Avoid These 16 Critical Mistakes for Gym Owners
November 25, 2019
One can get started in owning a gym with relative ease compared to some other businesses but keeping it going and making it profitable are another story.
According to Forbes Media, 20% of small businesses fail within their first year and only 50% will make it to year five. Gyms are no exception as they open and close with alarming frequency in most markets.
If you own a gym or aspire to, how can you make your gym not only survive, but thrive and provide a comfortable living for you? The answer is to avoid the common mistakes that gym owners make which hold back their business or make it part of the unfortunate statistic above.
This guide provides you with the 16 most common gym owner mistakes and advice on how to avoid them. Here you’ll find each topic divided into Facility, Marketing, Staff, Sales, Services, and General applications. Don’t get caught saying, “If only I’d known!” Learn about the pitfalls so you can stay out of trouble!
At Exercise.com, our software is helping gym owners grow their businesses and gain financial security with diversified streams of revenue. Learn how we can help your gym grow by scheduling a demo with our team today.
#1 – Too Much Overhead Cost
There’s no quicker way to doom a business than to strap it down with huge debt and bills that exceed its potential revenue. Take extreme care not to make financial commitments that you can’t guarantee you’ll have the money for.
This is particularly true of your biggest expenses: rent and bought or leased equipment. Not only do each of these represent a huge chunk of money, but they also involve irrevocable agreements that you can’t just cancel if you realize it’s unaffordable.
Once you buy equipment there are no returns and once you’ve signed a lease it’s a legally binding document your business will be held liable on.
Err on the side of being too conservative; you can always add or expand later as your gym grows and you have a clear knowledge of what you can commit to financially.
#2 – Locating Where a Previous Gym Closed
Let’s face it, the gym business is tough. It’s also one that’s appealing to a great many well-meaning people who unfortunately don’t have the business acumen to make their passion profitable. Thus, there are constantly gyms going out of business and leaving vacated space for lease.
At first, moving your new gym into the space of a previous one can seem like a good option that will require less renovation and let you open for business sooner. But beware, this can backfire and leave you in a hole in public relations.
The majority of people in your community will not distinguish between your company and the old one. To them, it’s just that gym on First Street and you could inherit some negative publicity you don’t deserve. They may have had a poor reputation. For example, they may have shut down and absconded with members’ prepaid dues.
To be safe and make sure you control the message about your new business, go for a fresh start in new territory. Only if you have thoroughly vetted a gym with plans to buy it out should you take over its space.
#3 – Locating in an Oversaturated Market
We all believe our gym is not like the others, its got something special and the public will recognize that. It’s good to have that faith in yourself but some realism is also in order; if you open a gym in an area where a multitude of fitness businesses already exist, you’ll be in an uphill battle from day one and might not win.
Particularly if the area already has all the options from health clubs, to yoga studios, to powerlifting gyms, you’re competing for a very small piece of the pie; which even if you can claim, is not enough to make your business lucrative.
Do your research and select the smartest location for your gym based around filling a gap in the market. Map out where potential competitors are located and make sure you don’t go too near one that fits the same niche as you.
Here’s the pro move: pay attention to the residential real estate market and learn what areas are beginning to take off and you can get into first.
#4 – Trying to Be a Fit for Everyone
Given how vast the differences can be in different types of training, bodybuilding versus marathon running, versus speed and agility training, you can’t be all things to all people and shouldn’t try to be.
If you’re new to training or just trying to get a business off the ground, there can be intense pressure to sell your service as the solution for everyone. In the short term, this yes-man style may indeed net a handful of clients, but it hurts you in the long run by muddying the waters of your marketing and making it hard for customers to identify what it is that you do.
When potential clients can identify what you do best and see a history of dedication to that thing, they are much more likely to recognize your gym as the go-to place for that goal. Conversely, if your marketing message and identity are always in flux and you seem subject to the prevailing wind of what’s trendy, you will never develop credibility and get noticed by quality clients.
#5 – Failure to Retain Current Members
While we normally think of marketing as an outward effort to acquire new customers, just as much emphasis needs to be placed inward on keeping the customers you have; many gyms fall woefully short in this area.
Here’s an obvious but often ignored truth: a business can’t get ahead if all it does is cycle in new customers to replace old ones.
When gyms focus only on incoming clients, even if they’re successful in obtaining them, they have people leaving out the back door just as fast as they’re coming in the front. As a result, they hover around the same member count and revenue month after month and may even be taking a loss by virtue of paying a sales commission to staff on the new sign-ups.
Increase your focus on the gym community you have already. Host social events and competitions. Take time to meet with clients outside of training sessions when they need extra motivation to stay on track.
It takes an active effort to keep people engaged but that effort is an investment; you’ll keep more clients long-term and will likely gain more by referrals because people will love your community.
#6 – Changing the Marketing Plan Too Often
In fitness training, do you get better by forming a goal and sticking with it or hopping around between different goals? Obviously, the former.
The same is true of your marketing strategy. Constantly changing your objective or bouncing between strategies doesn’t give any of them time to work. What’s more, you may shoot yourself in the foot if every ad campaign portrays your business differently as this won’t allow a brand identity to develop that the public will recognize.
You’re at the right level of variety when you keep a consistent message but show it to the audience in multiple ways. Hence the common practice in digital marketing of running multiple versions of an ad to find which images and verbiage get the best reaction and effect.
According to Zach Williams, CEO of the marketing agency, Luckless Digital, “Successful marketing plans are developed over time. Just as fitness results are correlated to a repetition-based process, marketing initiatives require consistent effort for testing a multitude of variables before you can deduce the success or failure of a plan.”
#7 – Using Price-Cut Promotions
Free, Cheap, and Easy. You may expect these words to attract people to your gym and sometimes they will, but what happens every time is that these promotions lower the perceived value of what your gym offers. Think about it: If you ascribe a cheap price to something, what are you telling customers about the value of it?
It’s not that you shouldn’t give a trial class or a reward for referrals, but don’t make it so often or so easy that people get the impression it isn’t worth much. If you do that, particularly as their introduction to your gym, it may be impossible to raise their opinion or their price of membership up to the level it really should be down the road.
What’s more, you need to consider who you’re attracting. Low price or No Commitment advertising attracts people who either don’t take fitness seriously enough to invest in it or people who are already looking for a way out as soon as they start. These members are of little value to your gym as they don’t contribute to the community, don’t refer others, and are the most likely to give you payment collection problems.
Focus your marketing on enhancing the perceived value of your gym and its services with testimonials and videos that show off the quality of your programs and atmosphere.
#8 – Hiring Friends and Family
It’s an age-old mistake that happens in small businesses of every stripe: mixing personal and business relationships, and it almost never goes well.
You start up a gym with your best friend because that’ll be awesome right?
Another friend’s son needs a summer job so they want you to hire him for the desk.
Your sister’s boyfriend is “really into working out” and she wants you to hire him as a trainer.
Inevitably, the stress of running the business puts a strain on your friendship, the friend’s son is constantly late to work because he just doesn’t care enough, and your future brother-in-law looks at you as a buddy rather than a boss.
Don’t get on this slippery slope or, if you are already, get off now! Choose business partners based on their capability and what objectively beneficial traits they bring to the table. Hire staff on merit and how well they fit your vision, not as a favor.
At the end of the day, no friend or family member cares about your gym as much as you or has as much to lose by it failing. It’s therefore up to you to put the best interest of the business first and mitigate the risk of getting involved with subpar employees.
#9 – Lack of Employee Development
It’s important to the success of an organization to have capable employees and keep them around. You can’t rely on chance to make this happen; great employees may be hard to find and the ones you do have could leave for greener pastures if you don’t develop loyalty. This is where employee development comes in.
You should create an organized path for employees to learn new skills (an example of which is shown in the video above), upgrade existing ones, and stay inspired to improve. This is particularly relevant to anyone who works as a coach or salesperson.
If your business can afford it, it’s great to send trainers to seminars or contribute money to pay for a certification. Because of the expense, gyms that do this often set requirements on the trainer to ensure they’ll benefit from their investment. For example, a minimum of twenty PT sessions per week and at least a year of employment.
But don’t think that the learning experiences have to be formal and end with a certificate; you can create content yourself and give bi-weekly or monthly presentations on business, fitness, and leadership that will greatly benefit staff who have the desire to learn. You can also involve them in the process by having them share skills with each other.
This education combined with one-on-one mentorship will level-up your employees and promote loyalty. After all, talented employees are much more likely to stay with you if the environment of your gym supports their growth and development.
Grow and manage your gym better with Exercise.com
#10 – Lacking a Consistent Process
It’s the sign of a mature business and professional ownership to have standard processes around how you contact leads, set appointments, and conduct the sales consultation.
Small businesses like single-location gyms often go through a tough learning process on the sales front:
In an effort to set themselves apart from the corporate health club world, they shun standard operating procedures in favor of informal interactions that they believe will give their gym a more personal, human feel. It sounds great but inevitably problems arise; you lose track of prospective customers and fail to contact them again or you can’t close sales consistently because your pitch is different every time.
You need to apply big business efficiency to your small business; form consistent practices for customer interactions like appointment setting and sign-ups. Standardize them across all staff members so that what works gets applied consistently.
These things don’t need to be scripted; just have a framework that keeps staff on track and puts the customer’s mind at ease knowing they’re in a business that has its act together.
#11 – Too Many Enrollment Options
Ever go to a restaurant with an enormous menu you must peruse until you’re crosseyed? Then, when you do find something to order, you still feel uncertain whether it was the best option out of so many.
You can create the same issue with gym membership pricing too if you’re not careful and the indecision you’ll cause will be even worse given that a membership or training agreement is a much bigger commitment for the client. The result is the prospective client being much more likely to have to take some time to think about it – the phenomenon is known as choice paralysis, as seen in the above video.
You can avoid this pitfall by making your pricing and package options easy to understand; give them two or three good options. For example, rather than tiered pricing for personal training sessions (1 per week – $70 each, 2 per week – $60 each, etc.) decide on the single figure your training is truly worth and charge a flat fee. With monthly memberships, a simple month-to-month or 12-month contract (with 12-months being slightly discounted) is all you need.
#12 – One-Off Agreements, Inequity Between Members
Unfortunately, it’s common practice for gym managers and salespeople to let their hunger for the sale override their sense of fairness and give some customers discounts or added bonuses while charging others full price. For both moral and practical reasons, this is bad business.
When members know they’re not being charged equally, it drastically reduces their respect for and trust in your business. In turn, they won’t recommend you to anyone they know and likely won’t even consider renewing their own membership down the road.
What’s more, it is incredibly taxing and stressful for a staff member to keep secrets about the different prices people are paying. As a manager, you and your staff will be much happier and more satisfied working in a place with no secret deals where you can openly answer any question that arises concerning pricing.
Now you may be thinking, “What about sales and special promotions? When someone joins under those, can’t I give a discount?”
Yes, you can, but do so carefully and pay attention to how your full-price members will view the deal new members are getting. The last thing you want to do is alienate members who’ve been loyal supporters.
If you want to offer a new member discount, make it only on their initial costs at sign-up, not their ongoing monthly fee as this is what existing members will tend to compare most. It will sit a lot better with them knowing they only missed saving money once, not permanently.
#13 – Lack of Professionalism
For every fitness professional, it seems like there are five jokers who are in the fitness business just because they thought it would be cool to work in a gym. There are personal trainers and gym managers who care more about their own workouts than their clients’ workouts, who wing it on a daily basis, or just don’t seem to take their job seriously.
If those behaviors are allowed to go on continuously, it can hurt the gym significantly by causing client turnover and developing a poor reputation with the public. Professional behavior, on the other hand, secures client loyalty and enhances peoples’ perception of your business not to mention resulting in better client results; the bedrock of the gym or training business.
Being professional as a trainer or gym owner includes:
- Being on time or early for opening the gym, training sessions, any kind of appointment
- Keep conversations with customers focused on them; they don’t pay to hear about you
- Workouts are always planned in advance, never thrown together on the fly
- Showing dedication to a client’s goal and caring about their achievement of it
Notice that nothing on this list precludes staff from enjoying their jobs or anyone in your gym community from having fun there. As the gym owner, setting a high standard for professionalism starts with you. Set the example of how staff members conduct themselves and hold the line.
#14 – Lack of Consistent Principles
While the methods employed in group classes and PT sessions should be flexible enough to be adapted to a variety of clients, those methods should be firmly rooted in principles that are upheld by every staff member in the gym at all times.
If you still train clients as the owner, have employed personal trainers, and group fitness instructors, it won’t do for everyone to have divergent beliefs on how training is done. If Johnny tells members it’s all about progressive overload of a movement but Jane tells them they should be doing constant variety, you have a member base that gains no real understanding of training.
Even worse, it indicates an environment where it’s every man for himself with staff essentially running their own independent, competing programs. As the owner, it’s up to you to decide what your gym is going to stand for and make sure your staff is on board with a set of underlying principles.
#15 – Underutilizing Useful Technology
Are you constantly chasing after clients to collect monthly dues?
What about using worn-out spiral-bound notebooks to record workouts?
Does every staff member have a different schedule making it hard to stay organized?
These are common issues in gyms which, fortunately, have a sound solution – if you’re willing to implement it. That solution is Fitness Business Management (FBM) software, a platform that handles all your business and training-related tasks and unifies them in an all-in-one tool.
Exercise.com provides the top FBM software in the industry which not only handles the common, day-to-day necessities but also provides some incredible bonuses that allow gyms to provide brand new services and increase profits:
- Stand out with a custom-branded app that unifies every aspect of the user’s experience, builds brand credibility, and keeps your brand front-and-center.
- Modernize personal training by building workouts and recording results digitally within your app.
- Send automated assessments and challenges to your members to keep them committed and enthusiastic about your gym.
- Sell digital products like training and nutrition plans online so your business can gain customers anywhere in the world.
- Unified scheduling system for staff members; employees log work hours, sessions, and availability in one place for easy access by management.
Tools like our FBM software can take many of the hassles and mundane work out of gym ownership so you can focus your attention on where you really want to; service quality and business growth.
#16 – Expecting the Entrepreneur Lifestyle
It seems that everywhere you look someone is promoting how they found the easy way to make money doing barely any work and now spend their days traveling, shopping, and dining out. This is the fantasy of being a business owner and the term entrepreneur has come to be hijacked by people who skip from one gig to the next hoping for a windfall while feigning a charmed, care-free lifestyle.
Don’t be fooled. Owning a business, especially a gym, is hard work that is not for the faint of heart. It often involves long hours, unglamorous chores, and a tough time making ends meet.
When you enter this arena, don’t get ahead of yourself by picturing yourself as a CEO. Go in with a blue-collar mindset prepared to get your own hands dirty making the business work. Clean the bathrooms, coach the 5 AM class, learn to get by with less so the gym can have more.
Comfort comes after hard work.
If you own a gym or personal training business, Exercise.com is here for you. Some of the fitness industry’s most successful coaches and business owners are using our software to make their businesses run smoother and provide better service to their clients through unique, fully-customized smartphone apps created by our team.
Schedule a demo and tell us about your business; we’ll share how Exercise.com can help you manage it better!
Colton Tessener is a Strength & Conditioning Coach and gym owner from North Carolina. He has a Bachelor’s degree in Exercise Science from UNC-Wilmington and has 10 years of hands-on experience in coaching clients of all types on improving physical performance. His gym, Arise Athletics, has been recognized locally as Small Business of the Year and named one of the Best Gyms in Wake County (Raleigh, NC).