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.