Opening A Gym Requirement #3) Choose a Location

The third requirement is obtaining an excellent location. A gym in a large, high-earning community with access to many wealthy clients will out-perform a gym in a smaller, more impoverished community. However, several low-cost gym chains in the U.K., such as Pure Gym, have shown that cheap gyms can be wildly profitable.

Moreover, the total costs of the rental space can impact your bottom-line profits. If you only have to pay $1500/month to rent a 1500 sq. Ft space for the gym, you can keep a lot more of your profits than if you have to pay $4000/month for a gym of a similar size.

Rental Costs

The gym can be as small as 800 sq. Ft and larger than 10,000 sq. Ft. for a top-notch luxurious gym. No State or Federal laws regulate the size of the gym. However, the rental budget can have a significant impact on your bottom-line profits if you don’t take into account the cost-to-size ratio of your gym. 

Note: You don’t have to rent commercial space, as many residential condos can convert to gyms. In many cities where space is tight, people rent large apartments or entire floors and convert them to gyms. However, most gyms rent commercial spaces in shopping plazas, office buildings, malls, and similar locations.

Anything between 800 sq. Ft. up to 10,000 sq. Ft. is suitable for a gym.

The gym has to have a large workout area, toilets, showers, locker room, lobby, and storage area.

If your space is tight, you might do away without showers and locker rooms, but most gym members will expect these conveniences at the least. 

In the lobby, you’ll need 2-3 benches where people who are not members can rest and wait for their friends/relatives until they complete their exercise.

The toilets might have to be separated by gender, which means you’ll need double the allocated space for them.

Also, many municipalities require licenses for shower installations. If you plan to change the layout of your gym, you’ll have to consult your local city administration for permission. 

Unless you rent a fully decked-out gym that someone else prepared, you will have to do this on your own. Getting permission from the city might take several months, so prepare your paperwork in advance.

Population Density

Many people will join your gym out of convenience, not because you priced your membership lower or your equipment is better. Gyms are the most successful in high-density areas that have many people interested in fitness. If you open a gym, always take into account the general demographics of the location.

The most crucial demographic stat is the town’s population density. You want to place your gym in a dense area that is always growing in population. The least you should settle for is a small city, while gyms located centrally in suburbs of major cities or urban cores tend to perform the best.

Try to place your gym in a community with at least 50,000+ residents.

Ideally, the gym should be in an area that has 50,000-100,000 residents within a 5-minute commute to the gym. If you place your gym in a rural area, you will have difficulty to break even. If the gym is in a super-dense area, you will get members even with all the competition near you.

It is inevitable that out of millions of residents, dozens or hundreds join your gym out of convenience. Keep in mind that your proximity to other people will be the deciding factor in how successful it is. Even if your equipment is not the best, or your marketing strategy falls short, your location by itself could drive dozens of new clients each month.

Commute Time

American cities are for cars, and the closer your members are to your facilities, the more your membership will grow. There are different rules for commutes in suburban and urban areas, though. 

The main rule of thumb is that your members shouldn’t take more than 10 minutes to reach your gym. Think in terms of minutes instead of distance.

Almost 90% of your clientele will consist of people within a 10-minute commute from your gym. Use time as a measurement when you calculate how convenient your location is to clients.

Always take the prime time for commutes as a measurement tool when you calculate how reachable your location is. Primetime means peak times between 6-8 am and 4-6 pm when people are coming back from work, during business days.

To test this yourself, get in your car and drive to the edge of the community. Try to see how fast you reach your gym during these peak hours. If it takes you 5-10 minutes, you will have the whole area covered. This ease of access allows you to market to nearby residents and establish your gym as the main gym in the area.

Many gyms are in urban areas where vehicular commute time is irrelevant, but the walking distance is essential. If you open a gym in a dense city such as Chicago or New York City, you want to calculate the walking time your target audience needs to reach your gym.

Even if the market is super competitive, your location in the city will make you stand out and allow you to attract customers over gyms without visibility.

Income/Demographics

The final element you want to consider aside from location convenience is the general demographics of the area. If your gym is near an elderly area with a lot of retirees, it won’t attract as many members as a college-aged area with a lot of new families. 

The age, marital status, education levels, and household income can significantly impact the success of your gym.

If you look up the town name on Wikipedia, you should be able to get a general idea for the demographic stats of the area. Each article will also contain the average household income, letting you know about the kind of opportunity you have. The higher the household income, the more people will be into fitness.

Pro Tip: The average American gym member makes $75,000/year. Gym members are some of the highest-earning citizens in the country and placing your gym near a high-earning community is an excellent way to ensure success.

If the household income is below the poverty line, typically less than 10% of residents express an interest in fitness. This percentage can be more than 50% in high-income areas. Keep in mind the income disparities in your city and how certain areas can prove more successful for your gym.

Income level of the community will not only affect your rents, but it will also affect your membership fees. If you place your gym in a stable middle-class area, you can easily charge the national average of $50-60 per month for membership.

If your gym is in a high-earning area of the city, you can easily increase that to $60-$120/month. The more people earn, the more they can afford to spend on their health. They also exhibit a higher interest in wellness and fitness, which naturally drives clients to your gym.