Fitness is big business. In the UK, the total market value of the industry is worth a staggering £4.9 billion, up 2.9% on last year and continuing to grow. There are now more than 7,000 gyms and fitness facilities across the country, with a total membership approaching 10 million.
One in seven people are now members of a gym.
The UK boasts 13,770 registered personal trainers, the highest number in Europe. And with the boom in health and fitness bloggers and influencers, it’s clear that keeping fit is a lifestyle choice that isn’t going away anytime soon.
If you’re a personal trainer with a handful of clients looking to scale up or the owner of one gym with ambitions to open a chain, then this article is for you. We go into more detail about how to make the transition into a successful fitness business.
When you first started your fitness business journey, perhaps as a freelance personal trainer or by opening one small gym, you probably wrote a business plan. If yes, then now is the time to update that plan to incorporate your growth strategy. If you didn’t write one, then now is the time to set aside a few hours to do so.
A business plan is a structured document that will enable you to focus your attention to make your dream a reality. Consider it as your roadmap to business success, a business plan will help you to make informed decisions and convince third parties to invest and support you with their capital.
In addition, it will help you to narrow down your unique selling points, understand your target market as well as help you to plan what services and products you’ll offer.
This is the top-line overview as to the what, why, how and vision of your business. It should be an attention-grabbing, succinct and clear summary of what you want to achieve.
In this section you can go into more detail about your vision and mission, as well as information about your career history, your strategy and your plan to increase your market share.
Explain here how you plan to manage the company and include information on the people who will be leading the business and their roles.
Market research is critical to ensure you know precisely who your target client is and where you can find them. Detail this research here, as well as your plans on how you’ll communicate with them through marketing activities.
List the planned services, products and amenities you plan to offer and the projected prices. Note how much these services will cost you initially, for example the cost to buy or hire gym equipment such as treadmills.
Include all predicted expenses here, such as premises, insurance, staff, cleaning etc. This could also include marketing and one-off costs.
Outline how you plan to bring in money. This could be from memberships, from personal training or by selling healthy food. Estimate how many clients you would need to keep your fitness business functioning.
Go deeper into how you can add value to your clients. It could be by offering discounts for those who sign up for a longer period.
Map out in this section how clients will pay you and how you plan to handle regular payments or take cash and bank cards.
Detail here where funding will come from for your business at launch, as well as further down the line.
Spend time creating your business plan as the first step in your fitness business evolution. For more detail, read our article Writing a Gym Business Plan? 10 Step Guide to Gym Business Strategy.
Operating as a small business or sole trader might not require a heavy focus on finances. You might have few outgoings and have a relatively straightforward system for tracking your receivables.
However, when you scale up to a fully-fledged fitness business, you’ll have more expenditure to keep track of, such as paying staff salaries or upgrading equipment.
There are numerous online software accounting tools that can help you keep track of your finances, for example, Xero. These online tools make filing easier and can produce detailed and accurate reports at the click of a button.
Make a list of all the expenses you’ll need to cover to expand your fitness business. For example, if you’re planning to increase the number of gyms you operate from one to two or more, then list all the additional outgoings. These could include gym equipment, music systems, mirrors and mats. It might also include cleaners, utilities bills and branding such as signage.
The total of this list will give you an idea of what your initial outlay will need to be to evolve your business. You might plan to cover this with personal savings or you might need to source additional funding (more on this later). It’ll also help you to plan your future monthly outgoings and the money you’d need to bring in each month to cover these outgoings, and to make a profit.
You can predict what your income might be by working out the cost of memberships, the number of clients you plan to attract, as well as any added value services you plan to offer.
By having a clear view of expenses and receivables you’ll be able to better manage your cash flow, as well as forecast future expenditure. You’ll also be able to allocate funds towards other growth activities, including marketing campaigns.
Growing a small personal training business into a bigger organisation or multiplying one gym into many will require additional funding. If you don’t have the money in savings to cover these costs then there are a few funding options you can consider.
If you live in the UK, are over 18 years old, have a UK-based business that’s been fully trading for less than 24 months then you can apply for a Start Up Loan of between £500 to £25,000 from the UK government.
The loan is government-backed and charges a fixed interest rate of 6% per year. It is repayable over a period of one to five years and there’s no application fee.
Many UK banks offer business loans for start-ups and more established enterprises.
Research online to find the best choice for you, including fixed and variable Annual Percentage Rates (APR) as well as secured and unsecured options. You can also look for short or long term repayment periods. Some loans offer other benefits, such as payment holidays.
There are now online sites, such as Seedrs, where individuals can pitch their business ideas to investors and groups of investors in return for a one-off donation or equity in the business such as shares or a small stake.
Whatever funding option you progress, it is important to have a solid business plan ready to show the third party if requested. This should clearly demonstrate financial strategy and your plan for business growth.
You might also need to provide bank statements or other paperwork, so carefully read criteria and requirements before you apply.
When evolving your business, consider what legal structure you’d like to operate under. You might prefer to continue operating as a sole trader or it could be time to become a limited company.
A self-employed sole trader has the lowest level of bureaucracy as you simply need to register with HMRC in order to pay your tax. It’s straightforward, however there is no distinction made between business and personal finances, meaning you’re personally liable for all debts accrued.
If your expected turnover is more than £85,000 then you must register for VAT. You can also register voluntarily to save money when purchasing items such as equipment.
A self-employed partner is the same as a sole trader, however with two or more people working within the business as equals.
A limited company is considered a separate legal entity to its shareholders and directors and has a more complicated tax system and statutory obligations. You must register with HMRC and Companies House and it’s recommended to employ an accountant to manage your finances.
As a limited company, you aren’t personally liable if anything goes wrong.
Until now, you’ve likely been operating on your own, but with an expansion planned you now need to take on staff.
Hiring staff can be a headache if not approached methodically. Here is a quick step-by-step checklist for taking on your first employee:
However, once you’ve found your dream hire, the work doesn’t stop there. As an employer you have obligations to your staff. You’ll need to:
One of your expansion top priorities is likely to be finding appropriate premises. This could be to find office space or new locations to open more gyms.
If you’re launching a new chain of gyms then you should look for spaces that complement your business plan and the vision you have for your brand. For example, you might want all your gyms to be of a certain size, on the outskirts of a major town, with a specific internal layout and with parking available.
There are many options for commercial space, including whether you rent or buy, whether you take on an older gym or a space which needs a complete overhaul. You need to do your research into the area, to ensure that there will be enough demand for your gym services.
To research and find spaces:
When you find a potential property, make sure you look into the legal issues, such as the ‘use class’ of the property to make sure you can open a gym. Also confirm any additional permissions, for example if you need approval to put up business signage.
With new premises and new staff comes new insurance requirements. The chances of injury are naturally higher when physical exercise is involved and there are three types of insurance that you should take out.
This covers you for any claim by a client or member of the public for injury or damage. For example, if you run classes outdoors or in public places, such as CrossFit, and a passerby trips over your equipment and breaks their arm.
This protects against claims of alleged professional negligence. For example, if a client has had an induction to demonstrate how to properly use a piece of equipment but then uses it in an unsafe manner and hurts themselves.
If your business employs one or more people, then this protects you against any claims arising from employee illness or injury, sustained as a result of their work for you.
There are numerous providers out there, and it might be worth hiring a specialist insurer to ensure every eventuality is covered. Tailoring your insurance policy and being familiar with the small print means that you can respond quickly and professionally should you receive any claim – and so you won’t be faced with huge legal bills.
Protecting the name of your business is important for brand recognition and reputation. If you are growing from one gym to a chain or are launching a branded personal training business then you should consider registering your brand name with the Intellectual Property Office (IPO).
This registration prevents any other organisation from using your name, especially important if your business booms and others want to ‘rip off’ your name to capitalise on the hard-won reputation you’ve built up.
And if you discover another business trading under the same name as you then as an IPO-registered business you can prevent that usage either with legal action or mediation.
If you opt not to register your name, then you could be on the receiving end of legal action from a competitor with the same name who did choose to register it with the IPO.
One of the ways in which you can ensure regular income is by setting up annual memberships that are paid on a monthly basis. The easiest method to collect these recurring payments is by Direct Debit.
Direct Debit is run by Bacs and in 2017 nearly 57 million gym subscription Direct Debits were processed in the UK. It is the safest and most secure method for collecting regular payments.
It is an automated process that your clients can set up and then forget, enjoying the benefits of exercising at your gym rather than the hassle of remembering to pay you each month with the correct amount of cash or spending time standing at reception while your receptionist takes a card payment.
Read more in our article: Direct Debit: The #1 Way to Accept Recurring Payments for A Gym Business.
Direct Debit can also boost loyalty with your members, click here to find out more.
Now you have all the business side of things wrapped up, you need to ensure your marketing efforts are substantial enough to bring the clients through the doors.
Marketing should include advertising and promotion as well as clear signage and prompting word-of-mouth through existing clients and staff members.
You might need to entice new clients away from their existing gyms or encourage people who have never had a membership before to sign up for your gym. This might mean a launch month discount for new members or a promotion for members who sign up a friend.
Look at a mix of marketing efforts to ensure your target customer sees your communications. These could include:
If you’re ready to take a bigger bite of the £4.9 billion fitness industry pie, then now is the time to take the plunge. By nailing your business plan and finalising a few business points, such as insurance and hiring staff, you can look forward to substantial growth.
The new FastPay website has landed and we are over the moon with the finished result! Consisting of an array of improvements and additional features, the new FastPay website, designed and developed by The Hatch, is sure to enhance the […]
At FastPay, we are a BACS-approved bureau with all payments covered by the Direct Debit Guarantee. FastPay understands the importance of robust cyber security while managing your company’s payments. As part of FastPay’s ongoing security strategy, the team is pleased […]
The UK 2021/22 tax year is upon us and small businesses need to be aware of upcoming important tax dates. No need to panic, at FastPay we want to help get you up to speed – giving you one less […]