Gym Owner Musings - 5 Random Lessons Learned

I’ve accumulated a boatload of random lessons learned in (nearly) a decade of operating a fitness facility. Some warrant entire presentations, podcasts, and blog posts. Others carry plenty of value but can fit within the confines of a 140-character Tweet. 

Here are five quick insights that fall somewhere in between Twitter-friendly and ”blog-worthy”.


1. The “start small” mentality works

There is only one scenario I can see where “start small” is a bad idea, and that is when signing a long-term lease with zero wiggle-room for expansion or lease term modification. In 2008 we moved in to a 6,600 sq-ft space with the intention of growing out of it long before the conclusion of our 5-year term. As far as I’m concerned, the goal upon signing any lease should be to find your business busting at the seams and in need of additional space before your agreement concludes.

Assuming you’re renting space, consider communicating your vision clearly to a potential landlord like we did:

“6,600 sq-ft should do the trick for now, but if we build our business the way we aspire to, we want to know that you’re open to finding us some additional space here in the building and tearing up our current agreement so that we can negotiate a new term.”

Not many landlords will say no to you asking them to consider renting you MORE space before your current lease expires.

2. Everything is negotiable at a fitness equipment retailer

In July of 2007 we walked in to a Gym Source (franchised fitness equipment seller) looking for a functional trainer with two cable columns and a whole bunch of weight plates. We learned two important lessons that afternoon:

The first was that you could save a ton of money (30-40% in our experience) by purchasing a floor model piece of equipment at a store like this as opposed to demanding something brand new. I’m fairly certain the people aren’t banging out max-effort reps of exercises on a cable column in a retail store, so wear and tear is at a minimum when you buy “slightly used.”

The second lesson we learned was that margins on weight plates aren’t too bad for chains like Gym Source because of volume discounts they get when buying on a huge scale. This particular location only had a couple hundred pounds of plates on hand when we arrived, and we were told that we could buy them at a rate of $1/pound. “So what would our per-pound rate be if we told you that our gym needed 2,000 pounds of plates and we’re also on the market for the next seated-row/lat-pulldown floor model you come across?”

All of the sudden we found ourselves paying $0.65/pound.

3. Business insurance for a gym is expensive for 25 year olds…

I vaguely remember it going a little like this:

Coverage Provider: “So you need insurance for your fitness facility…I’ll just need to know how long you’ve been in business, what experience you guys have running a gym, and what your annual revenues look like.”

Me: “About three days…zero experience…and absolutely no idea what we’ll collect in year one.”

Coverage Provider: “You may not love the quote I come back at you with.”

The cost of insuring our business in year-one ended up being comparable to what I will spend this coming August when our policy renews for the 8th time. That may not seem that surprising, until you realize that we now collect roughly four times the revenue, with four times as many employees, and more than four times as much gym space as what we were working with in ‘07.

4. Take good care of youth athletes and your business will be recession-proof

We decided it would be a good idea to start at business at the start of “The Great Recession.” In hindsight, we’ve come to realize that our model was safer from an economic downturn than a gym that is exclusively geared toward servicing the general fitness population.

More specifically, we’ve learned that when it comes time to tighten up the family budget, parents are more likely to cut out their own discretionary spending than they will be to take away the premium supervised strength and conditioning services that their kids currently enjoy. As a new parent myself, I’m beginning to understand the inclination to go above and beyond for your kid.

5. Surviving the first 12-18 months of business is not easy…

I received my annual social security update in the mail today and decided to have a close look at my taxed social security earnings dating back to 1998.  One particular year jumped out at me – 2007. 

My taxable earnings for this first year that we were in business totaled $2,846.  As a frame of reference, I took home roughly double that amount in 2000 at a time when my only income came from serving beverages at a Seattle’s Best Coffee for 10-12 hours each week while maintaining a full college course load. 

Think about this for a second…in 2007 I worked roughly 12 hours per day, 6-7 days per week so that I could ultimately bring home enough money to pay for the gas used getting me to and from the gym every day.

I’m not in search of any type of sympathy.  Instead, I’m trying to reinforce the fact that EVERY successful gym I know of had to bootstrap it a little bit (or a lot) during the early stages of operations.  We were all first-time business owners once.