When you’re thinking about opening a gym, the first question that comes to mind is, “How much does it cost to build a gym?” The fitness market in the United States is expanding rapidly, and opening a gym can be quite lucrative. Because you are considering a gym business, it is crucial to determine the cost of building a gym.
Typically, small to medium sized gyms cost between $50,000 and $150,000 dollars. On the other hand, creating a commercial gym from scratch can cost more than half a million dollars. Additionally, it is critical to look at the criteria from smallest to most important in a clear context. Therefore, let us walk you through the first phase of estimating your financial investment.
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Estimating the Cost of Building a Gym
First, the cost of building a gym depends on the size and layout of the facility. If you want to build a gym from scratch, the cost will be different than using existing gym space. This is the reason why the cost fluctuates with the business plan.
In addition, the expected financial investment required to run a gym can be divided into two parts:
- Start-up or one-time costs
- Maintenance and ongoing costs
Each section includes information on the projected or average cost of opening a health club. Let’s take a closer look below.
Start-up or One-time Costs
To open a fitness centre, you’ll need some strong capital to implement your plan. Here are the things that will cost you time and money to open your business for the first time.
Lease deposit or down payment
The most significant expense of starting a fitness business is the cost of the premises. In addition, the cost of the property depends on the following factors:
- Size and location of the facility
- Leasing or purchasing the property
The typical size of a gym in the United States is 3,000 square feet. However, costs will vary depending on whether you lease or purchase the space.
Leasing a property requires an annual rental payment of $20-30 per square foot. This translates to between $60,000 and $90,000 in rent. Additionally, you may be required to provide your landlord with a 3-5 month lease deposit as security. It is important to note that the rental deposit will be deducted from the account for breach of contract.
On the other hand, if you intend to buy the property. Then you may have to pay a one-time fee to the landlord. So if a 3,000-square-foot space costs $40-60 per square foot. Then expect to pay $120,000-$180,000 to own it.
Construction Costs
Now that you have the rights to the area. It is time to transform it into the ideal gym. Now, you must decide whether to build a steel or brick gym. We recommend that you opt for a prefab metal gym building. This is because metal gymnasium buildings have more advantages.
The cost of building a steel or brick gym in a 3000-square-foot area varies. Below is an exhaustive table showing the minimum, maximum, and average prices for a steel or brick gym.
| Steel gymnasium | Brick gymnasium |
Minimum cost | $311, 250 | $321,750 |
Maximum cost  | $2,314,875 | $2,393,625 |
Average cost | $619,500 | $640,500 |
Both structures offer advantages in terms of cost, durability, and resistance. However, the structure that best suits your type of gymnasium should be selected!
Type of Gymnasium
Here are a few sorts of gyms that you should be aware of before establishing your gym area. Understanding the structural layout and criteria of your selected gym type will make it easier to rebuild or develop the facility. There are several types of gyms and fitness centres:
- Powerlifting gyms
- CrossFit Gyms
- Boutique Gyms
- Personal Training Gyms
- Rock climbing gyms.
- 24-hour access to membership gyms.
- Big box gymnasiums
Taking into account the type of gym and how it should appear, you may quickly turn the mind-mapped gym area into reality. As a result, pay particular attention to the building cost per square foot based on the desired style of gym.
Legal Costs
This is one of the most important parts of the business plan. Gym owners must complete legal requirements before opening their business. To deal with legal issues, you will need to hire an attorney to finalize a lease or sales arrangement. This also includes other legal procedures, so expect to pay $200-$300 per hour.
Additionally, it’s best to spend between $2,000 and $2,500 on legal expenses in the early stages of your business. You may find it inconvenient to pay for an attorney. But consider the convenience and ease of completing the legal process. Most importantly, you can easily focus on the profitable aspects of your business!
Licenses and Permits
Opening a commercial gym requires you to follow the legal procedures for opening a gym business. To avoid hassles later on, it is best to obtain the required permits and licenses. In addition, this protects you from suspicious inspections and questioning. Therefore, completing the legal documents and licenses is a top priority. Here is what you need to do:
- Business License
- Registered trademarks and names
- Health and safety certificate
- Fitness certificates (ACSM, NASM, ACE, ISSA)
- Employer Registration
In addition, it gives your company legitimacy. So be aware of the licensing standards set by your local council. Finally, you can set aside $5,000 for this purpose.
Gym Equipment
From “How much does it cost to build a gym?” started, you have reached the point where you have to buy the right gym equipment. Now is the time to decide whether to buy or rent gym equipment. To do this, make a well-considered decision based on your budget and the equipment you need for your gym.
If the concept of leasing equipment appeals to you, then opt for leasing. Otherwise, you can also purchase gym equipment. However, keep in mind that you will have to pay a monthly maintenance fee. On the other hand, the renter is responsible for maintaining these gym equipment.
Also, make a list of the equipment you need for your gym space. From complete training equipment to non-training equipment, here’s what you’ll need for your commercial gym:
- Cardio equipment such as treadmills, and bikes. It will cost roughly $15,000-$17,000.
- Strength training equipment, such as weights, racks, and lifts. Approximate cost: $20,000-$25,000.
- Functional training equipment such as resistance bands, kettlebells, and exercise balls. Approximate cost: $5,000-$7,000.
- Mirrors and flooring, approximately $8,000-$10,000.
- Sound system, approximately $3,000-$5,000.
- LED and non-training equipment such as chairs, tables, couches, artwork, and wall decorations. Approximate cost is $15,000-$20,000.
- Locker Rooms
- Post-workout facilities (sauna, relaxation therapy)
Due to the high cost of purchasing fitness equipment, leasing is recommended. Leasing gym equipment requires a monthly payment of $3,000-$4,000. This provides access to new and well-maintained equipment in the gym area.
Hardware
After purchasing fitness equipment, you will also need to equip your gym with hardware or technical facilities. In addition to non-training equipment and tools, you will need a way to track payments and consumer access.
In other words, you must have a POS system that integrates with the hardware. To manage cash and maintain client security, you’ll need the following equipment:
- Cash drawers
- Tablets
- Card readers
- Printer
- Security system
Starting costs are estimated to be between $1,400 and $1,500. However, the type and quality of hardware varies. In addition, for commercial gyms, the number of tablets, printers, and cash counters can be increased as needed.
Maintenance and Ongoing Costs
Maintenance and ongoing costs make up the second part of the total cost. Therefore, you must consider changes in costs. It may cost a lot one month and save a lot the next! Therefore, here are your monthly expenses:
Taxes and Salaries
Taxes and salaries will make up a large part of your budget. You can set aside a portion of your taxes quarterly or annually. Typically, applicable taxes include income tax, payroll tax, and municipal sales tax. Since the U.S. tax system taxes business income less. Therefore you can calculate and pay applicable taxes on a quarterly basis.
Salaries and wages are the most important regular monthly expenses. Salaries depend on the number of employees and their ratio to the total membership. As a rule of thumb, one employee should be hired for every 45-60 members. Therefore, approximately 1,100-1,200 members require 24-26 employees.
In addition to front desk staff, cleaners and sales staff, fitness instructors, personal trainers, and gym managers need to be hired. This will cost between $750,000 and $950,000 per year, taking into account typical staff salaries.
In addition, you have the option of hiring personal trainers or having them work independently. Therefore, choose what works best for you while adhering to IRS standards for hiring or creating independent contractors.
Utilities
In addition to your monthly lease payments, you must also deal with utility expenses. The main utility expense for a commercial gym is electricity and a small portion is water.
Since a lot of gym equipment is plugged in and used. Therefore, you can estimate utility expenses based on a 3000-square-foot gym area and equipment. Expect to pay between $2,500 and $2,800 per month for utilities.
However, there may be fluctuations depending on the number of visiting clients and the monthly usage of the gym equipment.
Marketing
In the area of marketing and branding, you will have to hire a marketing firm to create a brand image. Therefore, you should set aside approximately $3,500-$5,000 for marketing purposes.
You can also utilize multiple revenue streams to increase audience engagement and revenue. To reach your target audience, you need to use smart gym marketing methods.
In addition, you must build a strong online presence through Instagram, Facebook, and your website. To accomplish this task, you must set aside a budget of up to $5,500.
Gym Management Software
Investing in complete gym management software will increase the efficiency of your gym’s operations. For example, from front desk chores to scheduling and back-end labor. This will equip your gym with software that is more powerful, personalized, and responsive.
The gym software being considered should have the key features to manage leads, billing, payments, memberships, and staff in one place. In addition, it should allow the mobile app to accurately portray your brand image. In other words, it should fit the needs of the gym business to increase efficiency and pave the way for the future.
You should expect to pay anywhere from $79 to $150 per month for this all-inclusive software.
Gym Insurance
Before opening a gym, you will need to purchase business insurance. In the event of an injury or accident, you need insurance to protect the gym business and yourself. Therefore, you can choose one of five different types of insurance to protect yourself.
Choose the most appropriate coverage, including general liability, professional liability, business income, workers’ compensation, and equipment breakdown. The cost of gym insurance ranges from $500 to $2,500 per month, depending on the coverage you choose.
Miscellaneous Expenses
Miscellaneous expenses include a variety of unrelated costs that may arise from time to time. First, you can hire freelance fitness writers to write material for your gym’s website. Email and website blogs can help you improve your search engine rankings while also positioning yourself as an industry authority.
In addition, it allows your members and audience to get answers to fitness and nutrition-related questions. To ensure content is instructive and entertaining, $500 per month is set aside for fitness writers.
Maintenance and repair costs for gym and non-training equipment are also included. Whether you rent or purchase used equipment, budget $25 per month per piece of equipment. However, there is potential for savings in monthly maintenance costs as only a few pieces of equipment will need to be repaired.
Factors to Consider When Building a Gym
Many factors affect the cost of building a gym. This issue depends on a variety of factors, including the following:
Area Demographics
The more densely populated a place is, the greater will be the customer coverage. The cost of establishing a gym depends on its location, visibility, and public transportation.
Gyms located in densely populated areas with high foot traffic naturally attract consumers. However, new gym owners face huge costs when they start their business in markets or residential areas.
Types of Gyms
Knowing which form of fitness business best meets the needs of your target audience is also an important consideration. You can choose from small and commercial gyms, boutiques, CrossFit gyms, yoga and boxing studios. In other words, the type of gym will affect the starting costs.
Funding Options
Without a doubt, cash is the most important factor in realizing your vision. When considering starting a business, it is vital to explore financing options. There are several ways to obtain government and private loans to start a business. Typically, government loans have lower interest rates than banks and commercial lenders. There are advantages and disadvantages to both types of financing.
Basic Equipment
Starting a commercial gym business also requires careful consideration of the type of equipment to be used. Whether buying or leasing gym equipment, an informed decision must be made while considering the financial options and investment.
Carefully Prepared Business Plan
Starting a gym business is not an easy task. Therefore you must develop a complete business strategy beforehand. In addition, you must develop a complete company plan. This includes defining the mission, researching and outlining startup costs, and calculating profit and loss.
You also need a blueprint to guide you in implementing your business idea. Therefore, keep all the necessary aspects in mind while developing your gym business plan.
Smart Gym Management Software
Additionally, you need a smart technology solution to streamline the operations of your gym. You can’t just rely on your employees to manage the tasks from the front to the back office. Therefore advanced gym management software can effectively streamline operations.
In addition, it improves the efficiency and reliability of membership and employee management while increasing cash flow transparency. Therefore, automate tedious activities with an efficient gym management system.
Summary
The average cost of leasing a gym is between $55,000 and $150,000 dollars. On the other hand, if you purchase a gym space and build it to your specifications, the cost will be more than $500,000 dollars. Additionally, it is important to consider both initial and ongoing costs when developing a gym business plan. Understanding all the costs will make it easier for you to manage your long-term budget.
FAQ
In the past, most commercial buildings were constructed using reinforced concrete. This type of building is strong and durable and has a long lifespan. However, the construction cycle is long and you may have to wait for a long time before you can start operating your gym.
Prefabricated steel buildings, on the other hand, have the advantage of being quick to construct, sturdy, and easy to expand. Therefore, choosing a prefabricated metal gym can shorten the construction cycle and get your gym open for business as soon as possible. This can save you valuable time.
Some frequent expenses associated with running a gym include utilities, staff pay, equipment maintenance, marketing, rent, bookkeeping, legal services, insurance, gym and coaching software, and keeping the gym clean.
General guidelines recommend allocating at least 1-2% of your gym’s original setup cost for emergency maintenance. If you spend $100,000 to open your gym. Then you need to budget for at least $1,000-2,000 in annual expenses to deal with unanticipated complications.
