How to Make a Gym Profitable: 15 Top Tips to Help Your Fitness Business Succeed

The fitness industry is a competitivex one, so be smart about spend to pump up your profits

Opening a fitness studio or gym is a dream of many fitness enthusiasts but turning your dream into a profitable enterprise—or even franchise—is another matter altogether, even if you are lucky enough to have landed a prime location and have stocked your fitness facility with top-of-the-line fitness equipment. The fitness industry is a notoriously competitive one, which makes it essential to have the right toolkit and business know-how to run your gym business successfully and, ultimately, profitably.

Whether you’re looking to open your first gym or a veteran gym owner looking to increase your profits, we’ll break down some of our top tips on how to run your gym effectively, sustainably, and profitably.

1. Find the Right Location for Your Gym Business

If you’re thinking of opening a new gym, the location of your gym could be the most important decision you make. When you consider where you want your gym to be, there are many factors that can impact not only how many people hear about and join your gym but also how much you’ll pay for rent, utilities, and more.You have to consider the location today as well as what it could look like in the future. Additionally, your market research may show that your ideal location for a gym in a strip mall might not be as appealing as a gym located near a large park or school.Understanding the local community’s fitness needs and preferences is also essential in terms of what facilities you develop or the types of classes you promote. For instance, if your community has a strong interest in outdoor activities, make sure that their needs are reflected in the facilities and classes you offer if you want to capitalise on the demand and stand the best chance at making the most profitable investments in facilities, equipment and staff.

2. A Successful Gym Business is Built Around Hiring the Right Staff

Clubwise | Hire the right staff to become profitable It is the people you hire who can make (or break) your gym and keep your members coming back. Your gym’s profitability and long-term success will depend on your gym members staying with you, so gyms that offer excellent customer service are more likely to rank higher in terms of member satisfaction and, thus, more loyal customers.
Hiring the right gym staff is essential if you want to create a positive, motivating environment, so make sure that you account for your candidates’ personalities and work ethic, not just their qualifications. Examples of this might be positive energy, excellent communication skills, the ability to listen and be dynamic, adaptable and good at problem-solving.

Certifications are also important when considering your candidates, so ensuring that your staff has accredited qualifications—from reputable sources—will give you an indication of which candidates have the knowledge, practical skills and commitment to being valuable assets for your fitness centre.

Having a diverse range of skillsets is also important if you want your gym to offer a range of services and specialised classes. For example, offering group classes, personal training sessions, HIIT classes and nutrition coaching are all examples of additional services that can boost the profitability of your gym, but you’ll need to ensure that your staff has the right training, characters, and experience to run them successfully.

3. Price Your Gym Memberships Effectively; Offer Diversity and Add Value

Clubwise | Market your gym to be more profitable Offering a variety of gym membership packages and pricing your gym memberships effectively is pivotal to ensuring that your gym business is successful.
Before determining your pricing, make sure that you conduct some market research to understand your local competitors, the value proposition of your gym, and the target audience you want to attract, as this will form a strong foundation for yourpricing strategy.Offering diverse membership packages can be a great way to attract a range of different members, as you’ll be able to cater to different budgets, needs and fitness goals. If you offer tiered memberships, make sure that you’re also delivering increasing levels of value for your members, not just increasing levels of cost to their bank accounts. For example, a basic or “bronze” package might include access to only the bare essentials of what you offer, versus a premium or “gold” package delivering exclusive VIP benefits, access to specialised classes and free personal training sessions.

When it comes to your membership terms and conditions, transparency is often the best policy to prevent misunderstandings and build a positive member experience, so make sure your membership fees and terms are clear. Digital features like in-app joining can make this ultra-convenient and simple for your members to onboard, and offering flexible payment options and contract lengths will also help to cater to different preferences and financial circumstances. If you’ve defined a successful pricing strategy, this can also help you to upsell members onto longer-term plan (more cost-effective for them, more revenue for you!) if they can easily see the advantages and value of doing so, making it more profitable for your gym when you do convert a new member.

4. Marketing and Branding Strategies Are Crucial for Attracting the Right Target Audience

Establishing a strong brand presence is crucial to the profitability of your gym. After all, many (if not most) of your members are likely to gain a first impression of your gym business online if it’s easier to Google search for “gyms near me” than it is to walk or drive to your physical location.Investing in a professional logo, website and promotional materials are all great ways to create a good first impression for your potential members, but you’ll also want to support this with your marketing efforts on social media, email campaigns, local advertising and even paid advertising (if you have the budget to support it) to expand your reach and increase your gym’s visibility.When considering your marketing strategy, you’ll need to have your target audience top of mind if you want to target your potential members effectively. For example, your paid advertising campaigns are unlikely to be successful if you’re targeting people who live far away from your gym, just as having a strong brand presence on social media may be more likely to attract members under 60, as this is where more of these potential members are likely to “hang out.”

If you’re looking for advice around marketing techniques, social media and paid advertising, make sure to check out our free e-book guide, Everything You Need to Know About Marketing Your Fitness Club..

5. Create a Sales Funnel to Help Convert New Members and Keep Existing Members

Clubwise | Retain members to make your gym more profitable Your gym might have the most incredible marketing strategy and resources in the world, but it won’t mean much if you’re not able to convert your “leads” or “prospects” into paying gym members. Creating a sales funnel is a great way to increase your gym’s profitability, as you’ll gain a much better understanding of how, where, and why your prospective members become paying customers. After all, if you don’t know how they came through the door, you won’t know what your most profitable marketing channels are, any potential blockages in your “funnel,” or what factors into sealing the deal of becoming a member.
For example, at the top of the funnel, you’ll be generating additional awareness of your gym through your marketing efforts, partnerships and advertising. Once your prospects know you’re there, you’ll want to capture their interest through things like informative blog posts, virtual tours, and free trials. Once they’re interested—say, they subscribed to your monthly newsletter—you’ll move them further down the funnel by nurturing their interest through personalised emails, promotions and engaging content. When they’re ready to close, make sure you reinforce their purchasing decision with exceptional customer service, objection or question handling, and an easy joining process to convert them into new (and happy) members.

When done correctly, a sales funnel will not only show you where and how to optimise your funnel to increase the number of members you convert but also enable you to create accurate business forecasts for the future. This will give you a better idea of your pipeline and plan your investments based on the amount of revenue that is likely to be generated each month and a better chance to grow profitably.

6. Membership Retention Strategies Are Key to Increasing Your Profits

Member retention is the cornerstone to profitability for your gym; after all, if you have a leaky sales funnel, you’ll need to invest time, money and resources into continually topping it up instead of focusing on the other areas of business development. Having an army of loyal, paying gym goers is essential for the cash flow of your business, so make sure that keeping your customers happy is as much a priority as bringing new members through the door.

There are many ways to boost your gym membership retention levels, but meaningfully engaging with your customer base is likely to make the most significant actionable impact. Personalising the gym experience to each members’ fitness journey, providing regular check-ins, using simple but meaningful communications with your members and listening to (and acting upon) member feedback are all great examples of how you can easily engage with your members, understand what does and doesn’t work for them and keep them renewing their memberships and referring their friends and family.

Showing that you’re invested in their success can also be a powerful tool to foster a sense of community amongst your members. To do this, highlight their success stories and recognise milestones to show that they’re part of something bigger than themselves. Showcasing achievements can also boost morale and inspire other members to stay dedicated to their goals, in turn making them more likely to stay with you and extend their memberships.

7. Incentivise Your Members: Member Rewards and Loyalty Programs

Clubwise | Clean gyms are a must Who doesn’t love an incentive? Answer that, and you’ll understand how member rewards and referral programs can be a game-changer for boosting your retention rates and profitability. By cultivating a sense of belonging and appreciation, you’ll be showing your members the true value of being part of your community, making it attractive to stay longer and turning them into positive advocates for your gym.A referral program can be an extremely powerful tool to increase profitability, as your happy members will have an additional incentive to refer their friends and family to your fitness business, and their positive testimony can drastically improve their likelihood of converting into paying members, as well as keep them a loyal customer for longer.In fact, a recent report cites that referred customers are 30% more likely to convert and boast a 37% better retention rate. It’s no wonder, then, that according to our recent report, over half of the profitable gyms we surveyed have a referral program in place because it’s a tool which is shown to be extremely effective at increasing your profits without having to invest a lot of capital into acquiring new customers via other marketing channels.

8. A Well-Equipped Gym is Nothing Without Maintenance and Cleanliness

Having state-of-the-art gym equipment won’t mean much to your members if your equipment is poorly maintained and they’re constantly being distracted by dirty floors and bad odours. Yuck! Keeping your gym floor in a pristine condition not only makes your gym look more inviting but it also reduces the risk of infection and illness. After all, if your members are constantly sick, they won’t be in your gym and spending their money at all.

Beyond just the aesthetic reasons for maintaining your gym, regularly maintaining your equipment will extend the lifespan of your facilities and save you on long-term costs, meaning that investing in the short term will pay out profitably for your gym over time.

This also extends to your gym layout. Allocating space based on the popularity of different equipment and ensuring that your members can move easily throughout your fitness centre will vastly increase their enjoyment of their gym experience. You don’t want your members to have to sit in traffic jams or constantly be unable to superset between machines, so make sure you don’t put them in that position by paying close attention to how members interact with your equipment, too.

9. Make Customer Experience a Top Priority

Clubwise | Create a profitable customer experience “The customer is king”, as they say, and they’re not wrong when it comes to boosting the profitability of your fitness club. Focusing on customer experience and making your members feel genuinely valued, supported and cared for will drastically increase their commitment to their fitness journey and their gym memberships, increasing their likelihood to renew and giving your business a consistent stream of revenue.Higher satisfaction rates mean more referrals for you, as well as increasing your chances to upsell your happy members onto more profitable memberships and incentivising them to invest in other additional services you offer.Providing exceptional customer service, creating a pleasant and welcoming atmosphere for your members, and training staff to be knowledgeable, approachable, and attentive to members’ needs are all examples of ways to easily improve your members’ experience and decrease the attrition rate at your gym. If you aren’t actively listening to your members and helping them extract the most from their membership, there’s a good chance that they won’t be with you for long, and what’s worse, you won’t even know why they decided to cancel their membership.

10. Incorporate Local Businesses and Additional Revenue Streams

Clubwise | Build profitablity with a tight gym community Diversifying your revenue streams can be a fantastic way to bolster the financial stability and profitability of your gym by offering members services that will add value to their gym experience, as well as your bottom line.You might want to consider retail opportunities within your fitness centre, such as selling branded merchandise, supplements or even opening a café or smoothie bar—where members can sip and socialise—to help generate additional revenue. Offering healthy food and drinks through vending machines can also help to reinforce better nutrition choices for your members, as well as contribute to your cash flow.Employing certified personal trainers to offer one-on-one sessions, offering group fitness classes or virtual fitness events and partnering with local wellness professionals are all ways that you can create additional revenue streams for your business and leverage different types of expertise and coaching styles to discover which offerings offer the most profitable and enjoyable services for your members to engage in. What’s more, collaborating with local professionals in this way can also help to strengthen your ties within the community, build trust and expand your brand presence in your local area.

11. Leverage Specialised Equipment or Services: Offer Something Different That Makes Your Gym Stand Out

Differentiating your gym from the competition by offering unique experiences, expertise and equipment can be a great strategic move to set your fitness centre apart from the competition. Offering niche services or appealing to a very specific target audience might seem counter-intuitive, but consider that if you’re trying to appeal to everybody, you might be appealing to nobody. Make your gym known for offering specialised knowledge and coaching, and you also establish it as the go-to destination for dedicated niche audiences whose loyalty will prove extremely profitable for your fitness centre.

As an example, senior fitness programs, pre- and post-natal fitness, aerial yoga and obstacle course training might only appeal to a select market but could be in peak demand in your area. Demonstrating that your club offers services that others in your area don’t offer can make it seem more enticing and exciting to potential members, even if they’re not directly interested in your speciality offerings.

On the tech side, introducing unique offerings like body composition analysis, infrared saunas, cryotherapy or recovery services demonstrates that your club is forward-thinking, innovative and offers members an experience they can’t get anywhere else, thus making your club more appealing to prospects and encouraging loyalty from your existing members.

12. Host Events and Challenges to Build Community

An engaged gym community is a happy gym community, so holding events and challenges—even if they’re not strictly focused on fitness—can be a great way to attract new potential customers as well as fostering a sense of community and support amongst your existing members. Getting your members together to forge deeper connections with each other can create a positive and motivating atmosphere which brings them together in their collective pursuit of their health and fitness goals and helps to encourage regular attendance and active memberships.Fitness challenges, for example, can provide excellent motivation for members who struggle with accountability; when they’re suddenly competing against a fellow member, it provides the extra push they might need to extract the effort they need to attain their fitness goals, as well as showing them what they’re truly capable of, or can aspire to attain. Make sure to celebrate achievements – big or small – to recognise your participants and reinforce their sense of accomplishments and belonging.

13. A Gym Owner Should Implement Effective Cost Management

Clubwise | Effective Cost Management “You’ve got to save money, to make money” isn’t the sexiest motto to build your gym business around, but careful monitoring and controlling your expenses can be an incredibly effective way to optimise your resources and ensure that your funds are directed to where there most needed.By regularly reviewing expenses and reducing overhead costs—for example, negotiating with suppliers, monitoring energy usage and cutting down on frivolous expenses—you’ll give your gym more opportunities to be able to invest in high-quality investments like high-quality equipment, top-of-the-line amenities and experienced staff.Effective cost management will also help to maintain the most competitive pricing to attract members away from your competition, as well as provide a financial cushion in case of unexpected expenses or economic downturns, creating a stable platform for growth, stability and the chance to make your gym a more profitable enterprise.

14. Collect and Analyse Data to Make Informed Business Decisions

Collecting and analysing data about your members’ behaviour, preferences and trends is an essential practice for gym operators to make informed, data-driven decisions that will give your fitness centre a competitive edge. Without hard evidence to support your decisions, you’ll simply be guessing what benefits your members, which is an easy way to make poor business decisions that impact the profitability of your club.

Once you’re able to identify which classes, services and equipment are most popular (and profitable) for your business, you can start to tailor your offerings to meet your members’ specific demands and interests, ultimately leading to a better member experience and increased profitability. Furthermore, you’ll also be able to tailor your email and social media campaigns around what you know is popular with your members, helping to shape how you position your brand and attract the right target audience who are likely to convert into profitable members.

Utilising gym management software to track member attendance, engagement, preferences, and buying habits, for example, can provide invaluable insights into how you schedule your classes and staff your gym, what types of equipment you purchase and what times, days and channels are the best ways to engage with your members to maximise your profits.

15. Gym Owners Can Easily Incorporate Technology to Maximise Profitability

In the age of technology, if your club isn’t benefiting from the insights, time-saving abilities and engagement tools that fitness tech can deliver, there’s a good chance that your business will become quickly outdated or even left behind.

Adopting an advanced gym management software like ClubWise can help you to streamline operations, track your members, manage your scheduling and even help to automate member dues collection to help you make more intelligent business decisions and leave your hands free to focus on implementing the most profitable strategies for your business. Couple this with the ability to manage your full sales funnel—from prospects to current customers—and both manage and automate your marketing communications via SMS, email and mobile push notifications, and you’ll have a one-stop-shop for engaging, managing and retaining your members, however, wherever and whenever they interact with your club.

Maximising member engagement with a member app is also heavily worth considering. It gives your members the ability to take their fitness journey into their own hands (quite literally), as well as connect with your club even when they’re not physically present in the gym. Tools like access control, loyalty programs and personalised health data can make all the difference in personalising the member experience and keeping them with you for longer.

To find out how ClubWise’s all-in-one integrated software can help you get set up for success with integrated billing and payments, club management, tools for marketing your business and access control, contact us via the link below to book your demo.

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