How to Start a Boutique Gym

Part 1 - How to start a Boutique Gym business - Background

Boutique gyms, also known as specialty gyms, recruit members for instructor-led classes or sessions on specific types of workouts. For instance, your business might specialize in barre workouts, monitoring heart rate, CrossFit training, pilates, powerlifting, or one of many other special types of fitness programs.

While the traditional gym might offer many programs in a sprawling facility, and members tend to work alone at a time of their choosing, boutique gyms are more structured, and they offer members the chance to work out in an intimate setting. Participants in scheduled classes will be coached and motivated by a skilled trainer. As a boutique gym owner, you’ll therefore likely spend much less money on rent, equipment, and machine inventory, while also being able to charge more than a conventional gym. Additionally, you can develop more personal relationships with your gym members.

Our guide is in 3 parts:

• Part 1 - How to start a Boutique Gym business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a boutique gym?

Your costs will be determined by your location, type of workout program offered, and equipment and machinery needs. Depending on these and other factors, you could spend anywhere from virtually nothing, all the way up to one million dollars in startup costs. A realistic middle range might be $25,000-30,000.

For instance, a barebones operation might involve you running a small boot camp class a few times a week in an outdoor public access area, such as a beach or park. If your workout primarily consists of calisthenics, running, and other cardio drills, your only equipment needs might be jump ropes, stretch bands, and lightweight dumbbells. (Don’t even attempt this approach unless you live in an area where the climate is conducive to frequent outdoor training.)

On the other end of the scale, you could offer only state-of-the-art stationary bikes, treadmills, and lifting equipment, with surround-sound music and an upscale juice bar for after-workout mingling, in a newer building in a high-rent commercial district.

Here are a few of your leading expenses, regardless of your exact gym type.

• Space rental – This will depend on the city, but can run $4,000-5,000 a month for 3,000 square feet. Don’t skimp here, as your members won’t want to pay top dollar to attend classes in a too-small space, or a questionable part of town.

• Equipment – Again, this is highly variable, but can run from a few thousand dollars for several sets of dumbbells, to hundreds of thousands of dollars for the newest and most technologically advanced exercise machinery.

• Liability and other insurance – You’ll want to make sure everyone signs waivers (here’s an example), but you’ll still need liability insurance. You can find out more about gym insurance coverage needs and costs here.

• Employees – For starters, you might be the sole employee, so either have savings so you don’t need to initially pull any salary from your operation, or figure your minimum needs. If you have a head trainer, this person can be an independent contractor on commission (like 25% of membership fees) to motivate his or her sales efforts. Sessions can be led by trainers, who are also independent contractors and get paid about $20 per one-hour session.

What are the ongoing expenses for a boutique gym?

Your largest ongoing expenses will tend to be space-related: rent and utilities. It’s important to keep workout spaces at a comfortable temperature, no matter how hot or cold it is outside. In many places, $500 per month for utilities might be typical.

Your employee costs will depend on your weekly number of classes, and their scheduling. At first, you might want to try to schedule classes in such a way that you can handle the training yourself for most or all of them. This will significantly cut down on your operating expenses.

Also, figure in costs for inventory if your gym offers smoothies, healthy snacks, coffee, or merchandise.

Who is the target market?

In general, your members want to improve their health, appearances and/or lifestyles, and are passionate about fitness. This is apparent in their willingness to take direction, show up for scheduled classes and pay more than what standard gym membership might cost in your area.

Since boutique gyms can be much costlier than conventional health club memberships, you’re likely to attract an upscale clientele, along with members who simply feel that the cost is justified. Your customers likely prefer forming a community with like-minded members rather than working out alone, and will help you recruit new members with positive word of mouth.

How does a boutique gym make money?

Your main source of income will be memberships. You’ll sign up new members to six-month or one-year contracts, for rates that will likely be higher than gym memberships in your area—perhaps $100 a month or more. A smaller number of specialty gym owners charge on a per-workout basis. However, this fee schedule doesn’t encourage participation as much as a monthly payment, which is owed regardless of attendance.

Some boutique gyms also sell nutritional juices or smoothies, or offer coffee and healthy snacks after workouts for additional revenue streams. Some also have small gift shops where logo t-shirts, towels, or other apparel can be found. Other services can include childcare during workouts and nutritional guidance.

How much can you charge customers?

If you can figure out what conventional health clubs cost in your area, use this as a starting point. You can charge a higher rate, based on the fact that your programs are more personal and expertly led. While people in your area might not spend much more than $30 monthly for traditional health club memberships, they might spend three times that amount for the services, environment, and peer group you offer.

How much profit can a boutique gym make?

Boutique gyms like Soul Cycle and CrossFit have opened multiple locations nationally and have even gone public, proving that there’s no ceiling to your success.

Here are average revenue figures for clubs large and small in 2014.

How can you make your business more profitable?

Consider the whole range of your customers’ needs. If their goal involves weight loss, for example, you might offer the expertise of a nutritionist to prepare meal menus. You might also consider exploiting a small but underserved niche in your community. For instance, one boutique gym only serves pregnant women, offering a range of exercises and nutrition advice that’s safe and effective for that distinct group. The better you know your target audience, the more ways you can find to provide the solutions they need. It will keep your group loyal while providing a steady revenue stream.

Day-to-Day and Growth

What happens during a typical day at a boutique gym?

You might have six to ten scheduled classes each weekday, and a few more on Saturday. That means you and your team will likely have workdays that start early and end late. Here’s how your daily activities might break down.

• Leading classes that could start as early as 5:30 a.m., depending on the availability of your members

• Hiring, training, and supervising your head trainer (if that’s not you) and part-time trainers

• Managing the juice bar, coffee shop, daycare facilities, or other related member services (if any)

• Soliciting new members, especially during class downtimes

• Cleaning equipment, restrooms, food and beverage areas—a critical concern of members

• Managing social media to communicate with existing members, and to attract new signups

What are some skills and experiences that will help you build a successful boutique gym?

You should have ample experience with training in your chosen area, and the ability to draw out the best performance from your trainees. The job also requires strong sales skills, since you’ll regularly need to recruit new members. You should also have certification as a personal trainer, and CPR certification. You can find out more about trainer and nutritionist certifications from the American Fitness Professionals & Associates.

What is the growth potential for a boutique gym?

Growth is possible through the operation of additional classes, through greater participation in existing classes, and by establishing new facilities in locations with high growth potential. Be cautious about taking on too many members per class. If you lose the sense of individual instruction and shared community, you could lose members.

Check out this Market Watch story about boutique gyms that became so successful, they’ve gone public and added multiple locations.

What are some insider tips for jump starting a boutique gym?

It’s all about attracting new members and retaining them. With that in mind, schedule classes at times that appeal to individual groups. For instance, one boutique gym in Raleigh, North Carolina, would attract an early shift of healthcare workers to 6am classes. Then, mid-mornings would be geared to mothers with young children (while schools were in session), a mid-afternoon class for teachers who were finished for the day, and early evening classes for office workers. In this way, they could fill classes throughout their workday, and use downtime for marketing the gym.

How and when to build a team

You’ll build your team as your membership grows. Try not to offer many sparsely attended classes, or you’ll be forced to pay a trainer even if a class only has two or three participants. On the other hand, don’t let your classes get too crowded just to avoid hiring new talent.

It’s easy to figure your earning potential and need for additional help, based on class size and monthly membership fees.

Read our boutique gym hiring guide to learn about the different roles a boutique gym typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Part 2 - Is a Boutique Gym business the right fit for you?

Part 3 - Action plan to launch your Boutique Gym business in 90 days