Costs to start a gym: a practical breakdown

costs to start a gym

The costs to start a gym can determine whether your business will sink or exceed expectations. Beginning to save for these starting costs ensures your gym is prepared to handle any hurdles you encounter along the way.
There are a few things to keep in mind in the process of building your fitness empire. We’d be lying to you if the costs to start a gym weren’t one of the biggest factors at play.
Let’s dive into an accurate breakdown – how much does it cost to start a gym? Then you’ll be able to accurately predict what you’ll need to save to get started and how much you’ll need to make to keep going.

Is the cost of opening a gym worth it?

Opening a gym costs more than people might expect it to, which can cause you to question whether or not it’s worth the investment. If you start and manage your business effectively, however, running a gym of any size can be a lucrative career choice. 
The most important things to consider when opening a gym are the revenue you’ll need to make to offset your costs, and the business plan you set forward before you begin.

How revenue offsets costs for opening a gym

Say for instance you have a gym with the capacity to work with 300 members per month. If you charge $30 per month for a basic membership, you would be bringing in $9,000 per month before taxes. 

That estimate doesn’t even count upper-tier memberships, per-class pricing, or merchandise like gym clothes or bags. These extra income streams would further drive your business’s success once membership begins to climb.
The revenue earned from your members would be more than enough to offset the monthly cost of running a gym in most places. It is relatively easy to achieve this level of success within the first six months to a year of opening.

Why having a gym costs business plan is important

In order to actually achieve a regular and growing membership rate, you need to approach your gym with a confident plan from the get-go. This is why it is important to create a business plan document. 

A gym business plan outlines how you intend to operate your fitness business. It’s used widely in the process of starting a business, from legal registration to hiring employees.

A business plan often includes documents such as:

  • Your gym’s business type
  • The leadership and employee structure of the gym
  • A detailed budget plan for both initial and recurring costs
  • A detailed marketing plan
  • An analysis of competitive businesses in your area
  • An analysis of your business’s strengths and weaknesses
  • Outlines for business operation and growth

If you have an appropriate gym business plan and a strong daily operation strategy, then a gym becomes an investment that pays for itself in relatively quick order. In this article, we’ll focus on the budgeting aspect of this plan.

Gym startup costs by type

Gym startup costs are going to vary depending on the type of gym that you’re building. 

The least expensive gym to build would be a home gym – if you are already a homeowner, you can set this up with just one or two machines and some basic weights and mats, which may cost you up to a couple of thousand dollars. 

Up from that, you might choose to start a small-time studio gym, which will require a few more machines and rented space, so can cost you upwards of $10,000.

Commercial versus private gyms

There are also different costs associated with opening a commercial versus a private gym. Commercial gyms tend to have cheaper membership options and no limits on who can become a member, meaning that they appeal to a wider audience, but they cannot cater to their members on an individual level without adding an extra tier of membership. 
Private gyms, on the other hand, limit who can become a member and are often more expensive in terms of base membership, but they often provide a much more specialized and individualized experience to their members.

Is it better to open a commercial gym or a private gym?

It’s difficult to answer whether a commercial gym or a private gym is the better option. The answer depends largely on you as a person and what you want from your business.

Commercial gyms tend to be less expensive to open, but private gyms make more in terms of monthly revenue than their equally-sized commercial counterparts. Still, both can be lucrative options when done right.

When deciding, remember which demographic you are catering to and what sort of services you want to offer, as well as what marketing resources you have for your fitness business.

Large gyms and specialized gyms

If you’re opening a large gym, whether it’s commercial or private, you’ll need the most of everything. This includes equipment and plenty of space, and you’ll need to start hiring employees to handle membership administration, cleaning, and instruction, as well as find a space to operate from and fill that space with equipment. 

The startup costs of opening a gym in a commercial setting can range into six figures. 

Beyond that, you might choose to open a specialized gym; this will cause your costs to vary greatly. For example, spa start-up costs are very different from gymnastics equipment costs, and that is wildly different from the cost to open a CrossFit gym. 

Each requires specialized equipment and training and may require different licensing and business fees. If you plan to open a specialized gym, research the unique qualifications you may need well ahead of time.

Choosing an example gym size and type

It would be nearly impossible to give an exact estimate for the startup costs for opening a gym that applies to every kind of gym and fitness center it is possible to open.

So, let’s focus on gym startup costs for a mid-range standard commercial gym; this way, you can scale them up or down depending on the kind of gym you want to open and the services you choose to offer. 

While there is no one standard gym size, we can use the average range to create a reasonable example to work with. Since the average size of a gym in square feet ranges from under 2,000 square feet to more than 10,000 depending on where the gym is and whether it’s part of a larger chain or a small boutique fitness studio. 

We’re going to use an estimate of 3,000 square feet. This would allow you to house up to about 300 members at a time and would be enough space for two or three of each machine and some clear instruction space.

How much does it cost to open a gym?

If you’re wondering how to start a gym, you should start with a business plan and a budget estimate for the costs of opening a gym. Your business plan should include:

  • The name, business type, and owners of your gym
  • Where it will operate and to whom it will cater
  • Your expected revenue range and how you will make that revenue
  • How you will market your business
  • A survey of competing businesses in the area
  • Your expected startup costs and gym expenses

The actual cost of starting a gym all depends on your location’s area, demographic, rental options, loan choices, and financing choices. It also depends on your personal background and business decisions. There are too many options at play to tell you exactly what your costs to start a gym will be – that’s up to you to gather. We can ensure you’ll need to create a spreadsheet of your expected costs. Not sure what all of that will be? Our guide should help.

How can Hapana help your boutique fitness studio? Request a demo to learn more.

Legal requirements for opening a gym

The step in opening a gym is going through the appropriate legal hoops, including forming a legal business entity, registering for taxes, obtaining licenses and permits, and acquiring insurance. The total cost ranges between $750 and $3,400, not including taxes, which vary depending on your gym’s income.

Forming a legal entity and EINs

The first thing that you need to do to open a gym is establish a legal business. But what kind of business is a gym? That depends; you’ll want to decide what form your gym will take as a legal entity, and you have a couple of options. 

The most common for gyms is a Limited Liability Company (LLC), a sole proprietorship (meaning owned only by you), or a partnership (meaning owned by you and someone else). LLCs are offered legal protections when it comes to lawsuits that help to prevent the owner of the business from being made liable for any issues with the business, so they are a good choice.

Registering as an LLC costs between $50 and $800, depending on whether you file for yourself or have professional legal assistance.

Taxes

Once you’ve established a legal business entity, you’ll have to register to pay taxes as that entity in order to properly estimate your gym startup costs. This means going through the appropriate local and federal registration channels to obtain an Employer Identification Number or EIN, which will allow you to hire employees. Luckily, there is no fee to register for an EIN.
The yearly cost of taxes will depend on the kind of business you opt to create; LLC taxes are usually based on the net income generated by the business, but the company may be eligible for tax benefits.

Licensing and permits

To legally open a gym or any business, you’ll need a business license, which for a small business like a gym, will cost between $100 and $500, depending on the state and the size of the business in question. The license will need to be renewed annually, often with a (much smaller) fee. While all businesses require a state license, some will also require local licensing. Check with your local government for regulations regarding opening up a gym.

You’ll also need a Certificate of Occupancy (CO) which confirms that your gym building is up to code. These cost around $250, but can vary depending on your location. Beyond this, you’ll need to check and see if there are any additional permits required on a local level for a fitness or wellness business.

Business insurance

The final legal hurdle to opening a gym is obtaining business insurance. Though this takes many forms, the most common is that of general liability insurance, which protects against the reasonable risk of bodily injury and property damage.

You might also choose to invest in cyber insurance for your business’s online presence, which protects against data-related privacy and loss issues. This can cost around $1,500 per year. 

For a gym that is relatively small, the annual cost of general liability insurance is around $350 per year.

Gym building costs

Gyms are, by their nature, required to have a physical presence, so the costs of obtaining and maintaining your business’s location are going to factor into your startup costs. The total for this (including only initial startup costs and not recurring costs) ranges between $8,050-$37,000. This includes initial building costs and utilities, as well as decoration.

Buying versus renting

You have two options when it comes to obtaining a physical location: buying or renting. 

Gym building costs – that is, building your own gym from the ground up – are a much larger investment upfront, but also allows you the freedom to customize the space to your business’s needs without going through a third party for approval. 

It also means you cannot be removed from the premises unexpectedly; if someone else wants that building, they’ll have to buy it from you. So, how much does it cost to build a gym? How much does it cost to buy a gym?

Buying a gym building

If you want to build the building yourself, it’ll cost you about $100-$200 per square foot, so for an average 3,000 square foot gym (large enough for plenty of equipment and member areas) is between $300.000 and $600,000, not including the land. 

To buy a building of comparable size that already exists, you’d be spending about $100,000 to $300,000. If you break that down into monthly mortgage payments over a regular term (about 36 months), you’re looking at around $2,700 to $16,600, not including fees, interest, or down payments.

Renting a gym building

Renting, on the other hand, is a significantly smaller upfront cost, but can be a costly option in the long run, especially if your business is slow to grow or does not meet your expected revenue right away. 

You’ll also have significantly less control over the amount of customization you can apply to the space, and will have to continually review and negotiate your lease with a landlord. Still, it can be a good option if you are considering moving your gym to a new location in the future or you simply do not have the starting capital to buy a building outright. 

The average cost to rent a gym building is about $30-$50 per square foot per year, so for a 3,000 square-foot gym (roughly average gym size for a moderate commercial space), you’d be looking at about $90,000-$150,000 per year, or monthly rent payments of about $7,500-$12,500, not including fees or rent increases over time.

So, if we consider that you’ll be making a down payment either way, we can safely say that your starting building investment would be roughly two times the following monthly cost. That puts the starting building cost somewhere in the range of $5,400 to $33,200.

Utility costs

Utilities for your gym will include electricity and water for your machines and restrooms, as well as heating and cooling costs appropriate to the weather. While this does change depending on your location, you can generally expect to be paying $3-$4 per square foot of space per year. For our 3,000 square foot example, that’s $9,000-$12,000 per year, so $750-$1,000 per month.

Gym decorating

Your gym will, of course, need more than just workout equipment and a front desk. In your budget, you’ll want to assign a portion to interior decoration.

This might include things like couches and chairs in the reception area, art and wall decor, mirrors, tables, and other decorative items. 

Consider setting aside enough for two couches, 10-20 chairs, 5-10 tables, and some decor – about $1,900-$2,800.

Gym remodeling

If you need to remodel your gym later on, you might expect to pay another $40 per hour of construction costs – this would include a total for tear-down, cleaning, and rebuilding. 

Consider that it may take up to 150 hours to complete a total remodel, meaning you’d need to account for $6,000 in labor costs alone.

That being said, this is not an upfront cost. It’s still a cost to consider for the future, should you want to change or expand your gym.

Gym equipment costs

Gym equipment costs can be vastly different from gym to gym depending on what you want your gym to provide.

Buying versus renting

You may choose to consult with gym rental companies and see if this is an option for you. If you do, keep in mind that customers are not interested in working out on old, slow, or damaged equipment (which can cause legal issues for you down the line). 

On the other hand, renting equipment can be a good way to save on upfront costs, especially if you are unsure how long your gym will be in operation. That being said, buying your own equipment can save you on monthly costs and can ensure that you never lose equipment due to nonpayment or the fault of a third party. 

You may also try rent-to-own gym equipment, as a good compromise between the two options – this will allow you the smaller startup costs while also offering the chance to own your own equipment later on.

Breaking down gym equipment costs

So, how much does gym equipment cost? Here are some per-piece estimates for you based on current market pricing:

  • Strength rack: $200-$5,000
  • Treadmill: $3,500-$10,000
  • Elliptical machine: $1,000-$3,000
  • Stairmaster: $2,000-$4,000
  • Free weights: $500-$2,000
  • Bench press $200-$500

In total, if you choose to get two of each machine or set – just enough for our example commercial gym – you’re looking at an investment of $14,800-$49,000.

Payroll

Of course, if you are operating a gym, then you’ll need to pay for the employees that will help you run it. Investing in awesome staff is worth it; having the right people on board to work with members, direct interesting classes, and keep the gym moving on a day-to-day administrative level can be the difference between success and closure. 

If you’re starting a small fitness studio, you can expect to hire 2-4 desk managers (depending on your hours of operation), 1-3 personal trainers, 1-2 professional cleaners, and potentially some freelancing fitness professionals like yoga teachers, dieticians, or Crossfit instructors that will bring something unique to your gym.

Personal trainers

Personal trainers typically provide their services on a fee-for-service basis, meaning that you will only pay them for the time they take to perform their services for you or for the number of classes they do, rather than providing a set hourly wage or salary. 

Your personal trainers’ pay range will be much more expensive because of their sheer experience. It will depend on their previous roles and their own expertise. It’s up to you to be communicative and ask up front what their pay expectations are. This way, there’s no awkwardness.

Breaking down payroll costs

Ensure that you are paying your employees appropriately for your area’s cost of living and that you have not hired more employees than you can reasonably fit into the budget. 

This will not only keep your gym startup costs down, but it will also promote a good work environment that encourages your employees to be productive and can reduce turnover rates, which again, will save you money in the long term.

To break down the cost of opening a gym with employees on hand, here are some pay range estimates for the individual roles you may need to be filled:

  • Desk managers: $16-$18 per hour working 40 hours per week
  • Personal trainers: $19-$25 per hour working 40 hours per week
  • Professional cleaners: $11-$15 per hour working 20 hours per week
  • Freelancing instructors: $20-$150 per hour working roughly 10 hours per week

We’ll consider the first two weeks of pay as your startup cost for opening a gym with employees. Assuming that your gym is open for regular business hours (from about 7 am to about 10 pm), you would be paying, in total, $4,920-$21,960 before any fees, benefits, or taxes.

Advertising and marketing

Your initial advertising and marketing costs are going to be quite high. You’re starting up a gym but as a brand new business, the only way that people are going to know that you’re there is if you advertise! To do this, you’ll need a few things:

  • A building-front sign: $200-$1,000 or more
  • A functional and professional website: $200-$6,000 depending on whether or not you hire a professional designer
  • A way to manage new members as they come in (a Customer Management System, or CMS): $50-$300
  • Press releases: $50-$500 depending on the copywriter and the number of releases written
  • Active social media ads: $90-$900 for a 30-day campaign aimed at drawing impressions alone, running on three platforms (this highly depends on the platforms you choose; YouTube is expensive while Facebook is inexpensive)
  • Active ads in traditional media such as radio and television: $990-$2,910 for a 30-day campaign with the shortest possible ad spots on three platforms (once again, dependent on the platforms you pick; radio is relatively cheap while network television is expensive)

This is covering only the most basic of marketing efforts. Your advertising strategies should evolve over time to both retain existing customers and attract new business. You may choose to run this yourself or hire an expert marketer to assist you. 

Bringing in an expert is an added cost ($15-$30 per hour for a freelance professional), but it can be worth it for their experience and insight into the most profitable marketing investments and strategies.

Overall, your marketing budget upfront would be between $1,580-$11,610 minimum, not including the hiring of a marketing manager.

Gym upkeep and surprise expenses

Making sure your professional gym is clean, functional, and pleasant to use will make sure customers want to visit your space again and again. You will also need to factor in buying supplies for cleaning, as well as buying mundane necessities such as bathroom stock and office supplies. 

This will run you about $250-$500, depending on the amount of supplies you will need.

In your gym business plan, you should have a unique section in your budget for the unexpected and mundane costs to start a gym. A separate fund for your unexpected/upkeep costs will ensure your equipment is covered if something breaks or stalls. This is all about planning for the unexpected, so our guesses are as good as yours.

Summary: the average cost of opening a gym

Looking at all of the expected costs of opening a gym together, as a total budget, you can expect to pay, on average, $30,350-$123,470 to open a gym or open a fitness studio. 

This is a wide range and depends heavily on the space, people, and coverage you choose to work with at start-up. 

Remember, though, that these are ballpark numbers that take into account national averages and ignore costs that are impossible to estimate, such as unexpected repairs.

Consider working with a financial advisor

It’s a good idea to work with a financial advisor to get a more accurate estimate for your unique business situation that takes into account location, business size, and funding sources. 
Starting your own gym business plan well in advance of putting down any capital is a good idea, as it lets you estimate your budget, timeline, and the resources that you need, but it’s also good to be flexible with this plan.

Quick reference chart: how much does it cost to open a gym?

We covered a lot of ground and threw out a lot of numbers over the course of this article, so to make it easier for you to use these estimates, we’ve compiled them into a condensed chart. It covers the larger categories discussed and their total ranges.

Here is a chart of expenses you can use to estimate how much it would cost to open a gym based on the factors discussed above.

ExpenseCost
Legal Fees$750-$3,400
Building Costs$8,050-$37,000
Equipment$14,800-$49,000
Payroll$4,920-$21,960
Advertising and Marketing$1,580-$11,610
Upkeep$250-$500
Total$30,350-$123,470

Frequently Asked Questions (FAQs) About Opening a Gym

We’ve covered the basics of the startup costs for opening a gym, but there are still a few more questions to consider. Here are some more frequently asked questions about starting a gym business.

Why is workout equipment so expensive?


Workout equipment costs have gone up dramatically in recent years alongside the increase in inflation around the United States and the wider global economy.
As with almost any product at the moment, the major reason for this increase in cost is that there are major supply chain issues involved in the production and distribution of workout equipment, including delays with shipping via air, sea, or land.
There are also multiple shortages of the materials used to construct the equipment in the first place, meaning that the components are more expensive, so that expense is passed on to the buyer.

What type of gym is the most successful?


With current trends in the fitness industry toward community-based fitness, the most successful types of gyms are Crossfit gyms and other specialized personal improvement-focused facilities. 
These specialized gyms and fitness studios include ballet and barre gyms, boutique fitness studios, women’s gyms, and group fitness studios. They tend to be successful due to the niche but dedicated markets yet can have limited success depending on their location of operation.
If you are considering opening a specialized gym, research your market well in advance to be sure that you are opening in an area with a high density of your target demographic.

What are the cons of opening a gym?


The two biggest cons of opening a gym are the high upfront and continuous costs of maintenance and the incredible amount of competition in the industry. Gyms need to be efficient and attractive to succeed.
As mentioned, the cost to open a gym can be well into the five- to six-digit range, which can make the industry inaccessible to those unable to raise capital quickly or efficiently. 
It can also be difficult to open a gym in a setting where there are many fitness businesses competing for business, such as in larger cities.

How much do gym owners make?


The average annual salary for a gym owner in the United States is just under $70,000 but can range up to over $100,000 depending on the success of the business.
As with any business, the salary of gym owners varies depending on the general popularity and success of the business, the number of employees and locations owned, and the geographic location of the business, among other factors.

How can I raise the capital to open a gym?


You can raise the capital to open a gym by seeking out business partners, asking other local businesses to sponsor your efforts, looking into crowdfunding options, or by taking out business loans.
You may also check with your local government to see if there are any grants or other kinds of funding available for small business start-ups, even if they are not specific to gyms or fitness businesses.

The cost to open a gym and how to do it right

Beyond the monetary return on investment, owning a gym can be rewarding on a personal level. Owning a gym connects fitness lovers, and is proven in profitability (when done right). 

It’s a great way to afford a dedicated place for people to come together to celebrate health, wellness, physical strength, flexibility, and a sense of community built on literally building each other up.

Interested in learning more about the start-up costs for a gym or would like to get your gym business plan in place? We can encourage you. Check out our budget planner which can give you more insight into the startup gym costs for new owners.

How can Hapana help your boutique fitness studio? Request a demo to learn more.