Starting a Fitness Business: A Step-by-Step Guide

Starting a fitness business is a heavy lift (pun intended). But it can also be a very rewarding industry to work in. You are helping people accomplish their fitness goals, and in turn, helping them to live healthier lives.

If you're looking to start a business with lucrative potential, this is a great industry to be in—the global health and fitness club market is projected to grow at a rate of 10.6% from 2018 to 2023. Furthermore, according to the 2019 International Health, Racquet and Sportsclub Association (IHSRA) Global Report, the United States health club industry generated a record $32.3 billion in 2018. Comparatively, the United States health club industry only generated $25.8 billion in revenue in 2015.

If you're a fitness junkie, you already enjoy breaking a sweat. Now it's time to put in a different kind of work. Here's everything you need to do when starting a fitness business.

Starting a fitness business in 6 steps

A good fitness business is centered around providing excellent equipment, professional instruction, and personal training. But starting a fitness business requires a lot more than that. Here are the six steps you'll need to take to start your fitness business.

Step 1: Decide what kind of fitness business you want to operate

There are many different kinds of fitness businesses out there. You can become a personal trainer, teach classes, or operate your own facility. There are pros and cons to each. Being a personal trainer is a low overhead venture if you're wondering how to start a fitness business with no money, but it requires in-depth knowledge of exercise and nutrition techniques. Operating a facility, on the other hand, requires a lot of overhead, but you can lean on the expertise of others. There are also gym franchising options to consider when thinking about starting a fitness business. Popular franchises include Crunch Fitness, Planet Fitness, and Pure Barre—you might even consider starting a Crossfit box.

If you're in need of inspiration for starting your fitness business, here are some popular options to consider:

• Zumba studio

• Physical therapy

• Spin classes

• Powerlifting gym

• Yoga studio

• Pilates studio

Step 2: Get trained

The next step in starting a fitness business is to get some training. Whether you want to know how to start a fitness training business or manage a gym, you need to have some background in fitness in order for people to actually think you know what you're doing. Good places to get credentialed include the National Strength and Conditioning Association (NSCA), American Council on Exercise, or National Academy of Sports Medicine. Legitimate certifications are accredited by either the NCCA (National Commission of Certifying Agencies) or the DEAC (Distance Education Accrediting Commission).

Of course, training in fitness isn't the only education you'll need. You're also going to need to do a lot of research into learning exactly what it takes to start a business.

Step 3: Write a business plan and select an entity

This step is pretty similar regardless of whether you're starting a fitness business or any other kind of business. When you’re writing a business plan, there’s a lot you'll need to include. You might find it helpful to use a business plan template to make sure you cover all of your bases.

Factors to consider when writing your business plan include:

• An analysis of the market

• Who your competition is

• Marketing and sales plan

• Financial plan and projections

The key is to make sure there's a need for your business and that you'll be able to generate enough business to continue operating after you've invested so much to get started.

Another important part of your business plan when starting up a fitness business is selecting your business entity. Given the nature of the fitness business, you should go with a business entity that offers owners some protection from liability. A limited liability partnership or limited liability company might make the most sense for you if you’re looking for some liability protection.

Step 4: Get necessary permits and insurance

There may be certain business licenses and permits required to operate a gym in your state and locality. You should check with your town, city, or county clerk’s office to make sure you're following all the regulations outlined by your various governing agencies for starting a fitness business.

One permit you'll most certainly need is a certificate of occupancy. A certificate of occupancy confirms that all building codes, zoning laws, and government regulations have been met. If you're leasing your gym space, it is typically the landlord's responsibility to obtain a certificate of occupancy.

Operating a gym also comes with some risks that opening another business might not. People are going to be working out, using equipment, walking around things they can trip over, and doing other potentially hazardous activities. You’ll want to make sure you get small business insurance for a host of scenarios so that if anything happens to someone while they’re in your gym, the business is covered.

You also want to be covered in the event that equipment is stolen or damaged. You might even want to encourage any instructors you hire to get personal trainer insurance as well.

Step 5: Get an EIN

There are a lot of reasons you need an employer identification number (EIN). It allows you to file taxes and avoid tax penalties, open a business bank account, speed up loan applications, establish business credit, and a lot more.

You can apply for an employer identification number online through the IRS. If you register with the IRS online, you should receive an EIN within minutes. Note that fitness businesses operating as sole proprietorships don't need an EIN, but it is still a good idea to get one for the aforementioned benefits.

Step 6: Get funding

If you're wondering how to start a fitness business with no money, some ventures aren't cheap, but you do have funding options that may work for you. According to health club consultant Bryan O'Rourke, costs start at $30,000 but can quickly soar to $500,000. What's more, getting a fitness business up and running takes some time—so you'll need to have a little in the bank.

If you’re looking for some startup funding there are a few options available to you, such as an SBA loan, a business line of credit, or a personal loan.

A business line of credit would give you access to money that you could pull from if you needed it in your early days of starting a fitness business. The difference between a line of credit and a loan is that while the money is available to you, you only have to pay interest on the funds you actually draw on.

There's also gym equipment financing, which is another great option if you're wondering how to start a fitness business with no money. The gym equipment purchased with the proceeds of the financing will, in turn, act as collateral for the gym equipment finance loan used to purchase it.

7 tips for starting a fitness business

Now that you know the steps you need to take when starting a fitness business, let's provide you with some tips that will help your business thrive. To provide you with the best advice possible, we talked to entrepreneurs who successfully started their own fitness business. Here's what they had to say:

1. Personalize your fitness business

The health and fitness club market is expected to grow to be a $147.1 billion industry by 2024, with an emphasis on personalized training.

Consider ClassPass, which operates in 18 countries around the world and is valued at $600 million. ClassPass teams up with classes at boutique studios to offer everything from cycling to yoga to dance to martial arts for its members. For a $19-$199 (which varies by subscription plan) monthly fee, members enjoy unlimited classes to studios in the ClassPass network and can attend the same studio up to a certain limit each month.

ClassPass’ success story is one example that customers want specialized, niche workouts offered in fitness boutique studios. If you're wondering how to start a fitness class business that will be attractive to a growing clientele, this is one example to follow. Other such examples include ShadowBox, a fitness boxing studio; GoRow Studios, a gym that specializes in workouts using rowing machines; then there’s modelFIT, a gym in New York and Los Angeles that is "marrying mindful nutrition with mindful exercise" and is a popular hangout for celebrities.

“People are kind of shying away from the lone wolf workout of going to a box or a membership gym because the [boutique fitness] market is more efficient,” says Eric Posner, CEO and co-founder of boutique cycling studio Swerve Fitness in New York City. “You get a better workout in a less amount of time and pay less than you would for a personal trainer by going to a fitness boutique.”

2. Make your fitness studio a place to hang out

In a panel discussion hosted by American Express' U.S. Small Merchants Group, ClassPass founder Payal Kadakia said fitness studios are “like the new restaurant scene"—it’s not just about burning calories and working out; it’s about the experience and lifestyle. It's paramount you know this if you want to know how to start a fitness business.

This concept of hanging out at your workout spot is how Posner, along with his co-founders Chelsea Kocis and John Henry McNierney came up with the idea for Swerve. It was just a few years ago that the three co-founders, who at the time were college athletes-turned-finance professionals, found themselves tired of taking clients through the typical dinner-and-drinks routine. Instead, they took them to cycling classes.

"We found this to be an unbelievable way to build relationships that were meaningful, as opposed to the typical steak dinners and drinks," says Posner.

“We were going to mostly cycling classes and what we saw about these classes was there were unbelievable ways to get an efficient workout in and do it with other people, but [these classes] weren't capturing the camaraderie of going with a group or going with other people. It was very individualistic,” continues Posner. “So, that's how we came up with the concept of a team-inspired indoor cycling workout.”

Making your gym a place people want to hang not only brings customers in the door, but also makes your fitness business a place they'll want to return to again and again.

3. Incorporate data into your services

We live in a data-driven world, so it makes sense that people want data-driven workouts. People want to see how many calories they burned, how their current performance compares to their past averages, and how they compare to other people—basically what they achieve when they leave a workout session.

Take the technologically-savvy Swerve workout room for example, where riders are divided into teams and try to bike their way to the highest score.

“Technology is playing a big role and the way that [Swerve was] able to tap into that is we have a console—you have a console on your bike—and you see your own personal metrics on this console during class,” explains Posner. “And there are big flat screens behind the instructors where you see your team's average score. After class, all your stats—and this shows how many miles you biked, how many calories you burned, where you ranked in class, and all that—can be viewed on your account profile.”

“So, we find that to be a huge motivating tactic for our riders… and that kind of adds another layer of accountability and it's very results-driven.” Want to know how to start a fitness business that will keep clients coming back? Give them the tools and data to accomplish their personal fitness goals.

4. Specialize in a type of workout or demographic

When Alana Kessler opened the doors to her yoga studio in 2009, she quickly realized classes offered to pregnant mothers who have busy, working lives basically didn’t exist. As a result, Kessler made prenatal classes essential to Sangha Yoga Shala's list of classes offered and has since then built a name for herself.

The key to how to start a fitness training business that offers quality, specialized classes is that you can’t skimp on good trainers. Spend time training instructors and finding excellent ones who will give your customers consistent results every time they’re in front of the class. If you want to know how to start a fitness business, the first thing you should figure out is how to acquire awesome trainer talent.

“I encourage my teachers to build,” advises Kessler. “I incentivize them to build with me. Some [studios] might tap out at a low rate to keep their overhead low, but I pay my teachers well.”

5. Get your studio on social media

Vanessa Packer, co-founder of modelFIT, told the audience at American Express' panel discussion that Instagram played an “instrumental part” in helping modelFIT become a lifestyle instead of just a gym. This means reaching out and engaging with your community on social media.

Do you make it easy for customers to post about their experience? Do you respond in a timely manner that builds connections with existing clients? Additionally, have you thought about untraditional marketing strategies to spread the word for your business? For example, ClassPass gave away passes to influential fitness bloggers in the beginning to quickly get their story out there. What social media marketing techniques could your fitness business do?

6. You'll need to wear many hats

According to Tyler Sellers, senior coach at Total Shape, starting a fitness business requires a lot more than just fitness instruction.

"You must be well-prepared for the behind-the-scenes logistics, especially at the start. As a piece of advice, being a small business owner means that you are the accountant, the administrator, the marketer, and the trainer at the same time," Sellers says.

7. Hire excellent staff

When Laurel Roach started TriFIT Wellness, a corporate wellness training facility in Phoenix, AZ, she says she didn't have a background in the fitness business. Therefore, she had to lean on the staff she hired in order to make her business a success.

"I recommend hiring the most qualified trainers because the wellness industry is notoriously under-regulated," says Roach. "Genuinely passionate employees are difficult to replace so make it a priority to hire and retain the trainers that make your customers feel like an all-star."

The bottom line

Starting a fitness business is a lot of hard work. But if you succeed, you'll join a booming industry that helps people live their life to the fullest.