Life has become so busy these days that people don’t have time for personal grooming, fitness and health. Gone are the days when people used to remain fit and smart without any exercise because their day to day life was sort of an exercise and their diet was not contaminated with other ingredients which they intake today in the form of packaged products. These days it is a common trend for girls as well as boys to go to gym for any kind of work out, body building, fitness and weight loss. Here is a basic business feasibility to setup a gym in Pakistan as it has become a profitable business.
Starting – Locality
First step in establishing a gym is thinking about the whole concept that what is your initial investment and what kind of gym or fitness center you want to open and what kind of clients you want to cater to. The location of the gym is selected according to the customers. Nowadays, the prices of commercial areas have increased to such an extent that it is not advisable to purchase the area in commercial or even residential sector and start a gym, because if that area is rented out, we could get hold of quick profits and that too in a short span of time. But again, it depends on the type of gym; if you want to open a very modern kind of gym targeting the elite class then one can go about buying the area. Otherwise, it is preferable to get the area on rent. In selecting the size of the gym, one should think of the number of members he wants to have in his gym which is linked with the machinery available in the gym. More members means, he has to invest more on machines and weights. Normally if a person has a target of 100 members in mind, he would require 1500 to 2500 square feet of area. For 200 customers, around 3000 square feet of area is required. And if a person wants 300 plus members, he should have 4000 square feet of area minimum. Depending upon the number of customers, one can plan for the area of the gym. And to balance the income from small number of members, one can increase the monthly fee of the gym. It also depends on the class of the society you are going to cater. Elite class can afford expensive gyms easily but this is not the case with the middle class.
Area/Size of the Gym
After selecting the locality and renting out the area for instance in Islamabad and the rent would not be less than Rs. 60,000 a month for a 4000 to 5000 square feet of area; the next step is the interior of the gym. Owner can improve the interior as much as he wants by spending more money. Hardcore gyms which are used for body building do not require a lavish interior. But if the gym is located in a posh area and also if it is for girls, then the owner needs to improve the interior of the gym which includes the flooring, lights, air conditioning etc.
Machines and Equipment
The next step is purchasing the equipment for the gym which includes machines, weights and electronic machines. Hardcore gyms used for body building do not require electronic machines. But if the members include women and old persons, then electronic machines would be required. It depends on the size of the gym that how much machines should be purchased which could cover the entire exercise regime. Normally there are 20 to 25 machines that cover all the exercises excluding the electronic machines. Type of machines, rods and dumbbells also matter in its cost, if a good quality of iron or steel is used in the machines and weights then apparently the cost will be higher.
The cost of the machines depends on its manufacturer. There are local manufacturers who provide machines and weights at a reasonable per kg rate. One can purchase the imported machines but they are very expensive and there is not much difference between the local machines and imported machines if we consider their maintenance and lifespan. Hence, one can purchase high quality machinery from local manufacturers in Lahore, Sialkot and Rawalpindi. Usually a small area gym costs 5 to 8 lacs with respect to machines cost. A normal gym of around 4000 square feet of area having around 300 members would cost 12 to 15 lacs with respect to machines and weights. These costs do not include the electronic machine costs. Electronic machines like tread mills etc. could also be purchased from local market but they are very expensive. It depends on the usage of the machine; if it is for commercial use and a large number of members are going to use it, then it is advisable to purchase the machines from China. One can easily order the machine from Chinese companies on internet. Cost of electronic machines depends on their quantity. A small quantity could cost around 3 to 8 lacs if we purchase the machines from China. A reasonably large number of machines could cost up to 15 lacs and so on. But if we purchase the electronic machines from local markets or from western countries, then it is going to cost us 3 to 4 times more as compared to China and their life would be same as of Chinese machines. This all depends on the choice and investment power of the owner of gym.
Daily expenses include electricity bills and pays of employees. If you are hiring trainers, then it will cost you 5000 to 15000 per trainer a month (depends on the trainer). The more the number of trainers, the more will be the cost. But one should not consider it an extra expense. Good trainers can attract more number of customers. From marketing point of view, internal environment of the gym is also significant. It you have friendly trainers and employees and your members are comfortable with them, then they will spread the word and the number of members are going to increase. Internal environment also involves the interior, cleanliness and the whole atmosphere of the gym. Atmosphere can be improved with air sprays, good music or installing a LCD Screen inside the gym. Moreover, good machines also attract more customers.
Break-even / Profit
Usually all gyms whether a relatively smaller or a larger one achieve their breakeven between 1 to 2 years which largely depends on their performance. After break-even, one can also increase the profit margin by improving the machines, environment and increased investment. The profit ranges are:
Very small gym with an initial investment of 5 lacs comprising 100 members is roughly going to yield profits between Rs, 50,000 to Rs. 60,000. After excluding cost, the net income will be around 30,000 a month.
A good gym with an initial investment of around 12 to 15 lacs comprising 150 to 300 members can yield profits between Rs. 100,000 to Rs. 150,000. After excluding cost, the net income can be around Rs. 80,000 to Rs. 120,000.
A very good gym with lots of other facilities having an initial investment of 20 lacs to 50 lacs will have a profit range from half a million to 1 million a month. The number of customers depends on the fee structure of the locality.
The fee structure is set keeping in mind the target audience and their capacity to pay. A normal gym fee ranges from Rs. 500 to Rs. 3000 a month, depending upon the choice of the gym owner. Lesser fee could attract more customers and a higher fee can reduce the customers but the over all effect on the income would be negligible. It’s totally down on the owner that what kind of people he is catering to. Moreover luxurious or lavishly designed gyms charge Rs. 5000 to Rs. 60,000 a month. But these are exceptional gyms. They have extra facilities like swimming pools, massage centers, training centers, fitness zones, yoga zones, food areas etc. These kinds of gyms require an initial investment of minimum 4 to 5 million and have the ability to yield profits of 7 to 15 lacs a month.
One can start extra facilities with the gym to increase the serviceability and profit margins. For example, adding a food and drinks area providing power shakes or a cosmetics area with a ladies gym, shower rooms, spa etc. These extra features can increase the number of members and also yield profits from the so called side business.
Maintenance of the gym depends on its usage. If the member’s size is large then maintenance will be required after 2 to 3 years which includes replacement of defected machines, carpet (if there is any), benches, dumbbells etc. But if the gym is not for hardcore use and just for fitness and is located in a posh area, then maintenance period could go up to 5 years. Moreover, the machines and weights are getting more expensive day by day which means the next maintenance would cost you more. On the other hand the electronic equipment is getting cheaper and its maintenance after a year or 2 (as electronic machines have a life to not more than 2 years) will cost you less than before.