So, you want to open your own fitness studio. You’re convinced it’s time to test the entrepreneurial waters. The lure of being your own boss, of doing it “your way,” and being “in charge” has finally moved your concept from dream to making it happen.
According to the latest research from the Association of Fitness Studios (AFS), at any given time 27% of all fitness professionals are thinking of opening their own studio. 27%! That translates to over 150,000 trainers dreaming the dream of opening a fitness studio at any given time.
The question, of course, is how many of those dreams will come true? Let’s take a look at the five things you must do, if you’re going to have any chance of succeeding.
1. Know your Market and How You Will Serve It
Also known as “market research,” this is your first step to success. Skip this step and you have almost no chance. Embrace it and you have a fighting chance. Consider these questions:
- What type of studio will you have? Personal training? Group X? Pilates?
- Does what you want to do, match up with the demographics of your chosen area. Keep in mind that 90% of your customers will come from within a 3-mile radius.
- Who’s already in your space (aka, the competitive environment)? Are you the first one in or the 15th? What do they charge? Do similar numbers work for your proformas? Shop your intended competitors. Learn what you have to exceed to succeed.
- How will you be different? Known as brand differentiation, this is an important element. Why should I bother to try yours if it’s going to be just like the one I’m currently at? Oh, you have Zumba? Or Power Plate? Or BollyX? Or classes when I want them? Or ABC or XYZ? Okay, I’ll take a look.
- You know you’re great, but how are you going to communicate your greatness, and your differentiation to others? Oh, the 20 clients you “stole” from your last employer? Fine. What about month two? This will become your marketing plan, you strategy to attract customers.
2. Complete a Business Plan and Make it a Good One
There’s at least three really important reasons you need a Grade A Business Plan for your new studio business:
- It’s your road map – a plan to follow. If you give your concept enough breathing time, share it with enough eyes connected to smart brains, and massage it until it glows – then you’ll have a document worth going back to over and over.
- You’ll never get financing or investment without it. True enough. Your personal trainer business plan is your feasibility statement. It tells the story of how you’re going to make money, enough to start, keep going, and ultimately flourish. Be prepared to defend your assumptions.
- It forces you to consider and reconsider your concept before you get yourself in too deep. The best place to make a terrible mistake is before your business is alive. Some of the best choices ever made were by people who decided NOT to open their own studio. Once they got deep into the “what it will take,” they decided the mountain was too high, or too precarious, or too expensive. Better to figure this out before rather than after.
3. Get Strong Legal and Financial Advice
This is a critical step in the process. You need a good lawyer – one who’s not your brother-in-law doing you a favor – but rather an experienced legal mind in start up businesses, preferably of the fitness variety. If you disagree with the previous sentence and intend to “go cheap” – save your money and save your time. Legal advice is not where you cut corners.
Your lawyer will guide your every step from creating the most appropriate legal entity of your business, negotiating financing and leases, to ensuring your structure and physical business is on a strong footing.
Your accountant will guide through the numbers, making certain you’ve considered all the variables, all the tax ramification, all the employer, state, and federal issues. They’ll also help you with your financial report, analysis, and projections.
Lastly, you should have an exit strategy that protects you down the line. Your investors will want one and they’ll want to know yours, too.
4. Be Well Funded
If you’re going to do, do it right. Shoestrings don’t work because they’re always too short. Don’t be caught short. Understand the pitfalls, plan for the unexpected negative surprises (and there will be some) and have deep enough resources to ride out the inevitable storms
How much is that? Your professional advisors will let you know, but typically, you should have enough money in the bank to cover at least six months of operations. AFS research shows that the average studio generates roughly $300,000 a year in revenue and the average own is to pull only $50,000 from the business.
This is a great business. But it’s a tough one.
5. Accept that There Will Be Bumps and Headaches
If it was easy, everybody would be doing it, right? Well, okay, it might seem like every one is doing it, as studios seemingly pop up on every corner every night. But plenty close, too.
The reality is, it’s not all roses. There will be bumps in the road, but they’re almost always surmountable. There will be plenty of headaches, but they are short-lived. Your passion for helping people become healthier, improve their lives, and achiever their fitness objectives – this why you chose this field. Convert that passion into a similar passion for the business side – and you will not only survive, you will thrive!
About the Author
Josh Leve is Founder & CEO of the Association of Fitness Studios. With 13,000 members and 60 industry partnerships – AFS has been featured in all major fitness publications and the US News. He is also a featured speaker for events such as Club Industry, NSCA, EMPOWER!, and more.
For more information about the Association of Fitness Studios, visit www.afsfitness.com