500 per month for utilities might be typical.
Your employee costs will depend on your weekly number of classes, and their scheduling. At first, you might want to try to schedule classes in such a way that you can handle the training yourself for most or all of them. This will significantly cut down on your operating expenses.
Also, figure in costs for inventory if your gym offers smoothies, healthy snacks, coffee, or merchandise.
Who is the target market?
In general, your members want to improve their health, appearances and/or lifestyles, and are passionate about fitness. This is apparent in their willingness to take direction, show up for scheduled classes and pay more than what standard gym membership might cost in your area.
Since boutique gyms can be much costlier than conventional health club memberships, you’re likely to attract an upscale clientele, along with members who simply feel that the cost is justified. Your customers likely prefer forming a community with like-minded members rather than working out alone, and will help you recruit new members with positive word of mouth.
How does a boutique gym make money?
Your main source of income will be memberships. You’ll sign up new members to six-month or one-year contracts, for rates that will likely be higher than gym memberships in your area—perhaps $100 a month or more. A smaller number of specialty gym owners charge on a per-workout basis. However, this fee schedule doesn’t encourage participation as much as a monthly payment, which is owed regardless of attendance.
Some boutique gyms also sell nutritional juices or smoothies, or offer coffee and healthy snacks after workouts for additional revenue streams. Some also have small gift shops where logo t-shirts, towels, or other apparel can be found. Other services can include childcare during workouts and nutritional guidance.
How much can you charge customers?
If you can figure out what conventional health clubs cost in your area, use this as a starting point. You can charge a higher rate, based on the fact that your programs are more personal and expertly led. While people in your area might not spend much more than $30 monthly for traditional health club memberships, they might spend three times that amount for the services, environment, and peer group you offer.
How much profit can a boutique gym make?
Here are average revenue figures for clubs large and small in 2014.
How can you make your business more profitable?
Consider the whole range of your customers’ needs. If their goal involves weight loss, for example, you might offer the expertise of a nutritionist to prepare meal menus. You might also consider exploiting a small but underserved niche in your community. For instance, one boutique gym only serves pregnant women, offering a range of exercises and nutrition advice that’s safe and effective for that distinct group. The better you know your target audience, the more ways you can find to provide the solutions they need. It will keep your group loyal while providing a steady revenue stream.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your boutique gym is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a boutique gym. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Boutique gyms may also wish to look into applying for a resale certificate, if they plan on selling refreshments or other items, as a resale certificate allows retailers to purchase goods intended for resale without paying sales tax.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources
It is advisable to provide clients with informed consent agreements to decrease legal liability and encourage transparency. These agreements are necessary because clients may be exposing themselves to potentially dangerous equipment/physical exertion. Here is an example of such an agreement.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your gym when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
In order to play music in a business setting, permission must be acquired from the composer or license holder. The easiest way to do this is to obtain a “blanket” license, allowing your business to play music owned by a large catalog of artists and recording studios. Such licenses can be acquired from performance rights organizations, such as ASCAP or BMI.
Labor safety requirements
It is important to comply with all Occupational Safety and Health Administration requirements. Relevant requirements include employee injury reports and safety signage, among other important standards.
Certificate of Occupancy
A boutique gym is generally run out of a studio. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a boutique gym.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your boutique gym will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a boutique gym
Social media is critical. Have a Facebook page and an Instagram account, at the minimum. Let prospects hear from members who are like them, and show plenty of photos promoting the equipment, as well as the cleanliness of the space.
You might also consider renting a booth during health expos, though the cost can be $1,000 or more. That’s steep, but you might achieve payback with just one or two new members who stick around for a year.
Some marketing efforts are as simple as leaving flyers on windshields, or on bulletin boards at coffee houses, shopping centers, and schools where your prospective members might be found.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
How many people do you know who have made a New Year’s resolution to get in shape, only to abandon the goal by mid-January? Many of your members sign up because they know they need the support of a professional trainer, and a community of like-minded peers. Create that community experience for your customers, and they are likely to stick around.
Provide interested members with a free trial, lasting a week or two. One boutique gym manager said that she was able to retain about 67% of prospects who accepted a trial, and attended at least three or four classes.
Also, encourage positive feedback and word of mouth. Offer membership discounts, or free/discounted products and services (perhaps a complimentary t-shirt, or $25 in smoothies) to anyone who gets friends to sign up.
And finally, really listen to your members. Are they finding a class that comfortably meets their schedule? Is the program received positively? Make sure you solicit their true views, and you’ll be less likely to lose them when their contracts expire.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Boutique Gym In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
You must be able to do much more than provide a facility and equipment. You need to be passionate about the activity you promote and lead, and have the ability to relate to customers of all athletic skill levels. You and your trainers will be coaches, instructors, motivators, counselors, and cheerleaders. If done right, you’ll get results for your members, retain memberships, and build positive word of mouth.
You’ll also be your own best advertising for your facility. Your own appearance is a billboard. So if you’re providing powerlifting programs, you’d better look like a lifter. If nutritional programs are part of the offering, make sure you’re trim and healthy.
What happens during a typical day at a boutique gym?
You might have six to ten scheduled classes each weekday, and a few more on Saturday. That means you and your team will likely have workdays that start early and end late. Here’s how your daily activities might break down.
- Leading classes that could start as early as 5:30 a.m., depending on the availability of your members
- Hiring, training, and supervising your head trainer (if that’s not you) and part-time trainers
- Managing the juice bar, coffee shop, daycare facilities, or other related member services (if any)
- Soliciting new members, especially during class downtimes
- Cleaning equipment, restrooms, food and beverage areas—a critical concern of members
- Managing social media to communicate with existing members, and to attract new signups
What are some skills and experiences that will help you build a successful boutique gym?
You should have ample experience with training in your chosen area, and the ability to draw out the best performance from your trainees. The job also requires strong sales skills, since you’ll regularly need to recruit new members. You should also have certification as a personal trainer, and CPR certification. You can find out more about trainer and nutritionist certifications from the American Fitness Professionals & Associates.
What is the growth potential for a boutique gym?
Growth is possible through the operation of additional classes, through greater participation in existing classes, and by establishing new facilities in locations with high growth potential. Be cautious about taking on too many members per class. If you lose the sense of individual instruction and shared community, you could lose members.
Check out this Market Watch story about boutique gyms that became so successful, they’ve gone public and added multiple locations.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a boutique gym?
It’s all about attracting new members, and retaining them. With that in mind, schedule classes at times that appeal to individual groups. For instance, one boutique gym in Raleigh, North Carolina, would attract an early shift of healthcare workers to 6am classes. Then, mid-mornings would be geared to mothers with young children (while schools were in session), a mid-afternoon class for teachers who were finished for the day, and early evening classes for office workers. In this way, they could fill classes throughout their workday, and use downtime for marketing the gym.
How and when to build a team
You’ll build your team as your membership grows. Try not to offer many sparsely attended classes, or you’ll be forced to pay a trainer even if a class only has two or three participants. On the other hand, don’t let your classes get too crowded just to avoid hiring new talent.
It’s easy to figure your earning potential and need for additional help, based on class size and monthly membership fees.
Read our boutique gym hiring guide to learn about the different roles a boutique gym typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.