Part Two: Understanding The Costs Of Opening An Independent Gym
Welcome, or welcome back, to the second article in our series focusing on the costs of opening an independent gym or fitness club. As per the last article, we will be using our wealth of experience within the fitness industry to look at everything from hidden costs to where savings can be found during this expensive process.
Last time we took a look at the recurring costs, as well as looking at how some purchases could be either a one-off or recurring cost, depending on the route taken. This time we will be moving focus onto the one-off costs themselves, with a deeper dive into how even these one-off opening costs can be mitigated or diffused.
Here at Ashbourne, we’ve helped countless gyms and fitness clubs through difficult times and out the otherside. Take a look at our success stories for further proof of the impact we can have upon an independent gym or fitness club.
All that to say that we are keenly aware of the costs that any group or individual will be incurring in this venture. Our belief is to never recommend something just because it is the flashiest or the best marketed. We are committed to finding the value solutions that will put any aspirant gym or club owner on the best footing moving forward.
One-Time/One-Off Costs
When starting an independent gym or club, the big one-off purchases can feel daunting. Monthly, Quarterly or Annual costs present their own problems but it is the immediacy of the one-time costs that your new gym or club can’t do without that will be daunting.
Many of these costs will become the foundation of your new business, the bedrock that your new independent gym or fitness club is built on. As such, it is important to get it right.
Not every one of these items is going to be a silver bullet though, there is no guaranteed recipe for overnight success and we won’t pretend otherwise. But by getting the One-time costs right, you will be putting your new gym or club on the right footing.
And in our experience, this is vital. The momentum from a new gym or club opening is a rare resource, and one that should be harnessed. First impressions matter as they say, and the one-off startup costs are going to be some of the largest factors in our new membership’s first impression of the new establishment.
Day One - One-Time/One-Off Costs: Breakdown
For the purpose of this breakdown, we will be focusing on the broadstroke purchases that will apply to most gyms and fitness clubs. In a future article we will go into more specialised and specific types of club.
As we said above, this is about first impressions. When those first early adopter members walk through the doors of your new gym or fitness club, they are going to be greeted with an image. And that image will inform a lot of what happens next. Initial word of mouth can be a very positive force for a new independent gym or fitness club, irrespective of the location you are opening in. These initial one-off costs are the purchases you will be making to ensure that what your new members are seeing is not only going to satisfy the risk they took in trying a brand new gym or club, but that it is also going to make them spread the good word.
One-Time/One-Off Costs Checklist
Purchasing or Securing (usually a deposit) the Appropriate Commercial Premise
*We will do a more detailed breakdown of opening insurances but in the meanwhile see our detailed article on independent gym and fitness club insurances here.
**As covered in the previous article, Gym Equipment was our example of a flexible One-Time/Recurring cost depending on payment structure.
***These can sound daunting, for more on this our demonstration team can help answer questions.
This is just the basic checklist, the full contents for various different gyms and fitness clubs will naturally vary. Which will be our focus in the next article.
So what are they going to see first? Well, there will be the front of the building and then the first sights that greet them at the door. A well-lit lobby or reception area does wonders. Obviously the commercial properties in the area/areas will impose certain limits, as will the amount of money that can be set aside for renovations and redecorating.
And then, of course, there will be staff. The members of your team that will provide a vital part of the service and atmosphere. This section represents a significant number of the items on our list. Whether it is uniforms, recruitment costs, initial wages, training. In addition there may be certifications that are required.
After that comes the infrastructure they will use. This includes any digital systems, the physical computers, payment systems, operational access controls.
Then there’s gym equipment. Your members expect treadmills, exercise bikes, running machines, free weights… Some of these can be leased. If you’re buying outright that’s another one-off cost to consider.
What else would you expect to see? Team members. They need to be hired and hiring costs money. And they need to be uniformed and uniforms cost money. Plus they need computer systems, payment systems, insurance, and maybe licences too.
All these things need to be paid for before you welcome in your first members. And can therefore be considered the up-front costs of opening your gym. That means you’ll need funding in place, whether it’s from investors, loans, or your own savings.
Next Time
Unsurprisingly, this brings us to the conclusion of this article.
The checklist might appear daunting at first but many parts will start to fall into place. Especially with the right partners. While we will be focusing on the different requirements of various gyms and clubs next time, there is plenty that can be done in the meanwhile.
Here at Ashbourne, we are able to help with large swathes of the above checklist, especially when it comes to membership management software, access controls and equipment. We have helped countless new and established independent gyms and fitness clubs create systems that function effortlessly and just as importantly, will last.
So whether you are thinking of setting up a new gym or club or in the process, we want to hear from you. Our professional and trained demonstration team is ready and able to help any gym owner or aspirational gym owner get their fitness facility up and running in no time! If we have piqued your interest, click here to find out more.
Get your club in shape.
Want to discover how? Let us show you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Part One: Understanding The Costs Of Opening An Independent Gym
In today’s blog we will be looking at a question we have been asked a lot over our twenty five years of experience in the fitness industry. That being “What are the costs of opening an independent gym or fitness club?” It is a short question that leads to a lot of answers. So today we will start looking into the main costs to expect, how these costs will vary depending on the size and type of the gym and much more.
We will include distilled insights from many of the gym and club owners we have worked with over the years to ensure that any reader comes away better prepared if they embark upon their own gym venture.
Budget is a term we are hearing everywhere at the moment, whether it comes from consumers seeking value for money or businesses trying to make their resources go a little further.
Unfortunately the pressures of the general economy will feed into the setup cost of any independent gym or fitness club. However while it can feel like a time of risk, this can also mean it is a time of opportunity.
The last few years have seen a large shake-up across many industries, including the fitness industry.
The core price of opening a gym or fitness club will vary significantly depending on the size of the facility, the area, scope, required expertise of employees and so much more. While we will get into more detailed figures either below or in another article, we can attest that unless you are inheriting an already functioning/functional operation, the sum will be substantial.
Of course there are certain things that can reduce this price, or conversely, add to it. The difference between opening a purely independent gym and opening one that is part of a franchise (a difference we will cover). We will also overview the different type of costs, whether it is ongoing and expected costs, potential ‘shock’ costs and expenses that will only affect certain types of gyms.
All this to say that if you are thinking of opening an independent or franchise gym or fitness club, financial depth is a significant asset. This article can make you aware of the potential pitfalls, but awareness isn’t worth a lot if the funds are not there to cover the expenses.
As such, we would always recommend a comprehensive idea of the risks and potential costs. A checklist can be invaluable for keeping track of these pitfalls (and is something we may cover in a later blog if the uptake is there).
To be forewarned is to be forearmed, and here at Ashbourne we believe in supporting independent gym and fitness clubs however we can. Please don’t hesitate to reach out to us if there is something missing from the guide that you would like to see.
Recurring Costs
Recurring costs are some of the most important to factor in when starting a new independent gym or fitness club. These are the costs that it is important to get right. Because if not, it is going to be a pain felt every month, or every quarter or every year. And that will quickly mount up and sap momentum and money from the venture. These costs are the ones that will be necessary to keep everything running smoothly. They are the sort of costs that neither your staff nor members will pay much attention to unless they are suddenly absent. Everyone expects functioning access controls and clean bathrooms but not many people spend time thinking about the maintenance personnel and their costs.
Recurring Costs Checklist
Gym Membership Management Costs
Marketing Budget
Gym/Club Operating Software
Gym/Club Equipment Leasing*
Facility Costs (Leasing/Rent etc)
Wages
Accountancy Fees
Health and Safety/Compliance Costs
Taxes
Ongoing Training
Maintenance Costs (Inc. either Staff or Third Party Fees)
Loan/Interest Repayments
Multiple types of Insurance**
Miscellaneous Supplies
Specific Costs Associated with Gym/Club type
*Equipment and other costs that are potentially either one-off or ongoing to be covered below and developed in a further article.
**Insurance covered at length elsewhere. Will be linked in a later article on Insurance.
This is the same when it comes to all aspects of gym membership management. It is a classic case of ‘if it is going right, people won’t notice you’ve done anything at all’. This is the curse and the blessing of providing service to members. They want a painless, sleek and professional gym membership where access control, entry verification and payments are all handled seamlessly. But if they have to stop and think about it, the chances are this service isn’t being provided. As such, it is all the more important when establishing a new independent gym or fitness club to get these recurring costs correct. Any new members trying out a new facility will quickly have their goodwill degraded if the fundamentals are not there.
Members can be understanding during the initial setup of a gym, but if they sense that some core aspect of the operation is not working, that will be a significant blow to retention rates.
Recurring Costs or One-Off Cost?
Inevitably there will be costs that can fall into either category, depending on the route taken and how the payment is structured. The one highlighted above is Gym Equipment. This is an area where there is a divide, some new gyms and clubs lease gym equipment initially to save on the upfront costs. This is a valid approach, opening a gym is cost intensive enough and there will be areas where it will be tempting to spread the costs.
Of course, in turn, those leased machines will often turn out to be more expensive than buying them outright. Even if by some combination of support and maintenance it ends up being a relatively favourable outcome, it will still represent a recurring cost instead of a one-time opening cost.
At a certain point some of these decisions will become one of necessity. What can be afforded immediately, what cannot. As with any business, it will be about understanding what is a good investment and what is not.
This is why planning and risk assessment is so vitally important before any large business venture. Understanding the lower and higher estimates of how much money is going to be coming in and where it will stand in relation to recurring costs and any potential loans or invested money.
What Next?
In our next article we will be focusing on the one-off costs with another checklist to follow. As this series continues we hope to build up a comprehensive guide for any aspiring gym or fitness club owner to be able to reference during the process. As you might have gathered, there is a lot to cover and we are in a good position to cover it.
Here at Ashbourne we’ve been working with independent gyms and fitness clubs, as well as small franchise gyms for over twenty five years. The above is just a small fraction of the expertise we have accumulated in that time.
We have helped countless gyms and fitness clubs with everything from membership management, non-payment collection and direct debits to access control, marketing and website building. We believe we have something to offer every gym or club, whether you are recently established, still setting up or firmly entrenched in your local area.
So if you are setting up a gym or fitness club, or have recently started one and are keen to know more, please don’t hesitate to contact our demo team here. They will be able to talk you through what Ashbourne can do to give your business the best start or take it to the next level.
Get your club in shape.
Want to discover how? Let us show you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Here at Ashbourne we have covered a lot of the fundamentals of running an independent gym or fitness club in these blogs, leveraging our 25 years of experience to ensure that gym owners, management and staff have easy access to high quality resources on a variety of topics. But for the most part, they have been focused on what happens inside the gym, whether it is to do with infrastructure, software, access controls, membership retention, social media engagement or a host of other topics. Today we are looking at something that trends towards being a little more abstract. Insurance
Perhaps if Benjamin Franklin (or the person he was most likely quoting, Daniel Defoe) was alive today and had to set-up a business, he would update that transcendent quote on inevitabilities from ‘Death and Taxes’ to ‘Death, Insurance and Taxes’.
Because while Franklin was an advocate of insurance and even started his own insurance company, it was not the all-consuming industry it is today. His particular company was a city-wide fire insurance scheme for Philadelphia. A far cry from the government mandated multi-billion pound industries of the 20th and 21st century.
But now, as then, sensible people like Franklin advocated for insurance because it made good and responsible sense. It may seem like an abstraction at the time of purchase but when something goes wrong (as things sometimes inevitably do in a gym or fitness club) and the protection and reassurance suddenly doesn’t seem quite so abstract.
Running a gym or fitness club is a fantastic venture, but it is not free of risk. Some of those risks are unavoidable, the sort of risk that comes with any suitably complex business venture. But others are not, and with the right insurance for the right fitness facility, independent gym and fitness club owners can enjoy a much greater peace of mind knowing that everyone involved, whether it is the staff, the membership or even the building itself, are all firmly protected.
So how does a new gym owner go about selecting which insurance will be the best suited for their gym or fitness club? Which types of insurance are required? And how many?
Well thankfully we don’t intend to pose these hard questions and then disappear, so today we will be continuing our look into the fundamentals of setting up and running an independent gym or fitness club.
Professional indemnity insurance protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered.
Fidelity Guarantee insurance (also known as Theft by Employee insurance) provides cover for loss of money and other property resulting from fraudulent or dishonest acts committed by an employee or volunteer.
Management Liability Insurance protects company directors, senior managers and officers of charities, boards and committees if a negligence claim is brought against them in court or at an employment tribunal.
Business interruption insurance covers you for loss of income during periods when you cannot carry out business as usual due to an unexpected event.
How Necessary is Insurance for an Independent Gym or Fitness Club in the UK?
While we may have tipped our hand a little early in the introduction regarding our stance on this question, the necessity of insurance is still a question worth asking. Of course some insurance products are a legal necessity to operate a business and as such are excluded from this. But others are still optional. And when something is optional, it can be a temptation for business owners to skip over or ‘do without’.
This is not to imply that gyms and fitness clubs are particularly unsafe. As we said above, these insurances aren’t just to protect members (though that is of vital importance). The insurances that we will be looking into today are as necessary to protect equipment, staff and the facility itself. Top of the line Gym equipment is a prime example of a significant expense should it become damaged. Equally, the presence of weights and water from pools and saunas is more likely to cause injury to both members and the facility than other purposes.
With everything going on in the average gym or fitness club, the peace of mind that protection can allow a gym owner is worth a significant amount.
There are a hundred things that could go wrong, opening the gym up to expensive repair bills, complex investigations or even legal action. These are the incidents that insurance is designed to protect a gym owner against and as such we would recommend erring on the side of caution.
Starting on the right foot is important, members and staff alike want to be assured that their interests are being looked after and that the gym environment they are signing up to will look after them. While an independent gym or fitness club owner can attempt to shoulder these responsibilities themselves, we would earnestly recommend that each of the insurances that we will cover today be considered carefully.
So, What Insurance is Necessary for an Independent Gym or Fitness Club?
As we said above, the right insurance is vital in order for an independent gym or fitness club owner to have well-founded peace of mind. But it is also important to consider what coverage is actually required, the budget that can be set aside to pay for the insurance and the offers available to the gym or fitness club at the time.
Our guide is here to ensure that any plan has the maximum chance of surviving contact with reality. The fitness industry, the insurance industry and the economy as a whole is in a tumultuous period at the moment and events (as we saw with the Covid-19 pandemic and the energy crisis prompted by the Russian invasion of Ukraine) can escalate quickly.
As such, while it is important for a gym or fitness club owner to understand what types of insurance they would like and the prices they would like to obtain it for, it is also key to keep in mind that the market, and therefore insurance will fluctuate. Insurance underwriting is a complex process, deduced (or perhaps that should be divined) by a series of risk assessment calculations.
In addition, the purchasing of insurance policies can also be a highly specialised and specific process. This topic could be an article in and of itself but to keep things brief we will just say that many policies, especially for larger amounts and depending on the insurance and underwriter may be subjected to significant change prior to the final agreement. Of course this process will vary depending on the different types of insurance, and independent gym and fitness club owners may need coverage across a variety of sectors. Liability insurance, Indemnity insurance, Insurance as an employer, Asset Insurance. Some insurers and underwriters can provide more than one of these, and even two insurance policies with the same title by two different insurers/underwriters will cover different things.
As such it is important to keep in mind that the answer to ‘What Insurance is necessary’ doesn’t have a straight-forward answer. For example, we will recommend, both here and later, that public liability insurance is very necessary. However different public liability insurance policies will vary, some may contain coverage that is not necessary to an one independent gym or fitness club, but is very pertinent to another
As is often the case, the correct answer isn’t always satisfactory or brief. Which is why we will be delving into the different types of insurance and what coverage to prioritise within those insurance policies.
Which Types of Insurance Should Interest an Independent Gym or Fitness Club Owner?
Now we're on to the part you've been waiting for!
Whether a gym hasn’t opened its doors for the first time or it has been running for a decade, we hope that this list, breaking down the various types of insurance that may be financially interesting to an independent gym or fitness club will be of some use. In this list we will try to give a brief summary as well as any potential benefits or pitfalls commonly associated with the insurance in question from our lengthy experience in the fitness industry. First we will start with the insurance we have talked joint-most about during this blog so far, Contents Insurance, followed by Public Liability Insurance.
Contents Insurance
Different sectors will always prioritise different types of insurance. As we said above, even different gyms will prioritise different insurances depending on a variety of factors, ranging from location to the services provided and the number of personnel. However, one type of insurance with near universal application and appeal is Contents Insurance. Unless the fitness facility in question happens to consist of just an empty studio room, the contents of an independent gym or fitness club will be some of the most prized possessions., Whether it is the equipment itself, the electronics and computers or even the access controls (something we know all about), there is a plethora of expensive and hard to replace equipment that makes up a good portion of the initial investment into a gym.
While the initial setup phase is a time where no gym owner wishes to spend more than necessary, the potential of having expensive equipment damaged long before it has been able to help pay itself off is a catastrophic situation to be in for any new independent gym or fitness club owner.
The maths here becomes very simple. If an event that caused a significant amount of damage, say half or even a third of the equipment and/or assets within the gym are taken out of commission due to say a fire or flooding. Could the gym comfortably afford to replace them? Even if the answer is yes, that is a significant amount of money to burn. As such, we would nearly always recommend Contents insurance for all but the most spartan of fitness club setups!
Public Liability Insurance
While there is a massive and compelling case to be made for public liability insurance, we will not be making it quite as emphatically as the others? Is it due to fatigue? No, we could talk about insurance for gyms and fitness clubs all day. Public liability cost is a legal requirement for nearly any business substantially dealing with the public, which, of course, a gym or fitness club falls under.
But while being a necessity, does not mean that it should be begrudged. Public liability insurance is one of the most effective insurances available on the market. It can cover (again, factoring in things like excesses) legal costs that occur due to allegations and instances of injury and property damage. With things like weights, water and movement commonplace in a gym or fitness club, public liability insurance is a very smart purchase. As we don’t need to recommend a gym or fitness club owner get it (as it is mandatory), we would recommend that they do not ‘cheap-out’ on it.
As per our example above, large excesses on public liability insurance will significantly diminish the returns from multiple smaller public liability claims. This will, in turn, result in much higher payouts for the gym or fitness club in question. Often public liability claims are either for a very small or significant amount. As such, it is best to go for a policy that has a high overall coverage with a low excess, to cover off both of these angles.
Assets/Equipment Insurance
This insurance is, for many underwriters and insurers, a variant of contents insurance. Though some offer their often specialised ‘Equipment insurance’ to facilities within the fitness industry. As per the rationale we went through in Contents insurance, gym equipment represents a significant investment to any gym, let alone an independent gym or fitness club.
As such, it is pertinent, especially close to opening, that equipment be suitably protected.
The reason that equipment insurance may be preferable to generic contents insurance is as follows.
Within the insurance industry, there are several governing principles. To reduce one of them to a core and usable sentence. Specificity reduces costs. The reason may be apparent. The most specific a policy, the less risk it presents. As such, these policies can often represent the greatest value.
Contents insurance is a good example. Contents covers a broad range of items, especially within a gym or fitness clubs. This means that the underwriters will determine that the risk on this policy is high relative to say, a policy that only specifically covers equipment. Even under normal circumstances, equipment will slowly degrade. Such is the nature of the repetitive motions and high-weight loads. As such, the desire to specifically protect equipment for a gym or fitness club owner should be strong. Either because they want to ensure it lasts until the point where it has ‘paid itself off’ or alternatively because some money may be put towards its replacement.
It is worth saying that many insurers will deduct money from the payment amount based on the age of the equipment, so it may not always be possible that insurance will provide a like for like replacement.
Like many of the pieces of insurance advice within this blog however, this will vary from insurance to insurance. It is always important to read the policy. Even after purchasing the policy, insurers must legally give you a period of time to read it and ensure you are satisfied with the coverage.
Buildings & Commercial Property Insurance
Perhaps one of the most self-explanatory and well-known insurances, due to its appearance in nearly every sector of the economy.
Unsurprisingly, it covers the building itself. If the building is owned in some capacity by the gym owner, usually the type of insurance required is called something akin to ‘Building Insurance’ or ‘Commercial Property Insurance’.
Conversely, if it is a rented commercial building or area, this is usually not necessary as the landlord or company responsible for the property will be the ones who are required to have it insured. It may be prudent for new independent gym or fitness club owners to liaise with their landlord/letting company to understand the nature of this arrangement, lest any significant damage occurs to the building during their occupation.
Professional Indemnity Insurance
In some ways the other side of the coin of Public Liability Insurance, Professional Indemnity cover, sometimes known as PI Cover or PI Insurance. This is insurance to cover something key that public liability insurance does not. The professional obligation that an independent gym or fitness club has to their members. This can cover a wide range of responsibilities that otherwise fall to a gym owner. Again, policies will vary depending on the quality and price of the insurance. It usually covers errors by staff and personal trainers, personal injury sustained while under their guidance, negligence claims instigated against the gym and the staff and much more.
Some policies even offer protection against broader issues, such as how a certain service or piece of advice was delivered and the outcome, or even broader legal issues not involving injury.
Given the broad protection and peace of mind that this insurance gives, we believe it to be a very important consideration for independent gym and fitness club owners. This sort of legal expenditure can become expensive and it can be stressful for staff to know that they have either caused significant hardship or that they are not suitably protected within the environment. As such, we believe that Professional Indemnity Insurance/cover is the best way for a gym owner to protect their staff, allowing them to deliver the best service possible.
Employers' Liability Insurance
In a similar vein to the PI and Public Liability Insurance, Employers liability insurance is just as it sounds. What if a staff member experiences an injury they sustain at work? And like Public liability, we won’t do much convincing here because Employers Liability insurance is another legal requirement. This is very prudent, and much like our section on public liability insurance all we will say here is that we heavily recommend that independent gym and fitness club owners purchase a quality, high-coverage policy. These policies are heavily regulated and for good reason. The right type of policy with the right coverage will protect not only the business but also the staff from a significant amount of financial hardship. We can only reinforce our endorsement that significant attention and focus should go into the purchase of employers liability insurance.
Fidelity Bonds/Fidelity Guarantee Insurance
While all insurance inherently leaves a bit of a bad taste to talk about, as it pertains to things going either wrong or drastically wrong. Fidelity Bonds or Fidelity Insurance is perhaps one of the most unpalatable to consider warding against.
It is an insurance designed to protect a business, in our case an independent gym or fitness club, against theft or loss caused by dishonesty behaviour by either staff, partners in the business or management. As we said, it is not something that people like to consider. But the nature of all insurance is to protect us all against the unpleasant and the unthinkable. As such, it is hard not to recommend it as a prudent insurance for independent gym and fitness club owners, we earnestly hope it is one that goes unclaimed on.
Management Liability Insurance
The necessity of this insurance will heavily depend on the structure and size of the gym or fitness club in question. However, in the right organisation this could be vital. Being part of the management of a business carries with it legal and fiscal implications. These implications are broad and we will not explore them exhaustively here, perhaps in another blog on gym and fitness club insurance. Irrespective, for a suitably developed independent gym or fitness club, this type of insurance could very well offer significant protection for the highest level of staff and management.
Business Interruption Insurance
And finally we end our list on a unique type of cover. We say that because BI cover, often called Business Interruption insurance, is something that usually only activates during another insurance claim. Over the course of this article we have covered what will happen from an insurance perspective while a series of costly disasters unfold, but what happens if this causes the fitness facility to close? In another term, what happens if business is interrupted?
Well, if a gym or fitness club owner has been prudent, that is where their business interruption cover would kick in. Depending on the quality and coverage of the policy, this will cover expenses such as wages and fees that will persist despite the fact the business is closed. As with some of the insurance types we have covered today, it can seem like a niche and irrelevant insurance until it very much makes the difference in a crisis.
What Should an Independent Gym or Fitness Club Expect to Pay for their Insurance?
And is it worth it?
In the same vein as our answer to what insurance is necessary. The correct answer to this question is as unsatisfying as it is nuanced. But the outcome, peace of mind and an important investment in the financial security of a gym or fitness club, is entirely satisfactory, we promise! Ultimately, as we covered when going into different insurance types, the amount of money an insurer/underwriter decides to charge a gym or fitness club will be entirely dependent on factors such as the size of the facility, the size of the membership, the number of staff, the location, the equipment, the services offered and the broader market.
To take an example, insurance for employers’ liability is usually calculated either based on the exact number of employees or within a bracketing system. Other insurances, such as contents can either take into account the assets within the gym or fitness club or set a premium and resultant liability cover for a set amount. While we won’t go into the specifics here (there are other articles from insurers that cover this), we will reiterate that many of the types of insurance we covered above represent a significant investment in the financial security of a gym or fitness club. They come at a price, but we assure you that some will be prices worth paying. And paying a little more upfront can save a significant amount later on down the line. For example, many policies, irrespective of what they cover, come with an excess. This is a sum of money that needs to be paid to the insurance company in order to process the claim. A trap that many fall into across various different insurances is to pick a lower price insurance with a high excess. This seems (correctly though deceptively) to represent a saving. A precious amount of money saved from a necessary expense. That must be a win, correct? Yes, perhaps. Until you need to claim that is. In our twenty five years of experience in the fitness industry, we have heard many tales of high excess insurance policies resulting in either an inability to use the policy effectively for the claims that the gym wanted to make or a significantly diminished payout. An easy way to conceptualise this is by taking the excess as an implied minimum limit on the minimum an independent gym or fitness club can claim. If our theoretical fitness club has two claims they need to submit on their contents insurance, one for £4000 and another for £2500. But they agreed to an insurance policy with an excess of £3000. Well that means if they are allowed to file collectively they are only receiving £3500. If they have to file separately, that could mean as little as £1000 on a collective £6500 claim! So while it might be tempting for independent gym and fitness club owners to save £50 on their premium, it is vital to keep in mind that this could result in a substantial deduction on the total payout from the policy later on.
How To Understand if an Insurance is Correct for an Independent Gym or Fitness Club
Much like researching and purchasing insurance in a domestic setting, purchasing insurance for a business can take time and effort. But we here at Ashbourne are convinced it is a case of ‘if something is worth doing, it is worth doing correctly’. Because of the nature of insurance, there is a temptation to gamble. Pay less now in the hopes that nothing needs to be paid later. As we mentioned earlier, there is a temptation to pay the lowest premium, take the highest excess, opt out of certain areas of cover? Anything to make that payment number go down and down and down.
It is, we hate to say, a false economy in many cases. Over our twenty five years experience in the fitness industry we have seen many independent gym and fitness club owners fall foul of ‘thinking’ they were appropriately covered. Each insurance policy has to be basically as good as the next right? Unfortunately not. And the fitness industry is a place where that sad fact gets proven regularly. So we will start to close off this article with a quick guide on how to understand whether the insurance a gym owner is looking at, irrespective of the type of coverage, is the right one.
What Does the Gym Need Covered?
Something we always recommend doing for each category is understanding what coverage is desired. We recommend independent gym and fitness club owners undertake an informal (or perhaps formal) risk assessment. Certain things will be necessary as we covered above, public liability insurance, employers liability insurance etc.
But even within those remits, a gym owner should think about what they would be comfortable paying as an excess.
Remember, taking our excess mantra from above, an excess essentially represents ‘what is the minimal amount you are comfortable paying’. It is an uncomfortable question, but that is good. When buying insurance we often feel too comfortable. I mean the things we are trying to insure against haven’t happened yet, they might never happen. It is an important mindset to shift.
For example, the next priority after public liability and employers liability insurance would most likely be equipment. High excesses on equipment might be tempting. After all, equipment is expensive anyway and so a gym owner is likely to always get some payout.
But that logic feels slightly less sound when the calculations show that the gym owner ends up paying over half of the cost himself each time.
With that being said, we don’t recommend that independent gym or fitness club owners go policy mad, buying every type of policy and always going for the most expensive policy. Down that road lies madness and not an insignificant amount of immediate fiscal discomfort.
There are insurances that it may be easier for a gym owner to identify as not necessary, especially if they are a new gym or fitness club owner just setting up shop. For example, directors and officers insurance or fidelity insurance may not be necessary initially given the presumably low number of management.
Insurance is a balancing act between what is prudent and necessary, and what is an acceptable risk. It is a perennial question and one that we will never truly know the answer to. But that should never stop us from attempting to make the best estimation with the resources and knowledge available to us
Finding the Right Insurer for the Right Insurance
Whether it is a generic insurer on a search engine or a specialised insurance broker that requires calling up, finding the right insurer can feel like a bit of a maze, especially at first.
But like all things that feel insurmountable initially, exposure and understanding will gradually bring confidence and assurance. Understanding what each insurer offers, does well and their respective price points are a good start. Despite their reputations, brokers can be good allies in finding the best deals. With that being said, we would also recommend gym owners do their own research. There are several specialist insurers and brokers that work and specialise around the fitness industry and those who operate in the sector. These are a good port of call, and as we said above, one of our mantras is that specificity often brings good value. But again, a caveat is that this does not mean a specialist will always give the best deal for an independent gym or fitness club owner.
Finding the Right Policy
Finding the right insurer is, however, only half the battle. After that there is also the policy itself. These can vary dramatically, even within the same brokerage or insurer. If step one was followed, independent gym and fitness club owners will have a list of risks and scenarios that they wish to be covered. Equally, it is important to keep in mind that if something is covered, it still matters to what extent it is covered. Both in terms of claim limits and excess. Ultimately pressing the button or saying yes over the phone and finalising the purchase of insurance is a process where many moving parts come together. We hope that with our guide, any independent gym or fitness club owner will have made significant headway in understanding what is necessary, prudent and unwise.
Our Final Thoughts
And so concludes our guide for independent gyms and fitness clubs on what to prioritise and what is required in the world of insurance. It is a complex and interesting topic, one where a lot of money can be saved or lost for an independent gym or fitness club, depending on how it is handled. And despite the significant amount of text above, we have only just started to scratch the surface. Like many aspects within the fitness industry, it ultimately comes down to expertise and experience. And luckily that is something that Ashbourne has to spare.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
Simply select your preferred timeslot and we’ll be in touch to have a chat about your health club, the goals you want to achieve, and how our system can help you.
For this week’s blog, we will be drafting a checklist of Five Key Steps To Starting Your Gym Business and how you can avoid the worst business habits before they even have time to form.
The first months of a new gym or fitness club business are a real make or break period. While it is entirely possible to let your gym business come together naturally, if you leave too much up to chance and happenstance, bad habits could form within your Gym that will be hard to remove.
A bad habit formed within the first six months of a business’ lifespan can become systemic, and this could spell disaster if it is costing you your reputation, customers and income.
But rest assured, we are here with a detailed list of ten things to keep in mind as you set up your Gym Business. These have been picked from our wealth of experience working with Gyms and Fitness Clubs across the UK and Ireland, and have been designed to ensure that your new Gym Business doesn’t form any bad habits. As such, we will be focusing mainly on how to set up your “business as usual tasks” (from here on in we will be calling that BAU for short) to minimise the chance of introducing systemic inefficiencies.
Starting At The Top: Defining the management structure of your Gym Business
From the outset, you should have a clear idea of what the management structure of your Gym Business or Fitness Club is going to look like. In this section, we will be looking at how to ensure that when the launch day for your Gym business comes around, everyone knows their position, their responsibilities and their objectives.
Ideally, you will have certain positions already filled with people that you know are capable. Bringing in people who you trust, and who are capable of doing the job from day one will be a massive boon to your business. Having an established working relationship will go a long way when it comes to navigating the tumultuous first few months of any Gym business venture.
We think you can probably understand where we’re going with this…
However we appreciate that this isn’t always possible. If you are starting a Gym and many of your positions are not yet filled, our advice would be to lock in as many of these roles before launch day. Preferably with plenty of time to space.
Most likely, you are going to have an aspirational launch date, and this can be perfect for giving your new talent time to wrap up any existing commitments they have.
If you have the time, make sure you look for people who not only have the necessary skills, but seem like they will be able to innovate and work under pressure. In the first few months of your Gym Business’s lifespan, there will be a lot of decisions to make. Many of these decisions will subtly (or not so subtly) affect the course that your Gym Business will take. As such, it is important that you trust the individuals that will compromise your Management Team.
The other important aspect of this section is Structure.
A talented, innovative individual in a broken structure will always struggle to make the impact you want, regardless of their talents.
Therefore, once you are sure that you’ve hired individuals you trust, create a management structure that empowers them to make decisions, but one that will keep you, as the leader, in the loop.
Make sure that there aren’t overlaps in authority where possible.If there absolutely has to be, make sure that each of the people in the structure knows who has priority in which part of the business. Draft a list of all key responsibilities within your new Gym business and ensure that every single one is covered off by an individual.
Where possible, avoid single points of failure. It might be tempting when you have one person who can do multiple roles, especially in a small Gym business that is starting up. But that person is going to have to take a holiday, and might even have to take unexpected time off. As such, there should always be someone who can run the BAU operations when they are out.
This doesn’t mean you need to train them on the entire job, wholesale. Just make sure that whoever is designated knows enough to make it possible for the business to function. Depending on the workload you’ve assigned, you could even take this back-up role. Learning some of the roles well enough that you could do them in a pinch will prove invaluable when it comes to making sure that these job positions are performing to an optimal standard.
Finally, make sure your upper management structure is lean and dynamic within your new Gym Business. The last thing you need is several people doing the same job. Make sure that your management team can respond to changing situations early on. If something isn’t working every single business day, it might be time to adapt the team. Keep aspects of your team modular where possible so that moving one piece doesn’t cause the entire house of cards to collapse.
This philosophy of efficient, dynamic and lean structure should be applied not just to your management team, but across the entire structure of your Gym. There is no reason that this line of thinking needs to stop with your management team.
Consider applying similar approaches to your rank and file employees as well where possible.
Make Sure Your Marketing Works From Before Day 1!
Marketing is going to be a perennial issue for your Gym business throughout its lifespan, but at no point will it be more important than in the initial start-up period.
The marketing campaigns that you run in the first few months are going to look very different in message and intensity to any other period.
This isn’t a bad thing, if done right, it can be an incredibly effective way to catch-up with your more established competitors, but it is going to take a significant amount of time and energy. Finally, it isn’t a strategy that is meant to last forever. The marketing strategy of your first months shouldn’t become your Gym Business’s BAU.
As you are starting up, two key factors at the front of your mind should be:
Your target demographics
AND
Your brand identity
These two should be interconnected to a degree, so there is no harm thinking about them at the same time. As you are starting up your marketing campaigns, you should be constantly focusing on your target audience and your ideal customers. Are your ideal customers the dissatisfied members of a local competitor Gym?
Are they people who have never set foot in a Gym before?
Obviously you needn’t (and shouldn’t) limit yourself to one demographic. But it is important to understand who you are pushing your message to.
This is particularly pertinent at time of writing. The Covid-19 Pandemic of the last eighteen months has dramatically changed Gym membership trends across the fitness industry. If you are starting a new Gym Business in and around the ongoing pandemic, there is a unique opportunity to capitalise on the shift in both consumer trends and the demographic shift away from the cities. Given that established Gyms and brands will often have an in-built advantage, this could be invaluable for giving your new start-up the edge.
When it comes to brand, you want this to be in support of your brand identity. If you are targeting local, more traditional and maybe slightly older Gym goers, then a flash, post-modern Gym logo and name probably won’t get you very far. Conversely though, if you are trying to get Gen Z and younger Millennials into your Gym, a heavily online and convenient brand supported by unorthodox social media tactics will be perfect.
Your marketing strategy shouldn’t just be the same methods with a different message. Different demographics will respond better to different methods of outreaching and communication and it is important that there is as little dissonance as possible between the marketing methodology of your Gym business and the brand identity you are striving for.
For instance, if you’re targeting an older audience then Instagram or Tik Tok is going to be a bad way to keep in touch. Conversely, your younger members aren’t going to be as active on Facebook.
This can be very costly if you spend your first few months making these kind of communication mistakes, so make sure that you have a customer in mind and invest all your time into reaching them where their attention is.
Think about what you can influence and what you can’t. If you don’t have control over the front of your Gym’s facility, it is important to keep that in mind when creating marketing materials. There will be a significant amount of dissonance created if your marketing implies that it is a trendy and high-tech facility and yet the front of your Gym just looks like a normal converted retail unit. That doesn’t mean it is impossible, but if there are certain realities that can’t be changed, you need to think about how your marketing strategy will address and work around them.
Finally if you have any sponsors or partners already lined up before the launch of your Gym Business, now is the time to utilise them post heavily. If you are having a launch party, make sure that everyone on your sponsor’s mailing list knows about it. Make sure that if your sponsors or partners have a physical store that the appropriate marketing material is there.
Utilise their existing social media following to start getting and traffic to your own social media accounts.
Successfully Weight Up Your Risks And Opportunities
Speaking of the Covid-19 pandemic, this section feels particularly pertinent at the time of writing. The next key thing we would urge you to consider whilst in the process of starting your Gym business are the Risks and Opportunities that might occur. Now this might seem obvious and intuitive.
The big risk is the business might not work, right?
Well, we don’t just mean you need to think about everything that could happen, but what you will do if it does happen.
With the last eighteen months of the Covid-19 pandemic now thankfully behind us, we feel pretty safe in saying that things won’t always go as we had planned them. In the post Covid-19 era, a Gym will be partially defined by what measures it will be willing and able to take to cope with outbreaks. On the other hand, the Pandemic offered a chance for innovation for those who were adaptable and prepared.
It is important that while you are starting your Gym business, you look at what you will do when risks and opportunities present themselves. Drafting a list of potential positive and negative scenarios with your management team will go a long way.
Some examples of this could include one or more of your competitors closing down, or more Gym’s starting up nearby. It could include the return of Lockdown if the pandemic continues to worsen, or a significant growth in the population of your local area due to the demographic movements over the last two years.
List the actions that can be taken as you start-up to take advantage of this situation should it occur. If they are comparatively inexpensive, then consider doing them ahead of time. If they will bring benefits irrespective of whether the situation comes to pass, even better. By implementing this forward thinking, agile approach, your Gym business can be ready to deal with any risk and capitalise on any opportunity at a moment’s notice.
DO YOUR RESEARCH!: Understand Your Area And The Competition Your Gym Will Face
Next we will be focusing on market research with a specific focus on the competition in the local area that your new Gym business will be operating in. Developing a good understanding of your competition and their capacity and ability to compete with your operation will be one of the keys to creating a successful Gym Business. If you are successful in your research, you will be able to carve out an existing piece of the competitive marketplace your Gym is setting up in.
Start by making a list of every competing Gym or Fitness Club in your area.
Once you have done this, whittle it down to the few Gyms and Fitness Clubs that are trying to do what you envisage your new Gym business will focus on.
For example if you plan for your facility to have a swimming pool, then it is only natural that say, the university pool, or the community pool is therefore a competitor. It takes a portion of that market share that you will be focusing on. On the other hand, if you are setting up a Gym that only deals in cardio and weight machines, the local swimming pool probably isn’t your biggest concern.
Make additional notes and flesh out your competition.
When we say make a list, unfortunately we don’t just mean to write down the name of the Gym or Fitness Club in question and call it a day. While this would be much easier, a list of names isn’t much use. You and your management team won’t learn much by reading the words ‘Jim’s Gym’.
But if underneath the words ‘Jim’s Gym’ there is a list of every piece of equipment at that Gym and the number of members, suddenly this goes from a list to a battlemap. A valuable document that will help you understand the area you are hoping to conquer.
In addition, you should be listing the demographics each of these Gyms and Fitness Clubs are focusing on, and which they are ignoring. Hopefully it should quickly become apparent while doing your research what the target audience of each given Gym in your area is.
This may require a few boots on the ground (or hands on keyboards), but knowledge is power and the price for this knowledge is relatively low.
In addition to the quantity and focus, you also want to be looking for the quality of your competition. Specifically you want to be looking at how effective and efficient the competing Gym businesses in your target area are. This information might be harder to obtain and verify, but if you can determine how satisfied a Gym’s members are with the Gym, it could go a long way to understanding their viability as a competitor to your new Gym business venture. It could be daunting if you knew that there were three dedicated cardio-focused Gym or Fitness Club establishments in your local area, but if you know one is in financial trouble and the other two are chronically mismanaged then the paradigm shifts somewhat. What could, at first glance look like a crowded marketplace becomes an arena ripe for expansion.
As a closing note, it is important to state that this market research and competitor analysis should be done as early as possible in the cycle of launching your Gym business. It is also not something that should just be done once and then ticked off. The market is constantly changing, and what is true in January might not be in June. Where possible, keep your competitor research moving on a rolling basis. This doesn’t necessarily mean a weekly visit to your competitor’s Gym (they might start to get suspicious), but if you are basing a Gym business decision on a piece of information, it is prudent to check it is still correct.
Get Your Payment Collection Sorted From The Start
For our final section, we will be focusing on one of the most important aspects of your new Gym Business. Collecting payment from your members and for the goods and services that you will be providing. It is imperative, especially in the early stages of a Gym Business’s lifespan, that the cashflow goes unimpeded. It is what stops a company from being a massive money sink and it is what will convince your investors that they made the right decision.
As such, you have a huge incentive to ensure that there are minimal barriers between your new members’ bank accounts and your Gym’s bank account. The last thing you want to happen is for your Gym to initially accept all sorts of payment types in a desperate bid to collect capital. There can be a temptation to accept cash, card payments and even cheques, just to make sure those positive numbers are coming into your Gym’s bank balance. But this is a trap. All of those different payment methods will make for an administratively intensive workload.
Your also accountant won’t thank you (especially if you are your own bookkeeper)
This is exactly the sort of bad habit we were talking about in the introduction to this blog. It is the sort of procedure you don’t want becoming your BAU practice. If every month you are having to reconcile large amounts of payment data, in three or four different payment categories and collate them against your Gym membership records. Well, we don’t have to tell you that that is a bureaucratic nightmare unfolding before your eyes.
But with a little bit of planning and philosophical reflection on the nature of Gym membership, this can be avoided. It starts with recognising that the collection of a Gym payment isn’t solely about making sure the money goes from point A to point B. It is closely connected to the management of the Gym Membership itself. We have seen a lot of Gym’s have made it so that the collection of payment is a separate entity in constant conflict with the administration of Gym membership, but this needn’t be the case.
This is where the market has provided a convenient and powerful solution in the form of third party direct debit management companies. This system of managing Gym membership has become one of the go-to methods of payment collection, and with good reason. It has helped make membership payments easier for both Gym’s and their members through applied knowledge, expertise and technical innovation.
The main draw here is that these systems are often light-weight, easily integrated (especially if you are starting a new Gym business) and convenient for all parties involved. It can help reduce the administrative workload around payment collection and reconciliation, as well as provide an expanding payment platform if you intend your Gym business to branch out into other services.
These companies have achieved this by utilising new payment technologies, such as the safe, easy to setup and unobtrusive direct debit payment system. This system works great for well-established mega-Gyms and local, single-Gym start-ups alike. It allows for a scaling system, going as granular as even payment per membership. This means that the relative difference in cost and workload can grow steadily alongside your business.
Furthermore, the expertise that these companies can bring to a fledgling Gym business venture can be invaluable. Money is an omnipresent concern, but the collection of it needn’t be something that dominates your thoughts in the first months. By allowing a team of qualified, experienced experts to deal with the collection of your Gym membership payment structure, this will allow you to focus on the other pertinent tasks and objectives required to launch a successful Gym business.
In Conclusion – Plan Ahead Not After
And so there we have it, we hope you have gained some insight into these five different areas of starting a new Gym business. If you have found this article useful, please save it or bookmark it and refer back to it as you embark upon your new business venture. Now all we have left to say is good luck!
Want To Solve All These Problems? Let us take a load of your mind
Here at Ashbourne, we have a proven track record, having helped thousands of Gym and Fitness Club owners across the UK and Ireland over the last 25 years. We have been personally responsible for managing membership payments and assisting the day-to-day runnings of thousands of clients. We have been a valuable partner to all of our clients and we hope prove that we can be a valuable business partner to your new Gym as well
Over the last two and a half decades, we have developed an advanced payment collection and direct debit system that is world class. We have refined our operation, with the ability to integrate our club management software solution into nearly any Gym or Fitness Club infrastructure. We are confident that we have everything we need to help run your club efficiently, effectively and profitably from day one.
Our software has been developed to ensure frictionless integration and exchange within your Gym’s existing infrastructure. Equally, if you are in the process of starting a new Gym, we will be able to work with you to ensure that our systems work seamlessly with your own from launch day onwards. Using our unrivaled knowledge of the fitness industry, we hope to be able to astound your new members with the ease and efficiency of our payment system. You won’t just be obtaining a new piece of software, you’ll be engaging with a partner who understands what it takes to become successful, one that will help you grow your business.
Interested in finding out more? Show us the Gym business plan template you’ve just crafted and let’s begin the process of upgrading your club.
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Where possible, avoid single points of failure. It might be tempting when you have one person who can do multiple roles, especially in a small Gym business that is starting up. But that person is going to have to take a holiday, and might even have to take unexpected time off. As such, there should always be someone who can run the BAU operations when they are out.
It is important that while you are starting your Gym business, you look at what you will do when risks and opportunities present themselves. Drafting a list of potential positive and negative scenarios with your management team will go a long way. 
