How Do Gyms Make Money
As a gym owner, it is natural to think about monetizing your gym space. In this article, we will define the different ways that gyms and fitness clubs traditionally make money, but also, other ways to bolster your top-line revenue. Furthermore, studies have shown that 50% of gyms and fitness centers fail in the first 5 years due to common situations that are fixable. First, let’s go over the main methods to make money at your gym.
Gym Cash Flow – The Basics
There are a few staple business activities that are paramount to your success. Regardless of the niche that your gym caters to, there is a certain service that all clients will expect to be available and affordable. Below are the most common:
- Membership fees
When the question, “how do gyms make money?” pops into your head, the first thing that comes to mind is membership. The lifeblood of the fitness industry is largely subscription-based. Not only has this become an expected service and the status quo, but it is an easy way to get access to an increased share of your client’s wallet. While most will remain only members, there are upsells and premium services that can be paired with standard gym access.
- Personal training
Individual coaching and training has always been the best upsell for a standard gym member. Personal training provides customized and individual solutions for a person’s fitness goals, and the compensation reflects that. Having a team of licensed trainers that command respect and the results of the membership base is a great way to introduce a premium service to those that have the financial capability and drive.
These can be both specialized and general. The most common and popular classes are group cycling sessions. It provides a great way to hold the entire class accountable and most enjoy the high-energy atmosphere led by an instructor that doesn’t just teach but is actively demonstrating and advocating for their methods. Although this method is not revolutionary, it has seen great successful results due to the high-intensity atmosphere and group cohesion.
Three Common Reasons Why Gyms Fail
With over half of gym businesses falling within the first few years of their inception, it is important to proactively mitigate this chance by being prepared. The most common reasons for not being successful are:
- Lack of sales and marketing
There is a reason this is first on the list. If you don’t have any clients, you don’t have a business. Setting aside the gym niche, for now, a business owner needs to have a powerful sales and marketing method to both increase brand awareness, and to close sales.
- Improper management
There are three resources that every business has; human, capital, and natural. This is a huge learning process, as managing these channels is of the utmost importance for the success of your business. Unfortunately, time is of the essence, and keeping it both simple and effective is a monumental task for a business owner.
- Not interpreting the right data
When first asking yourself, “how do gyms make money?”, the actual question should reflect practices that you are already doing. Finding the “it” or “x” factor of your business and expanding on it is the secret to finding a winning and profitable strategy. This is very difficult to do as most small businesses have not developed an effective way to measure and analyze their meaningful data.
In business, the learning curve can be extremely steep, and, unfortunately, can be costly to the success of your business. Proper gym management and membership software help to drastically cut this learning curve and set up a proper way to both manage your business, but also streamline onboarding and revenue. Spark Membership is the best gym management software on the market. Start today for just $1 and see the difference in your data analysis, member management, sales, and staff satisfaction.
5 Alternative Ways to Increase Your Gym’s Revenue Streams
As a small gym, it is important to walk before you can run. This means that before searching for multiple streams of income for your business, double down on the staples and watch your gym flourish with proper management. If, however, you are a larger gym that is rapidly expanding or have found yourself location-agnostic, below are some common ways to monetize your gym.
- Online classes
No overhead, remote, and no capacity limits.
- Supplements and protein shake
Consider setting up a juice bar in your gym for pre and post-workout shakes, or selling your product line with a carrier.
- Renting space out for complimentary services
Gyms are often large facilities. Rent out the space you don’t need and even set up referral programs for massage therapists, physiotherapists, and specialized instructors.
- Selling merchandise and equipment
Gym bags, apparel, and workout equipment are in very high demand among your members, especially those that are after this lifestyle.
- Offering nutritional advice and meal plans
The body is a statue to be molded, yet it cannot do so without the proper fuel. It is just as important to have a healthy diet as it is to stick to a proper workout regime.
While diversifying revenue streams is vital, enhancing member engagement is key to a gym’s success. Discover innovative fitness contest ideas in our blog, “Fitness Contests and Challenges to Revitalize Your Gym“. Boost your gym’s efficiency and member satisfaction with Spark Membership Software, the leading gym management solution. Start today for just $1 and transform your gym’s management experience.