A business plan is an essential document that not only provides a trajectory for your own business, but it also provides reassurance and hard data for your investors to consider before lending your business money. For your own business, good planning is key to creating success. Knowing exactly what your day-to-day goals are and who you’re targeting gives you a clearer business focus. Once you get clear on those goals, it’s easier to pursue them. Otherwise, without a plan, you’re leaving too much to chance.
For your own business, good planning is key to creating success. Knowing exactly what your day-to-day goals are and who you’re targeting gives you a clearer business focus. Once you get clear on those goals, it’s easier to pursue them. Otherwise, without a plan, you’re leaving too much to chance.
For your investors, your business plan shows them exactly what you’ll be using their money on. They want to see that you’ve considered your fitness business from all different angles and that you understand what you’re getting into. They want to know whether or not your business is worth investing in. Ultimately, they want to see reassurance that they’ll get their money back.
So, for both your business and your investors, we’re going to break down the business plan for you and suggest what to include in each section.
Your business plan for your gym can be adjusted based on your particular type of gym and what applies and what doesn’t. If your gym is brand new, your business plan will also look different than if your gym is established. Make the necessary adjustments as you go along.
It may sound intimidating to put a business plan together, but we’re going to show you just how doable it really is, especially when you tackle it piece by piece.
Here we go:
The very first section you’ll put together is the Executive Summary
The executive summary is basically an overview of your company and what you do. You don’t need to overthink this. It’s just a breakdown of what type of business you plan to operate, what you plan to do with your gym, what population you’ll serve, where your gym is located, and why you’ve chosen that location.
You may also make a general statement about where your business is now and where you want it to be, such as how many members you have and how many members you intend to add. Mention your unique selling proposition (USP), or what sets you apart from other gyms in your area.
Remember that this is just a summary and that more detailed information will follow in the remaining sections and the appendix. In this summary, you need to capture the attention of your investors and show them that you have a well thought out plan. Many professionals suggest that you write this portion of the business plan last in order to summarize everything else in the plan.
Within the executive summary, you’ll want to list what your objectives are for your gym. Do you own a brand-new gym and have a plan for growth? Do you have an established gym with a focus on maintenance? Do you have future plans for your business that you are focusing on? Just write a quick sentence or two about your objectives.
The executive summary may also include your mission statement. Your mission statement contains the guiding principles of your entire business. It focuses on your big-picture ultimate goal. It may take a little more time to put your mission statement together for your gym because it requires more thought, but a few short statements or a short paragraph will suffice.
This section of the executive summary simply states the name(s) of anyone who has ownership in the company. This is the simplest part of the business plan!
Company History or Startup Summary
If you have an established gym, you’ll include your company history here, such as when your business opened, who the founders were, and a very broad overview of anything notable that’s happened at your gym since opening.
If your gym is brand-new, you’ll create a startup summary. You can include your expected startup expenses and where the money will come from.
Products and Services
In this section, you’ll simply list out any of the services your business will provide. You’ll typically include a simple bulleted list of what you intend to offer such as personal training, group exercise classes, equipment, a studio room, childcare, supplements, massage, or anything else.
In this section, you’ll describe the gap you see in your industry or area and how your gym will fulfill it.
To put this section together, you should consider any facets of your business that are unique or give you a competitive advantage such as:
- The specific people your gym will serve, who aren’t being served elsewhere.
- Your central location.
- Your top-tier trainers
- Your affordable prices
- Your USP (i.e. you own a ladies’ only gym with childcare)
The second section of your gym’s business plan is the Market Analysis
This section of your gym’s business plan will require quite a bit of research. It will take a little bit more work to write this part of the plan compared to other portions. But rest assured, you don’t need a business degree to know what to do here.
In this part of the market analysis, you’ll discuss what your industry in general looks like, such as size and growth rate.
Your gym should have a specific target market or niche that you want to focus on. It’s really tempting to say that your gym is for anyone. Sure, you’ll provide a membership to anyone that walks through your doors, no matter who they are. But your marketing and positioning should be focused on a specific audience based on your location and what services you offer.
Your gym may anticipate some market segmentation. For example, your focus may be 30% athletes and 70% regular exercisers. If so, list your market segmentation in this section.
Pinpoint your audience demographics, and then list the needs of this population that you alone can fulfill.
Market Analysis Summary
Part of your market analysis should include a summary of the market you’re working in. Here, you’ll list the population of your city, what percentage your target audience makes of this population, and where your target audience lives. You also want to research your competition to see if you’re both targeting the same population.
For example, if you’re targeting single men in their 20s and 30s, you might find that they live near your city’s college or in a certain apartment-heavy area. Opening a gym near those areas will put you in the best position to market to those men as long as there is enough demand.
Think about any shifts in your city’s population that you want to be the first to target. And also think about the number of potential members you intend to target in your area.
In order to corner your market for your gym business, it’s important to know who your competitors are and how you’re going to differentiate yourself from them. Research your competitors to find out where your window of opportunity lies. Note any viable market that they are not addressing. You’ll also want to examine any barriers of entry such as the investment, location, higher costs of living, etc. You should also decide how you’ll get around those entry barriers.
For example, if there are several other gyms in your area, one barrier may be customers’ existing contracts and familiarity with the other gyms. So, to overcome that barrier, you can offer your target audience a low introductory rate and a free weeklong pass to entice them to make the switch.
Organization and Management will make up the third section of your gym business plan.
Organization and Management
This part of your business plan simply consists of the people that will be involved in your gym and their backgrounds. You’ll list out the owners, the management team, and any other personnel that will work at your gym. You’ll also show the organizational structure, which is basically the hierarchy of who reports to whom.
List the name or names of the owners. You’ll also want to list their background, qualifications, education, and years of service. This is basically a summary of their resumes. You may even include their full resumes in your Appendix if you wish to. In this section, you may also include how the owners will be involved in the gym.
This section is just what it sounds like. You’ll list who your gym managers will be, what their credentials are, and what they’re in charge of/responsible for. As with the owners, you’ll summarize their resumes and credentials, including any personal training certifications they have and any measurable results they’ve gotten. This assures your investors that you have a competent team running your business.
Aside from the owners and the management team, list out any other personnel that you have or plan to hire. Your personnel includes anyone from personal trainers to front desk clerks to maintenance workers. If you already have a team assigned, list out your employees’ distinct talents and how they contribute to the company. Investors want to know that you have well-rounded talent supporting your business.
You may wish to include a chart showing the payroll expectations for each of these employees along with the role of each person.
Provide a complete breakdown of your gym’s hierarchy. Creating a chart with the visual breakdown helps to put this structure into perspective.
Next, your business plan will explore your Sales and Marketing strategy
Sales and Marketing
Your sales and marketing plan details what you’ll do to get word out about your company and how you might entice people to join your gym.
How do you intend to break into the market? In this section, you’ll explain how you plan to use your competitive advantage to break onto the scene. List any trends that you’ve noticed that might work in your favor, such as a growing number of corporations in your area that are offering gym memberships to their employees.
You’ll also list any weaknesses or gaps you notice with competitor gyms in the area that you will capitalize on.
This part is essentially your measurable goals for the next few years.
Possible growth strategies:
- Acquisition of other locations
- Increasing the number of members
- Upselling members on higher-end services
- Targeting a new market
Your sales forecast will take a bit of research and effort. Typically, this section will include your three-year sales forecast with accompanying charts. Taking what you know about your industry, your projected growth rate, and other similar businesses, you will put together a monthly sales chart.
Your communication strategy includes any advertising materials and content that you’ll use to communicate your gym’s products, services, and events. This includes anything from business cards to flyers to personal selling to advertisements. Online content is also important to include.
Next, list out all the places that you intend to market your gym. Common places to advertise a gym include supplement stores, salons, boutiques, and sporting goods stores. Typical online marketing outlets include social media, company websites, and pay-per-click ads.
Based on the growth strategy that you’ve outlined above, what is your plan of action? What strategies will you use daily to reach your goals?
Some example sales strategies:
- Schedule meetings or sales call with prospects.
- Post on 2-3 social media platforms per day.
- Write one blog post per day to help increase online searchability.
- Send out a weekly newsletter to keep prospects up-to-date on news and incentives.
- Follow up on past leads.
- Create a Facebook ad for your gym.
- Add flyers for your gym to the race packets for local running races.
- Hold a live demonstration at your city’s farmer’s market.
At a gym, your main sales activities will be selling memberships or personal training sessions to prospects. Once you know your personal conversion rate, or the percentage of prospects that turn into customers, you can figure out how many people you need to reach out to per day to reach your goals. It’s just a numbers game!
Services and Products
In the executive summary, you listed out the products and services you’ll offer at your gym. In this section, you’ll give a bit more detailed description of your products and services. In addition, you’ll list what the features and benefits will be to your customer. This “sells” your business to your investors.
In this section, you might also mention any intellectual property that you own and how your USP comes into play (i.e. being the only gym to offer childcare in your area).
In this section, you’ll explore the pricing structure you expect to use at your gym for any products or services that you offer. You’ll detail the membership costs, any add-on costs, personal training charges, package deals, and so one. You’ll also need to calculate your gross margin levels.
You may need to consult with an accountant or other professional for this section. You will also need to do some research into the going rates of gym memberships in your area.
The final section of your business plan contains your Financial Plan and Projections.
Financial Plan and Projections
Your investors will likely spend a lot of time in this section since it’s where all the hard numbers lie. You may want to consult your accountant for this section, especially if numbers are not an area of strength for you.
If you intend to request funding from an investor, you need to have a detailed breakdown of how much money you’ll need and exactly where the money will go. This lets the investor know if they’re making a sound investment or not. For a gym, the bulk of your investment will likely be in your lease, your equipment, and your employees’ salaries. You should also list any future funding you might need for things like expansions and updates.
If you’ve been in business for awhile, you should be able to produce a three-year breakdown of your business’s finances as well as a list of your gym collateral. Your accountant should be able to steer this section of the plan.
In the most basic terms, this analysis weighs your gym’s costs against its income. This section should show how much you need to make each month to break even, typically in chart form.
Projected Profit and loss
The chart for this section details your expected profit and loss for the next three years. Many business plans show a monthly breakdown as well as a yearly breakdown for this section.
Projected Cash Flow
The chart for this section shows your expected cash balance vs net cash flow for the next 12 months. The chart will show a breakdown of expected cash received weighed against expenditures.
Projected Balance Sheet
Another way of looking at your finances is by weighing your assets versus your liabilities to calculate your net worth, with the guidance of your accountant.
By showing the comparison of your gym’s sales growth against the industry standards, you can help convince your investors that they are making a wise investment. Use a chart to show how your gym stacks up.
To support your business plan, you may choose to include an Appendix at the end of your business plan.
The appendix is a place where you can add any detailed information that really isn’t appropriate to list in entirety in the business plan.
Things a gym owner might include in the appendix:
- Detailed market research you did
- Credit history
- Legal documents
- Building lease
- Childcare permits
So, that’s it in its entirety! The blueprint for your gym’s business plan.
All you need to do now is begin gathering information to fill in the sections, piece by piece. Several of the sections, you can start right now. Others may require an appointment with your accountant while others still will require some research, much of which can be done online.
To help you get started right now, here are some great resources:
The Small Business Administration has a lot of information about how to put a business plan together, and you can even plug your information into their business plan engine to create a sophisticated printable business plan.
Bplans offers a variety of gym and fitness center business plan examples. It helps to see how others have put theirs together before you tackle your own. Reading some ready-made examples makes the whole process that much more approachable for new business owners.
Entrepreneur provides an entire section on their website about business plan news and topics with the most up-to-date and relevant tips on putting business plans together. They also have step-by-step planning templates to walk you right through the entire process.