Just how much does it cost to open a gym? In this guide we’ll explore all the typical costs you’ll need to be prepared for.
Finance. It’s front of mind for everyone in the UK right now. McKinsey research shows that 69% of UK consumers are concerned by rising prices, and those concerns are shared by business owners too.
Because all those pressures impacting on household budgets are affecting business budgets too. Cost of premises, cost of energy – these are just a few of the things you’ll need to consider when you open a new health and fitness club.
So, what does opening a gym cost? It’s a considerable investment. There are ongoing and one-off costs. And fixed costs, variable costs, and specific costs of opening a particular type of club. Then there’s the costs involved in opening an independent gym compared to a franchise fitness club.
Thinking about opening a gym or fitness club? You need to be aware of the many costs, bills, and future expenses. So, you are prepared for these and have a robust business plan to cover gym opening costs.
We’re here to help. In this guide, we’ll run through everything you need to know about the cost of opening a new gym. And provide practical tips to help you reduce spend by making smarter decisions.
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The types of gym opening costs
Not all costs are created equal. When you start to look at the cost of opening a gym in the UK, it’s easy to look at the big-ticket items. The places you must spend big today. Like those expensive new rowing machines, or that set of barbells, or decorating your gym.
Things that you pay for once that will kick start your gym and propel you to rapid success.
Unfortunately, that’s not the way business works. Yes, you will have initial one-off costs, but success takes time.
Even for the biggest brands in the world.
“If you really look closely, most overnight successes took a long time.’” – Steve Jobs
So, when you’re looking at costs and setting your budgets, you need to consider both those one-off costs, and the ongoing costs to factor in. Week by week, month by month, year by year.
When it comes to opening a new gym, one-off costs tend to involve items or supplies that you’ll need on day one. Your gym essentials.
Imagine walking into a new gym as a customer. What would you expect to see? Most of these things will involve an up-front, one-off cost. First, there’s your space. If you’re buying outright that’s a significant one-off cost. If you rent, any remodelling or decorating work must be paid for.
Then there’s gym equipment. Your members expect treadmills, exercise bikes, running machines, free weights… Some of these can be leased. If you’re buying outright that’s another one-off cost to consider.
What else would you expect to see? Team members. They need to be hired and hiring costs money. And they need to be uniformed and uniforms cost money. Plus they need computer systems, payment systems, insurance, and maybe licences too.
All these things need to be paid for before you welcome in your first members. And can therefore be considered the up-front costs of opening your gym. That means you’ll need funding in place, whether it’s from investors, loans, or your own savings.
Typical one-off costs include:
One-off costs tend to be things that your members would notice. Whereas ongoing costs are usually for the things needed to grow your business and keep everything running smoothly.
Think of the little things that your members won’t necessarily notice. They expect a clean gym. Most won’t notice the money you have to spend on cleaning supplies.
They want to see the same friendly staff. Yet most don’t think about the wages you pay to retain them.
And they want a simple, seamless gym membership experience with easy booking, gym entry and payments. Without having to give a second thought to the software you’ve put in place to make it possible.
Sometimes ongoing costs can save you money on your one-off costs, in the short term at least. Take your gym equipment. It costs an average of £35,000 to fit out a gym with enough machines to serve 200 members.
Leasing those same machines could cost around £2,500 per month. Of course, that lease may last for two years or more. Leaving you paying more in total (even considering ongoing support and maintenance as part of the deal). For the first 14 months you’ll have saved money by leasing.
The challenge is making sure that once those 14 months are up, you’ve invested in growing your business. So your ongoing costs are being more than offset by the money you’re bringing in through memberships and other sales. Especially because you’ll also be paying back any money you borrowed to cover the initial one-off expenses.
Ongoing costs include:
The exact cost of opening your gym will depend on the specific one-off and ongoing purchases you need to make. Later in this guide we’ll start to look at numbers. Before then, you need to make the first big decision.
What kind of gym are you going to open?
Why the type of gym you open impacts the cost of opening
There isn’t a one-size-fits all method to opening a gym. The costs you incur will be down to a few factors. There’s your own personal journey, the things that brought you to this point in your career. And there’s the type of gym you want to run.
Because not all gyms aim to attract the same type of member. If you’re running a budget gym, you’re aiming for larger numbers of members who can afford or want to spend less. At the other end of the market, your premium gym will charge higher fees to a smaller, more select group of members.
These different types of members expect different things from your new gym. And that means different costs for you. Here’s what to expect:
You might imagine that budget gyms are cheaper to set up than other types of gym. And you’d be right – to a point. You don’t need the flashiest smart machines, as people paying for a budget gym experience don’t expect bells and whistles.
They want access to reliable, well-maintained machines at an affordable price. And that maintenance is key. Budget doesn’t mean you can cut corners. The only people who seek out a dank, dirty gym are challengers in boxing films trying to prove how tough they are! Even an underground bodybuilding gym needs to be clean and welcoming.
While you don’t need hi-tech machines, you do need more of the basic options. Because you’ll need more members overall to make a profit, you need to make sure more equipment is available. A good rule of thumb is to aim to have enough equipment for 15% of your membership base to use it at any one time.
Premium gym members pay more for a better experience. So, while you need fewer members and fewer machines overall, they’re paying for the very best.
That means investing in added value for your members. They don’t just want a shower after working out. They might want a recovery ice bath, or time spent in the sauna, or a massage – all things you’ll need to provide. All things that cost money.
And it’s not only equipment and facilities you need to invest in. Premium members want a premium experience from the second they walk in the door. Crisp, clean uniforms for your team. The right post-workout nutrition in your café. And a high class look and feel to your signage and decor.
You can’t afford to cut corners when opening a premium gym. And that costs.
With a mid-market gym, your costs will tend to fall somewhere between the requirements for a budget and a premium gym.
You’ll need equipment that’s better than basic, although not necessarily top-of-the-line. Members expect more than those at a basic gym. So, you’ll need to consider things like connectivity and progress tracking – all of which add to per-machine costs.
Branding is also a consideration. A mid-market gym can’t get away with the rudimentary feel of a budget option.
Members will also expect more in the way of options and classes. Yoga or Pilates studios, personal training options, and group fitness classes all help a mid-market gym rise above a budget gym. You’ll need to account for the costs of these too.
With boutique gyms, costs become a little more complex than the membership price-based types of gym.
A boutique gym will usually be smaller and more intimate. This will likely cut down on your property costs, depending on your chosen location. You’ll also typically be focused on one specific area of fitness, so you don’t need the breadth of equipment that other gyms do. And that too will lower costs.
What you lack in breadth, you need to make up in depth. Members won’t find everything at a boutique gym, but what they do find has to be the very best. A boutique gym is home to a fitness community, an exclusive location for members who take fitness seriously.
For boutique gyms you may want to consider an investment in better air quality, sunlight, and living plants. All creating a more nature-focused environment for members.
It’s not a place where you can skimp on quality, and as we’ve made clear so far in this guide, quality costs.
And of course, even having the opportunity to decide on the type of gym you want to open relies on having the freedom to make that decision.
What if the decision’s already been made elsewhere? What if you’re opening a franchise gym?
Opening an independent gym vs opening a franchise gym
For many new gym owners, trading in a little freedom in exchange for the security and support that comes with opening a gym in partnership with a UK franchise seems like a fair deal.
It might not be an easy decision to make. Both the independent and franchise routes have their own strengths and their own weaknesses. Plus, their own cost implications.
Choosing the right option for you is all about weighing up the pros and cons.
What is an independent gym?
An independent gym is a single gym operating in one location that’s owned and operated by either an individual, or a group of directors and investors. They came up with the idea for the gym. And they call all the shots and keep all the profits.
What is a franchise gym?
Instead of starting from scratch, a potential owner pays a franchising fee to a larger company and opens a new location in that franchise’s name. In exchange for support and brand recognition, franchisees pay a portion of their profits to the parent company.
The pros and cons
- Pro: Total freedom to make business decisions and set standards
- Con: No brand name recognition, starting with a blank slate
- Pro: You’re on your own – success and reputation is down to your hard work
- Con: You’re on your own – you’ll need to build a name, processes, everything
- Pro: No franchise fees, no ongoing royalty fees
- Con: It’s harder to secure funding with only your own reputation to go on
- Con: Have to agree to franchise rules, standards and policies
- Pro: Members already know and trust a franchise
- Con: Performance of other gyms can affect the brand’s – and your – reputation
- Pro: You’re supported – with advertising, advice, and tried-and-tested processes
- Con: Up-front franchise fees of £50k-£150k or more, ongoing royalties of 5%+
- Pro: Banks and lenders know and trust franchises and are more likely to lend
As you can see, there’s no right or wrong answer when it comes to joining a franchise over opening an independent gym. Yes, costs may be higher as a franchise, yet that’s counteracted by having a ready-made base of potential members.
The choice you make will depend on your circumstances, and what you think is most important about running your own gym.
If you want the freedom to call the shots whatever happens, being a franchisee may not suit you. If you aren’t prepared to build a reputation over time, then you’ll struggle as an independent.
Whichever you choose, while you’re answering the question of how much it costs to open a gym in the UK – money out, you’ll need to think about money in too.
How are you going to price memberships so that your club makes money?
Pricing – how your club will make money
So far in this guide, we’ve looked at money going out. It’s just as important to know how much money will be coming in. That will help you budget successfully to turn a profit.
There certainly is money to be made in the gym business. According to the 2022 State of the Fitness Industry report from LeisureDB, the average cost of a gym membership in the UK is £42.99 per month. That figure rises to over £60 in London and drops to below £35 in Northern Ireland, which in turn will affect how much you could – and should – charge.
You need to work out what members should pay, and when they should pay it. You need a robust gym pricing strategy.
Members expect flexibility. If you offer only a single membership option or pricing model, they might soon start looking elsewhere.
At the very least you need to offer monthly and annual memberships.
Monthly memberships are the most popular type of pricing model in the UK. Members sign up to a year-long contract for a set monthly fee. And then once per month they pay you by Direct Debit.
You can offer greater flexibility, with lower monthly fees for longer commitments and vice versa. Or even rolling monthly contracts.
Having your members tied in to paying the same fee every month for a predictable length of time lets you plan and forecast income . After all, you’ll know exactly how much money is set to come in from your existing members next month.
Annual memberships ask for a larger financial commitment from your members. In return members get a discount on your standard monthly rates.
The benefit to your gym business is clear. You already have the money, it’s yours, you can spend it.
Yet there is a significant drawback. The large upfront cost for your members every year means that they’re less likely to renew. There’s more effort needed to renew than a monthly membership that rolls on each month.
This risk can be offset with better gym management software. Software focused on increasing retention with automated renewal reminders.
More casual membership models include pay-as-you-go memberships and prepaid passes. These let new members try out your gym and only pay a small fee each time they visit.
This can be helpful for attracting new members. Casual memberships give you less financial security and make accurate financial planning tougher.
Casual options are an effective way to frame the value of your monthly and annual memberships. And can be the start of a funnel designed to move new members towards monthly subscriptions.
How does the type of gym affect membership costs?
The type of gym you’re preparing to open will also influence the prices you offer.
Budget gyms need to offer a low price point. Members want a basic, good quality workout at an affordable rate. That means high volume, low margin pricing is the order of the day.
Your aim should be selling as many memberships as possible at the lowest price you can afford.
As a mid-market gym, pricing is a matter of balance. You’re offering better facilities than a budget option. The price you charge will be determined by your competitors at either end of the spectrum.
Some of your members will be trading up from a budget gym and will want to pay a little more for better quality. Others will be trading down from a premium club where they didn’t use enough of the services on offer to justify the higher price.
So, the fee you settle on should be attractive to both groups while still making sure you’re making a profit.
Premium gyms attract a clientele that’s willing to pay more for quality. Charge the highest rate you’re comfortable with – and that reflects the local market.
It’s important to make sure this extra fee gives members access to a luxury workout environment. One with high-end equipment and a personalised experience. Otherwise, it’s possible you’ll see members tempted in to trading down to your mid-market competitors.
Finally, boutique gyms can charge the highest prices of all. And it’s vital that the cost your members pay is reflected by the value they receive.
Boutique members demand the best possible service, with tailored experiences and ongoing support.
How do you create a winning pricing strategy?
Creating a winning strategy takes hard work and thought. And that’s why we’ve put together our gym pricing strategy guide to explain the process in more detail.
In it, you’ll find 11 key steps you can take to create a winning strategy, all of which will have an impact on the cost of opening your new gym:
- Understand what all your set-up and ongoing costs are, and your breakeven point
- Calculate the membership capacity of your club
- Research your competitors and their prices
- Understand the demographics of your target market
- Create your tiered membership packages
- Set your joining fees to cover the admin costs of winning a new member
- Look for any upselling or cross-selling opportunities for added extras
- Use your gym management software to set up your packages and fees
- Set up pre-sales ahead of your new gym’s launch so that you have members from day one
- Make sure your prices reflect your brand positioning
- Invest in your marketing and your website to explain and sell your pricing and packages
There’s a lot to consider in our gym pricing strategy guide, so make sure you bookmark it for later reference.
The first step of your strategy is to fully understand the costs of opening a new gym. So, let’s break down those costs in full.
How much does it cost to open a gym in the UK? – The breakdown
Earlier in our guide, we looked at the two different types of costs you need to consider when examining how much it costs to open a UK gym.
There are one-off costs, typically the things you need to buy up-front to open your gym in the first place.
And there are ongoing costs, monthly fees for the things you need to buy to keep your gym running smoothly.
Let’s look at some average pricing for each. The exact figures will depend on the suppliers you find and the location you open a gym in. These figures should give you a good idea of how much money you’ll need.
- Purchase costs (per square foot): £250 – £350
- Rent deposit (6 months, per square foot): £60 – £180
- Treadmill (purchase): £2,000
- Rowing machine (purchase): £1,000
- Bench press (purchase): £1,500
- Cross trainers (purchase): £800
- 150kg weight set (purchase): £500
- Overall equipment cost per 20 members (purchase): £39,500
- Initial investment (low-end): £19,950 (Dawn Breakers)
- Initial investment (high-end): £852,382 (Gold’s Gym)
- Marketing (launch campaign): £3,000
- Website: £3,000
- POS hardware: £1,000
- Hiring new staff (per employee): £500 – £3,000
- Software and access control set up: £1,250- £2,000
Costs are given per calendar month unless specified
Property and utilities
- Rental costs (per square foot): £10 – £30
- Monthly mortgage payments: £3,000 – £7,000
- Utilities: £2,000
- Treadmill (lease): £240
- Rowing machine (lease): £80
- Bench press (lease): £68
- Cross trainers (lease): £160
- 150kg weight set (lease): £50
- Overall equipment cost per 20 members (lease): £2,048
- Monthly fees (fixed fee): £500- £2,000
- Monthly fees (percentage): 8% of revenue
- Insurance (price per year): £1,500 – £3,000
- Marketing: £1,500
- Accountancy fees: £200
- Gym management software and membership payments: £500 – £700
- Maintenance and repairs: £250 – £750
- Miscellaneous expenses: £500
In short, it’ll cost in the region of £75,000 – £100,000 in upfront costs to open your gym, more if you’re running a franchise. And your monthly costs could easily top £20,000.
That’s a considerable investment. But there are ways to get more bang for your buck every month.
How to operate more cost effectively
The cost of opening a gym in the UK is high. That’s true of almost any business with a physical location, anywhere in the country.
That doesn’t mean you should resign yourself to spending more than you have to. Yes, there are ongoing costs to consider, every single month. And yes, those costs will chip away at the money you’re taking in membership fees and other sales.
The lower you can get those ongoing costs and the more value you can get from your investments. The more profits you’ll make, and the more rewarding opening your new gym will be. Which is why there’s one thing you should do from the day you first open…
Use gym management software as soon as you open your new gym
The right gym management software can help you operate in a more cost-effective way. First, there’s the obvious saving. There are endless manual tasks that can be automated or made easier using the right software. Software that costs much less than extra salaries or working yourself to the point of burnout.
The benefits of gym management software go far beyond the obvious. Let’s take a look.
- It helps make sure you’re paid on time. Running a profitable new gym is all about money in vs money out. Software makes sure money from memberships comes in smoothly and regularly. Automated reminders and automatic payments maximise collection rates.
- It makes communications simple. Every second you or your team spends sending an email or a text is a second that you’re paying for. Gym management software has in-built email and SMS capabilities. So, you can automate things like marketing, feedback requests and reminders. Improving your member experience and helping you grow your business will take less effort.
- It makes task management easy. Gym management software can automate daily tasks to keep everything running smoothly. And comprehensive reporting gives you quick access to the information you need for decision making.
- It makes marketing cost-effective. Marketing is expensive. And is vital, both to attract new members and engage and retain existing ones. Software that can help retain your members and automatically upsell new services. All without needing to pay for an expert agency, potentially making – and saving – you thousands.
- It improves member experience. Finally, gym management software means that from the day you open your new gym, members will have a great experience. Access control, sign-ups, renewals, bookings, and more. Software means that using your new gym is simple, fun, and rewarding for members.
The wrap up…
How much does it cost to open a gym in the UK? It depends on the type of gym you’re opening, the location you’re opening in, and the types of services you’re offering.
At a minimum, you should expect to pay £75,000 in one-off costs (plus premises costs) and around £15,000 per month.
With the right software and the right approach, you can make running your gym much more cost effective. And that’ll change your mindset from ‘how much will it cost to open a gym’, to ‘how much will I earn by opening a gym’.
Get the fuel to go further. Request a demo to see the value that Xplor Gym can bring to your fitness business.
Article by Xplor Gym
First published: 30 May 2023
Last updated: 31 October 2023