Top 10 Reasons Why New Gyms Fail

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  • Top 10 Reasons Why New Gyms Fail

If you have opened a new gym, you must know that it is, after all, a new business. So you should be prepared to run and develop that business as a business. To do so, you must acquire knowledge about the fitness business industry, and also be aware of the pitfalls of why new gyms fail so you can be sure to avoid them. In my opinion, here are the top 10 reasons why new gyms fail…

#1 – No proper business plan

No business plan can be fatal to your new gym. Before starting a gym know:

Success or Failure
Successful gyms watch finances, growth and marketing carefully.
  • Short-term and long-term goals
  • Finances
  • Required gym equipment
  • Employees necessary
  • Gym promotions

#2 – Shortage of capital

Capital is the life-blood of a business. If you open your gym without adequate capital to buy the required equipment or employ the right people, you will not be able to earn enough to develop or expand your gym. You also will not have the cushioning necessary to absorb potential losses.

#3 – Neglecting finances

You do not have be an accountant to run a business. BUT, you must be responsible and familiarize yourself with the gym business terminology and the basics of Finance 101. Unless you keep track of your finances, you are bound to overspend. As a result, even if you opened your gym with adequate capital, you might squander it, and then find it impossible to survive. Stay alert and aware daily of your budget:

  • Write down your business’s financial goals and be accountable to them
  • Track everything: new membership sales, retention, attrition, recurring revenue, personal training sales, membership length – just to name a few 
  • Install well-designed gym management software.

Measuring these statistics ahead of time will help you improve your strategies and grow your fitness business’s profit! At the end of the month, you will not be scratching your head wondering where all of your hard earned money went.

#4 – Improper location

Choose a location that is VISIBLE and CONVENIENT for your target members, not just cheap space.

#5 – Frantic growth

  • Slow, steady growth is good!
  • Don’t grow faster than your revenues.
  • Set practical goals and try to achieve them.
  • Don’t spend all your profits trying to expand; It will add overhead, which future earnings might not cover.

#6 – Taking competition too lightly

If you opened a gym at a perfect spot, and it is a great success, don’t let it get to your head. Just because you don’t have competition now doesn’t mean you never will. A brand new gym could sneak into the neighborhood without you even realizing it. You must:

  • Stay on top of customer service and listen to member requests.
  • Find a niche that a new gym cannot compete with
  • Market like crazy!!

#7 – Bad supervision

  • A great manager versus an OK manager will make or break your business.
  • He/she will have less reason to be dishonest if you hire and pay big for a great manager.
  • If respect is there, all your employees will follow his/her leadership

Additionally, a manager directly and indirectly reflects on your membership base. The manager will be in charge of motivating your staff who, in turn, will motivate and retain your membership base.

#8 – Inadequate promotions & marketing

Every business needs promotions and marketing strategies. Simply having a great gym, with great instructors and state-of-the-art equipment won’t get you an initial inflow of memberships needed to survive. You have to let your target market know that you don’t just exist, but how great you are in terms of services and deals. Once you have promoted enough to get an initial flow of memberships, you will find that, if you stay consistent with customer service, your current membership base will promote your gym by word of mouth.

#9 – No change over time

Change is required everywhere. The equipment that is state-of-the-art now may not remain so after a while. The setup that looks and feels great now may change to old and boring later. Lack of change will lead to member dissatisfaction and loss. Always be prepared. Continually:

#10 – No web presence

Having no web presence makes you invisible to a large mass of today’s population. Internet has become a commodity like water or electricity these days. Everyone uses it, and if you have a website and social media presence, it will not only create a good impression of your gym, but also provide you with a plethora of feasible marketing opportunities and ultimately becoming better known within the fitness industry community!

Now over to you…

What should #11 be?

Gym Insight membership software

At Gym Insight, our gym management software provides a clear, easily accessed, and transparent picture into your company’s financials. Sales Guru feature allows new members to sign up quickly on a tablet and our sales solution automatically integrates client payment data with the member management system. Our gym software is built in-house, by fitness club owners. There are no cumbersome third-party plug-ins or complicated protocols, and it’s available for a single, low monthly subscription price — no hidden fees, no links to your payment processor. Call us today for a free demonstration on how we can lower your software management costs!

This blog originally ran Sept. 18, 2013 and has been updated Jan. 20, 2021