What is it?
The issue of health and fitness is never long out of the media these days. With obesity levels rising and the NHS straining under the weight of treating related illnesses there’s a high demand for gyms and fitness centres. Exercise comes in many forms and most commercial gyms will offer group classes, as well as an area for individual fitness training. Gone are the days when gyms brought to mind the image of Schwarzenegger/Stallone look-alikes pumping iron. Gyms are now the refuge of yummy-mummies and City professionals.
The rise of the health and fitness chains over the past decade is proof enough that people are willing to dedicate a lot of their time and money on getting in shape. But the smaller more independent gym could offer something a bit more personal – and if you’re keen to open a commercial gym that could be just the market to tap into.
Who is it suited to?
Well to start with, a strong interest in fitness is really a given. Unless you’re planning to hire staff to do everything from the outset, it’s safe to assume you’ll be spending a lot of your time on the premises so the sight of health crazed people pounding away on the treadmill has got to fill you with excitement. You’ll also have to be willing to put in long hours. Most people who can afford to use a gym are employed, which means they’ll want it to be open at the crack of dawn until late at night so they can fit their exercise regime around work hours.
Stephen Sharkey set up his own gym with a friend in South Wales in 1990. “For the first few years we didn’t employ anyone,” he says. “We used to get up early and do all the cleaning, and then go on to do all the instructions with the members. We didn’t even hire a cleaner until three years into the business.”
Sharkey is also keen to point out the importance of being passionate about wanting to help people. “You’ve got to understand how this industry is really capable of changing people’s lives.” If you can create the right kind of atmosphere, then your gym will not only be a place to improve your fitness, but an escape from the pressures of daily life.
So a strong work ethic, and good people skills are essential if you want to succeed in this business. Remember also that this is not an easy way to make money, so you’ll need a tight grip on your finances. Excellent marketing and sales skills will also come in handy when trying to recruit and retain members.
How much does it cost?
Don’t even think about it if you’ve only got a few thousand pounds to invest. Putting in a home gym in your spare room can easily go over £10,000 so the start-up costs for a commercial gym are huge.
Back in 1990, Sharkey and his business partner had to sell an expensive car, and a house between them and they still needed a £50,000 loan from the bank. “It cost us about £80,000 back then, but I think if you were setting up a new gym now it would cost you a lot more,” says Sharkey.
So to set up on your own you’re looking at a minimum of around £80,000 – £100,000 for the gym equipment alone. David Courteen founded Fitness Express with a friend from university. The company sets up and runs health clubs for hotels who want a gym on the premises but don’t have the expertise to run them themselves. “If you want to kit up a gym from scratch you’re looking at spending north of a million,” says Courteen. “It’s not just the gym equipment you need to consider – there’s changing rooms, showers, saunas etc.”
However, back when Fitness Express was founded in 1987, Courteen only had to raise about £10,000 to set up the business. “The beauty of our business is that you don’t really need a lot of start-up money because everyone else is investing the capital.” With the Fitness Express model, the company is given the funding to set up the gyms by the hotels. The hotels own the gyms, but Fitness Express staff and run them in exchange for fee plus a percentage of the turnover.
In terms of kitting out your own gym, there are companies out there that sell remanufactured gym equipment for about half the cost of buying it new. Graham Bertrand runs Physique, one such company. “You can kit out a 1000 sq ft gym for about £45-50,000 using remanufactured equipment,” he says.
Rules and Regulations
This is a somewhat tricky area really. Although a gym is a potential minefield for injuries and accidents there is no equivalent of, for example, the Food Standards Agency where exact safety guidelines for the industry are laid out. Obviously your gym would have to conform to basic standards according to the Health and Safety Executive, which would cover both the users of the gym and its staff. If an accident occurred, you would also be investigated by the HSE, so it’s in your best interests to be rigorous about safety procedures.
A good guideline to follow would be the FIA’s code of practice which details the minimum requirements for any fitness centre to be awarded their stamp of approval. The FIA request that all fitness centres comply with the Health and Safety at Work Act 1974, and the Management of Health and Safety at Work Regulations 1999.
Under the code of practice all staff must have adequate safety training and there must be an appropriate number of first-aiders in relation to the size of the club – only HSE approved first aid courses count. All fitness instructors should be trained to the standards required by the Register of Exercise Professionals.
All equipment including fitness equipment as well as lifts, electrical appliances, boilers etc must be kept in a safe condition and regularly inspected by appropriate people. All gym equipment must by maintained according to the manufacturer’s guidelines, with all checks and maintenance documented, and records kept on site.
Of course you will also be legally bound by employer legislation for any instructors or other staff members you take on. Another important thing to remember is that if you have a café or food area on site you will need to comply with Regulation (EC) No. 852/2004 on the hygiene of foodstuffs and the Food Hygiene Regulations 2006.
This is the kind of business that can leave you haemorrhaging cash if you don’t have a watertight business plan in place so forward planning is essential.
Location is also crucial. You have to do your research on how many people in the area can even afford to sign up with a gym. Basic demographic details can be obtained from your local authority but there are private companies that will give you a far more detailed profile of the local population in return for a fee.
“Don’t even consider starting up in an area that has less than 70,000 people within a six minute drive,” says Sharkey. He is also keen to point out the need for a competitive analysis. Just how many other clubs are there in the area and can you compete with them?
“It’s a very difficult industry to get a foothold in now,” says Barry Cronin, executive director at the Central YMCA in London. “It’s reaching saturation point, where the majority of big players are in most of the areas where there’s a need for them demographically.
“To get a financial return you have to have the right site, the right size, in the right place, with the right market – it sounds obvious but if you look around, most of the single sites that are failing just don’t fulfil that simple criteria.”
Cronin also believes assessing your competitors is critical. “Can you afford to charge £40 a month for your little club when LA fitness is charging £40 for twice as much?”
So location and pricing are probably the most important factors to consider before you even think about acquiring a site. But customer service is something that often gets overlooked according to Courteen.
“We recognised that this is predominantly a service industry, and I don’t thing gyms are particularly good at doing that. The industry is full of people that are really into their exercise and love working out, but that is very a-typical of the general population.
“A lot of people that work in health clubs don’t understand people who find doing exercise a pain in the neck, but at the end of the day, this is an entertainment business so you have to make it as enjoyable as possible for people.”
Another crucial thing to remember is that you can’t try to grow too quickly. “You have to try and work inside the business and understand it inside out before you can roll the concept out,” says Courteen. “We made sure we got the business working exactly as we wanted it to work before we tried to grow.”
Sharkey is eager to point out the dangers of taking on too many members. “In our first club we tried to fit 500 members in a 2500sq ft space. We now have 12,000 sq ft for just short of 1000 members. It’s been tempting at times to take on more members but it would take away the personal service we offer.”
Most importantly, if you want any chance of succeeding in this industry, you have to have a clear idea of what you want to achieve from it. It’s a big commitment to take on and not really something that’s going to work out as a part-time hobby. The industry is tough and competitive, so you’ll need to put in a hell of a lot of time and dedication to sustain a successful business.
Register of Exercise Professionals
020 8686 6464
The British Association of Sport and Exercise Sciences
Institute for Sport Parks and Leisure
The Fitness Industry Association
020 7202 4719
Health and Safety Executive book finder