Step 1 - Differentiation
At the end of 2019, there was an estimated 5,133 gyms, health clubs and performance centres open across Australia. That figure grew from an approximate 4,700 in 2018. For those who can math, that’s more than one new gym opening every single day! And that’s not accounting for all that closed in that time too.
But you’re young, ambitious, fresh out of study and want to run the show yourself. How do you compete against the big players in the market? Any good business solves a problem for their consumer, but you’re unlikely to be successful on the promise you do it better than your competition. You’re new to the industry, you don’t have the marketing budget and you’re yet to establish a trusted brand in a saturated market. So what’s the solution? You need to be different. You need to find your “niche” and discover a method to make that different enough to your competition to convince potential customers to give your product/service a crack.
You don’t have to look far back for examples that have been successful in Australia. Just look at the past decade. Anytime Fitness made 24/7 main stream. F45 brought along group training and it exploded. Derrimut created a one stop shop for gym, food, apparel and more. These might not be the pioneers of the ideas, but they made them work by doing something different to the competition.
This begs the question - what will you do to differentiate?
Step 2 - Target Market
The saying goes - “if you sell to everyone, you sell to no one.” As much as we would all like to believe we have the next iPhone to enter the market, the reality is far different. This is especially apparent in the health and fitness industry. People come from all different walks of life, have very unique goals and like it or not can have set expectations on how they want to achieve those goals, even if they are not the most optimal. For this reason, it’s very hard to have a product and/or service that caters to everyone.
So, what’s the answer if you’re looking to open your own facility?
Clearly define your target demographic.
The list of options are endless but keep in mind what gyms are already out there. If you decide to opt for customers looking at convenience and cost effectiveness (eg. 24/7 gyms), you’re playing with the big dogs in the industry. It’s not impossible to make a successful business in this area but you’re competing against established and trusted brands, with huge marketing budgets and in excess of $500,000 worth of equipment at every location.
If you decide structured group training is your specialty, your business will require far less traffic to keep afloat. But again, there are big players in this area so what will you do differently to appeal to your target demographic to have them make the switch to you?
Having a niche service shouldn’t be seen as a limiting factor for business growth. Instead, view it as an opportunity to better appeal to your “ideal” clientele. Do it correctly and you’ll be helping people you truly want to work with and better yet build a community of like minded individuals that will likely be life long customers.
Step 3 - Customer Acquisition
You’ve established your differentiating factor and found your target audience (if you haven’t, go back and read steps 1 & 2). Now you have to acquire customers. Below are 4 key areas to focus on for generating business!
1. In House
Open days, birthdays, challenges, info nights and more. These are the events you host to help generate “buzz” for your facility. They’re fun and relatively cheap to create. But be wary of solely relying on this or promotions (eg. discounts) - you run the risk of only attracting customers there for the sale. Use events intermittently and focus your efforts on long term/lifetime customers.
2. Word of Mouth
The best place to find more customers is through your existing customer base. They are there for a reason and likely have likeminded friends/family that could benefit from using your services. Even more, they could be associated to a local organisation (eg. sporting club) that are seeking a gym in the area. Actively engage with your existing customers and they’ll be more likely to help you find more business. Attend events at local organisations and promote your services. The only thing this will cost you is time… so just do it!
3. Business to Business
Go on Google Maps and list out the businesses in your area. You’ll probably come across 100’s within a few kilometres. Physios, chiros, GP’s, medical centres, cafes, barbers, mechanics… trust me there’s a lot that could be interested in coming to your gym. Establishing good relationships with these businesses generates referral systems that will bring customers to your door. Cross promotion puts your name in front of potential customers that otherwise never would of heard of you. The #1 thing to keep in mind - ensure you have something to offer to the other business if you expect them to refer to you. Successful referral systems help generate business both ways.
This one will be brief, although it warrants a novel. Broadly speaking, you have 2 ways to attract customers online - free and paid.
A. FREE Setting up social media accounts cost little to nothing. Facebook, Insta, Email, TikTok and more. Making these and creating your own content is simple and can lead to business growth. Albeit, it’s A LOT harder to build a solid presence online without $$$ - it’s still possible.
B. PAID Website, Google Ads, SEO and the above social media accounts - paying to get your business on potential customers screens. The more $$$ you have, the more you can rely this strategy. However, if you have no idea where to start please hire a professional to do it for you. Otherwise, you could spend $100’s if not $1,000’s on failed marketing campaigns.
Step 4 - Systems
Often overlooked as luxuries, implementing systems can help your gym stand out to consumers and streamline day to day procedures. They make you look professional by automating or speeding up necessary tasks so you can fully focus on the service you provide - training people! Below are in our opinion the most beneficial.
The majority of exercise professionals don’t get into the industry because they like starring at numbers (nor can a lot of them count accurately). Having the appropriate accounting software can help keep track of your numbers, highlight dates for due payments and most importantly ensure your business is making money! XERO and MYOB are a couple options with pros and cons to each. Do your research and find what best suits your needs.
Calendar and Customer Management
Ideally, you’ll aim to grow your business big enough that simply keeping a note book of your schedule or using Google Calendar won’t quite suffice. Using software such as MindBody, Gym Master, Wodify or Cliniko can better manage your and your teams weekly schedule as well as keep a record of necessary client information on your database. Each software has their own unique features (eg. Payment processing) so choose what best fits your business.
We don’t hide the fact we love having access to programs online or on our phone. To put it simply, we hate writing programs on paper! It’s a waste of paper and takes too much time. If you can afford it TeamBuildr is our go to choice by a landslide but there are alternatives. Do your research!
Gym owners, did we miss a few? What are your most important systems for improving the efficiency of your business?
Part 5 – Know your numbers
The large majority of us get in to the fitness industry because it is a passion. We love lifting, we love seeing people achieve goals but fundamentally it is still a business. And to be successful, businesses need to be profitable. Generating income does not have to be the underlying goal. However, to help more people, to have a greater impact on their lives and to be sustainable long term your business has to make money. Establishing your own PT business is one thing. Opening a facility is a whole different level. There are far more expenses you have to be wary of as that will help dictate how much you need to charge for your services for the given hours you want to put in. Here are some you must consider.
This can make or break a fitness centre from day one. Gyms are big tech. companies – we don’t run on the greatest profit margins as it is so being diligent with this expense is crucial. Our advice, find the best space possible factoring in location and overall size of the premises within your budget. From there, NEGOTIATE! Even if the price is already affordable get it down to the best the landlord is willing to offer. This will likely be home for a few years so manage your rent wisely from the start.
Not all gyms will employ staff, many will opt for contractors. But if you do this will likely sit in your top 2 expenses (rent being the other). However, look at staff as assets not expenses. They are there to help deliver your service. Encourage them, nurture their development as a valued employee and create an environment where they want to bring their best every day. Even if their goal is working beyond your facility, assist their development to give them the best chance to pursue their goals whilst helping yours.
Equipment and maintenance
3 things to consider when purchasing equipment
A. What do I really need?
B. How long will this equipment last?
C. What’s my budget?
Purchasing the gold standard most expensive equipment is great, if you can afford it. But purchasing a stack of cheap equipment will leave you out of pocket in the long run as it will need to be replaced on a frequent basis. Finding the right balance of purchasing only the essentials you need from a quality equipment supplier and making additions when you can afford it is key.
We haven’t even touched on insurance, various registrations, safety equipment, tax, systems (read the previous post), cleaning supplies, food/beverage and many other expenses. Understanding and appreciating these numbers determines the amount of income your business needs to generate, ultimately giving you the best chance of financial success.
Part 6 - Staff & Culture
Ultimately, your business model determines how you integrate staff in your business (eg. Employ, contract, internship or a combination of all). All can lead to a successful business model. What really gives your business the best chance of a becoming profitable is “Who, What and Where” - who you choose, what role they’re given and the work environment they’re placed.
At AAC, we have a “hire on personality” policy. Knowledge is essential but can be developed. Personality though is far more difficult to change. If we find the individual with the right growth mindset that has competent skills as an exercise professional we know we can turn them into an asset for the business. You need to hire individuals with a like-minded mentality if you want the best chance of success.
Once you’ve found the right individual/s, you have to effectively establish and communicate their role. This can be especially difficult in a newly formed growing business - we’ve faced this challenge multiple times and it can leave staff confused, uncertain in the necessity of their role. The best way to overcome this is to have the conservation with staff. Be transparent about the goals of the business and what they need to do to help achieve it. You can do this through simple KPI targets. If you don’t know them, bring staff into the discussion to help you establish them. Transparency is not a weakness. I’ve seen the biggest growth when I admit I don’t know. Not only does this help you, it gives staff a sense of ownership and purpose to grow the business.
If you want to get the most from staff, provide an environment where their achievements are celebrated, their ideas are appreciated and where they know they can progress in their professional career. An environment where everyone is equal. Even if they don’t plan to stick around forever, create a work environment where they want to comeback and leave a positive impact each time. Give them enough freedom and as an owner get your hands dirty from time to time as no task in the business should be “beyond” you.
Part 7 - Perseverance & Pivoting
In the final instalment of this series, we’ll touch on arguably the most important 2 factors to any successful business.
If you’ve ever ventured into business yourself, you know there are hurdles you come across you never even thought were possible. Almost 4 years ago when I started, I knew there would be challenges but I was also naive to what exactly lied ahead. Case and point… COVID. Not in a million years did I think I would be battling a global pandemic. That tests your willpower. And scenarios like this are only one example. I’ll be honest, 90% of the time you’re left doing things you really don’t want to do - desk work, paying bills, putting out fires that may effect the workplace and many more. But it’s worth it. It’s worth the 10% of bright light at the end of the tunnel. And it should be. I love the fitness industry. I love seeing clients (most of which I now consider family) achieve their goals. And dealing with the hours of shit is worth the few minutes or seconds of joy when the job is finally done. Even if you don’t see instant success and growth, persevere and create something special.
Contrary to the above, you have to know when to take a step back. The definition of insanity is doing something exactly the same and expecting a different result each time. Although you have to persevere with a concept for a reasonable amount of time to see results, if it’s continually producing sub-par performances you must be willing to change. And once you do find what works you have to be willing to further press forward. One of the key values we have at AAC is innovate - never remain content with what we have now as inevitably our competitors will catch up and surpass us. If you need real life big examples of this, search Blockbuster, Kodak and Blackberry just to a name a few.
A quote from Napoleon Hill to finish - “Successful people make decisions quickly and change them very slowly. Unsuccessful people make decisions very slowly, and change them often and quickly.”