Opening A Gym? If you are looking to open or want to open a gym there are so many things to consider. Making the wrong decision on such things like equipment purchases, lease, location, etc. could negatively affect your business and it could be the difference whether you make it or not. With that said however, most gyms fail. That’s right. Most gyms fail. The main reason is poor planning, not enough research, the area had no need, poor leadership, low member retention, no unique programs or selling points, and no marketing. Today we will focus on finding the right location and negotiating a commercial lease Fitness Reserve.
OPENING A GYM | Finding the right location
Finding the right location is the key and you want to make sure you do a lot of diligent research on the areas where you want to setup your gym business. Putting some “Boots to the Ground” is highly recommended. Grab a pen and a notebook and drive around the areas you have an interest in. Make sure to get the address, agent’s name, and phone number. Another way to look at what’s available in your area is an online service called Loopnet. Loopnet lets you research the commercial lease space that’s either for lease or sale in your area. The average gym is 24 hours and 5,000 SF. Checklist for opening a gym location:
Visibility- having a location easily spotted from the road in a heavy traffic area is the key. You want to make sure you are in an area that promotes walk-in foot traffic. Walk-ins makeup a big part of your gyms success and they are usually more likely to join your gym on their first visit.
Parking- make sure there is plenty of parking for members, guests, and staff. Make sure the parking lot is easily accessible to get in and out of during high traffic times.
Lighting- if you are considering the twenty-four hour model then bright lighting for safety is a must.
Costs- costs include rent, security deposit, and the cost of the buildout.
Need- are there any other gyms in your desired area and are your programs unique? Is your gym different?
Once you determine the best area for opening a gym it’s then time to negotiate the lease with the landlord. The three main things to negotiate on a commercial lease when opening a gym are:
The Rent – The first thing you want to do is negotiate the square footage price on the lease. For example, if you want to estimate the rent for a 5,000 Square Foot Building that’s listed at $10.00 SF plus CAM charges or NNN. You simply multiply 5,000 SF x $10.00 SF = $50,000.00 divided by 12 months = $4,167.00 per month for rent plus CAM charges. CAM charges are Common Area Maintenance charges. These are additional charges to cover additional charges the landlord must cover for insurance, parking lot maintenance, snow removal, etc. For this example we’ll say they are an additional $2.00 SF. You would then multiply $12.00 SF x 5,000 SF which equals $60,000.00 divided by 12 mos. would make rent $5,000 per month with rent and CAM charges. This is the first thing to negotiate when opening a gym and it could have a huge impact on you and your business. For example, if you were to be able to negotiate the lease to $8.00 SF for rent with CAM charges for a $1.00SF then you would pay a total of $9.00 SF x 5,000 SF = $45,000.00 divided by 12 would make rent a total of $3,750.00 per month. Getting a lower rent in this example saved the new gym owner $1,250.00 per month or $15,000.00 for the year.