Starting a gym can be complicated. Instinctively, launching a health club seems simple: equipment + passion = success, right? True, but gyms also involve people, liability, capital investments, promotions, regulations, and expenses. Juggling all this is where success is achieved.
The following blog is a short overview of four of the most significant responsibilities affecting your new company. Below the blog, we’ve included helpful links for research and assistance.
Four tasks every gym owner faces:
- Insurance coverage
- Capital equipment purchases
- Marketing expenses
- Employee management

1. Required insurance coverage:
- General liability
- Commercial property
- Professional liability
- Workers’ Comp
Although the cost of insurance varies widely based on the size and type of gym, except to pay out about $10,000 a year. To secure the best coverage, contact insurance companies specializing in providing coverage for fitness centers.
Insurance providers specializing in fitness include:
- Sports Fitness Insurance Corporation
- K&K Insurance Group
- Markel Corporation
- Philadelphia Insurance Corporation
- The Hartford
2. Capital equipment purchases
Buying exercise equipment is probably the number one expense involved with starting a health club. As an entrepreneur, you’ve created a specific vision for your fitness center. Outfitting it with the right equipment is a priority.
Should you buy new equipment or used equipment?
There are advantages to both strategies. Buying used gym equipment reduces your upfront costs by what can be thousands of dollars. The cost of stocking an average-sized health club can run more than $500,000 in commercial equipment costs. Buying the same equipment used can reduce that expense to as little as $100,000.
Advantages of buying used equipment:
- Minimize depreciation. Just as when purchasing a new car, the first time a member trains on that equipment – it’s used, no matter its condition.
- Keep up with fitness fads. By dropping less cash per machine, you can replace an outdated or unused piece easily with a more popular, newer product.
- Exchange broken equipment quicker. Used equipment brokers frequently are willing to take in bruised equipment and give credit towards the purchase of existing merchandise.
- Pay off equipment faster. By buying less expensive equipment, you can pay off the note sooner and reach profitability earlier — a huge step towards long-term success.
Advantages of buying new gym equipment:
Support of a brand behind you — Most major equipment manufacturers are invested in the success of new business owners. From equipment space planning to financing options to warranty and service assistance, new gym owners can lean on their manufacturer for help and advice. There’s a value in that.
Create a specific look — Buying new gym equipment gives you control over colors, styles, design, and feel. If you’re determined to create a specific image for your new gym, buying new equipment allows more flexibility of choice.
Build relationships — For new gym owners intent on creating a lasting, evolving brand identity, siding with a known, major gym equipment manufacturer may result in co-marketing opportunities or better pricing in the future.
3. Marketing budgets for new gyms
There is no specific number to how much should be spent on marketing. However, marketing is closely aligned with the sales process. If you’ve ever sold a product, you know that it takes a certain amount of effort to sell one item. Once you’ve figured out that ratio, it’s easier to anticipate just how much product you can or will sell within a week, month, or year.
In marketing, aligning your financial goals with the number of sales you need to make will clarify how much capital should be allotted to the marketing budget.

4. Hiring employees
Depending on the type of gym you start, employees may be part of your business model. If so, prepare to pay taxes to various government agencies and keep paperwork on their behalf.
Before hiring employees for your new gym:
- Set up payroll – The U.S. Small Business Administration has a great guide. See link below.
- Decide between hiring employees or retaining independent contractors — This decision impacts how you withhold taxes and/or maintain compliance with the law. Managing the two correctly will keep you from paying back-taxes or penalties that may be imposed by the Fair Labor Standards Act.
- Provide required benefits — These include Social Security taxes, Workers’ Compensation, Disability Insurance (some states), leave benefits, and Unemployment Insurance.
- Consider incentive programs — These can include flex time, and wellness or savings programs, among others.
- Review federal and state labor laws — These will shine light on your employees’ rights and clarify the law as it pertains to such populations as veterans, child labor, or individuals with disabilities. Additionally, there are specific rules as applied to terminating or laying off employees.
Signing off
Good luck with your gym and don’t be intimidated by this overview. Your energy and enthusiasm will more than overcome any technical details. We believe in you! If you’re interested in sharing your adventure into starting a gym, feel free to contact us at 1-855-FOR-GYMS. Our sales director Anthony Pasquale hosts an informative podcast entitled “The Gym Owner’s Podcast.” He’d love to bring you on a show.
Gym Insight
We create excellent, easy-to-use gym management software. Our technology provides club owners with an affordable, comprehensive solution for managing customers and employees. And, we never use third-party software – preferring instead to write, design, and constantly improve our own product. That’s why Gym Insight is so simple to use — it’s software that’s all on the same team!
Excellent sources:
https://fitsmallbusiness.com/gym-insurance/
https://fitnessmarketing.com/2011/08/a-better-way-to-determine-your-fitness-marketing-budget/
https://www.sba.gov/business-guide/manage-your-business/hire-manage-employees
https://www.nolo.com/legal-encyclopedia/hiring-first-employee-13-things-29463.html