Gym Business Profit And Loss Statement – If you’re thinking of opening a gym or fitness club, it’s important to first understand how to turn your gym revenue into profit. In other words, how long does it take you to hit the gym and recover? What is the average profit margin for the gym?
A statistical study revealed that in 2020, 52% of his gyms and sports clubs that had been in operation for less than three years were profitable. In addition, 68% of gyms and sports clubs that have been in operation for eight years were profitable.
Gym Business Profit And Loss Statement
In terms of margins, the 2017 IHRSA Success Profile reports a median margin of 16.5% for all clubs in the Pro Shop/Retail category. The average profit margin for multipurpose clubs was 15.5% and the average profit margin for fitness clubs was 20%.
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Of course, the profit margins for gyms and health clubs vary depending on factors such as location, size of facility, type of gym, and many other factors.
Gym companies generate revenue from several sources. If you are looking for ways to increase your gym income or how to make your gym more profitable, we have some ideas for you.
Gym memberships are the biggest source of income for many fitness clubs. Membership fees are estimated to account for 60% of a fitness club’s total revenue.
Most gyms only offer one membership plan that allows members to freely use the facilities, but more and more gyms offer tiered pricing. In fact, the most expensive plans may include additional services such as free workouts and nutrition plans (see below for details).
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To increase revenue and retain customers, gyms are increasingly turning to personal trainers who offer one-on-one or group sessions.
These classes may be included in the membership price (e.g. a $100 subscription gives him access to five classes a month), but they are often offered as an additional service.
It’s worth noting that gyms are increasingly moving toward full-class business models these days.
Gym memberships can attract additional members to your business, but you can increase your revenue potential by targeting people who want to work out at home or who don’t live in your target community. Online subscription plans allow you to expand your reach and grow your earnings over time.
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In addition to personal trainer sessions, fitness clubs can also offer nutrition planning services for those who need help or advice on healthy eating plans. If you offer fitness classes, introducing nutrition classes and counseling services can be very helpful to your subscribers. For an additional fee, we can also organize individual nutrition classes or a combination of them.
Another way gym owners can generate additional income is by selling fitness and activewear products online or locally. Target existing gym members and introduce an online store to expand your reach.
However, it should be understood that this is an average value. Annual revenue for individual gyms and fitness clubs varies greatly depending on several factors, including:
According to ZipRecruiter, the average US gym owner’s annual income is $69,794. Of course, every gym and fitness club is different, and annual income for individual gym owners can vary greatly.
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According to the 2017 IHRSA Success Profile, the average profit margin for all clubs is 16.5%, 20% for fitness clubs and 15.5% for multipurpose clubs.
To accurately estimate your gym’s profit margin, you must consider all the costs involved in running your business.
The average monthly cost for a gym with 12 employees (including part-time trainers) is $37,000 to $49,500. Learn more about how much it costs to open and run a gym in this comprehensive guide.
See an example gym cost breakdown below. Unsurprisingly, excluding the cost of acquiring machinery, wages and rent account for about 70% of total operating costs.
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You can easily earn income by multiplying the number of gym members by the average membership fee (monthly membership fee).
For example, if he has 300 members who are paying an average of $100 per month, the membership earnings will be $30,000 per month.
However, many gyms also offer classes. If they are part of your membership, of course you don’t have to add them to your income. However, any additions (such as group cycling or personal training) should be added to your total income. For example, if her 30% of members pay her $20 worth of 10 classes per month, her “class income” would be:
When talking about profit, it is usually referred to as EBITDA (earnings before interest, taxes, depreciation and amortization). This is because it shows the basic profitability of the business, excluding things like interest on debt, non-cash expenses, and other non-core expenses. .
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For clarity, the profit and loss of the fitness club (from the gym financial model template) is shown below.
Gross profit (after deducting variable costs) is close to 100% (usually taxes), but his EBITDA margin can be 15-20%, depending on Jim.
The break-even point is the point at which total expenses equal total income. In other words, the break-even point is the amount of revenue required to make a profit.
To be profitable, you must cover at least all your fixed costs (which are not a function of your revenue), so your breakeven point is at least greater than your total fixed costs.
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But you also have to spend a fixed amount for every dollar you sell to pay for your variable costs. As we saw earlier, Jim’s gross margins are very high. This is because almost all gym expenses are actually fixed costs (usually salaries, rent, and leasing costs if you decide to lease).
Using the same example as before, let’s say your gym makes $50,000 per month and has the following cost structure (from this article)
There are several options for increasing your fitness club profits. According to fitness industry analysis, he has 145 million people worldwide. Earned a total of $84 billion!
Before you invest your savings, make sure you understand Jim’s financial projections and how your investment will benefit. This post helps a gym owner create financial projections using his ProjectionHub web application.
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After signing up and verifying your account, you will be asked to enter general business information as follows:
Once you’ve saved your general business information, you can add your business model. If your gym business model has not yet been added to this page, you can add your first gym by clicking the Add Business Model button shown below.
Our company’s web application will generate a certain category of income based on your business model. However, you have two options as shown in the image below.
Once the revenue forecast is complete, you can move on to expenses. There are two main types of expenses:
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Based on information from Anytime Fitness, here is a list of possible initial costs for starting a gym.
As we learn more about specific costs, we can update this list. Some items listed as initial expenses should be recorded as first month expenses, but some items are actually cash spent on the property.
If you have any of these expense types, we recommend adding them later as ‘Assets’ instead of ‘Expenses’ on this page.
ProjectionHub’s Expenses page allows you to add/update activity expenses. The Expenses page lists some standard expense items, along with default monthly expenses for most items. Obviously, you can change these default costs to reflect your particular situation.
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As you can see in the image above, click the check boxes next to these cost categories, select Apply Industry Metrics from the dropdown box, and click Apply.
ProjectionHub uses a 15% sales factor for personal training salaries and a 3% sales factor for credit card charges. So, when you click Apply Industry Ratio, the system multiplies the estimated sales by 15% to calculate, for example, personal training salaries.
Then you can go to the properties section. The Assets page is preloaded with default assets that you can own as a Subway franchise owner.
To add a resource, hover over the line, see his three dots to the left of the resource name, hover over it and click Edit.
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Below you can add your own gym equipment as an example. You can enter the property details as shown below.
You can then go to your Liabilities page and add a loan. If you want to borrow money for the initial cost, you can “Add Commitment” as shown below.
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