The Monthly Cost of Running a Gym – 6 Things to Account For
Having a solid grasp of monthly gym operating expenses can keep you from overspending and not generating enough revenue to sustain your business. Knowing what monthly costs to expect will help you budget for your gym, make informed decisions about where to spend your money, and maintain your gym’s financial health.
Running a profitable gym requires more than just providing quality equipment and classes. You also need to be aware of the monthly gym operating expenses that can affect your profits, especially when 81% of health and fitness studios go out of business within the first year.
A gym expenses list will vary depending on the size and type of your facility, but there are some common monthly costs that all gyms have to contend with. Here we’ll cover the six most important expenses when budgeting for your gym.
What Are Monthly Gym Operating Expenses?
Setting up and running a gym incurs monthly expenses related to the facility, equipment, staff, marketing, and utilities. Some of these expenses are fixed, meaning they stay the same every month, while others fluctuate based on usage or seasonality. Gym operating expenses can range from a few hundred to tens of thousands of dollars depending on the size, type of gym, and location.
To get a handle on your monthly gym expenses, it’s helpful to break them down into three categories:
- Variable costs: These are monthly expenses that fluctuate based on usage, seasonality, or other factors. They can include utilities, repairs and maintenance, cleaning services, and advertising.
- Fixed costs: These costs, unlike variable costs, stay the same each month regardless of how busy your gym is. They include rent, insurance, and monthly loan payments.
- One-time costs: These are expenses you incur periodically but not monthly. They include equipment purchases, renovations, and licenses and permits.
Understanding how these costs impact your monthly budget will help you decide where to spend your money and how to price your services.
Benefits of Accounting for Monthly Gym Expenses
Americans spend $35 billion annually on gym memberships and fitness classes, so there’s no shortage of demand for fitness facilities. The industry is notoriously competitive, however, with new gyms constantly popping up. To be successful, you must have a firm grasp of your monthly expenses and how they impact your bottom line. Here are the top three benefits of accounting for monthly gym expenses:
1. Helps You Budget for Your Gym
Budgeting is a critical part of running a successful gym. It’s easy to overspend on unnecessary things or fail to generate enough revenue to cover your monthly costs if you don’t have a budget. A clear understanding of your monthly gym expenses will help you create a realistic budget and track your spending over time.
2. Allows You to Make Informed Decisions About Where to Spend Your Money
Knowing what monthly expenses you’re facing makes it easier to make informed decisions about prioritizing your spending. You may invest in energy-efficient equipment to save on monthly utility bills, for example, or you may choose to spend more on marketing to attract new members.
3. Helps You Maintain Your Gym’s Financial Health
Monitoring your monthly gym expenses will help you identify areas where your gym is overspending or not generating enough revenue. This information is crucial to the overall financial health of your business. You must be careful, however, as monthly expenses can quickly spiral out of control and put your gym’s future at risk.
The monthly cost of running a gym can be significant, but these expenses are necessary to keep your business up and running. Managing your monthly expenses properly will help you build a successful and sustainable gym.
6 Monthly Gym Expenses to Account For
Accounting for these six monthly gym expenses will help you stay on top of your finances and make informed decisions about where to spend your money.
Rent makes up a significant chunk of monthly gym expenses. Setting up a gym (unless you’re considering an outdoor gym) requires finding a suitable location, usually by signing a commercial lease.
The monthly cost of your lease will depend on your gym size, location, and amenities. A large gym in a prime location or posh neighborhood will cost more than a smaller gym in a less desirable area. Amenities such as a sauna, steam room, or pool will also drive up the monthly cost of your lease.
Your gym business carries a higher risk of injury than other businesses due to the nature of your services. You’ll therefore need to have adequate insurance coverage to protect your business in the event of an accident or injury.
Theft, fire, and other property damage are risks you’ll need to insure against. The monthly insurance cost will depend on the size and location of your facility and the number of employees and services you offer. Gym insurance policies include:
- General liability
- Professional liability
- Property insurance
- Workers’ compensation
- Business equipment insurance
You must have adequate coverage to help ensure you’re not liable for footing the bill for any damages or injuries at your gym. Be sure you’re properly insured by budgeting for monthly insurance premiums.
Monthly utilities, such as electricity, gas, and water, are crucial to the operation of your gym. These utilities are necessary to heat or cool your facility, run the equipment, or provide restrooms for your members.
Budget $3–4 per square foot of your gym space for annual utility costs. Consider investing in energy-efficient equipment and appliances to keep monthly utility costs under control. Solar panels can also help offset some of your monthly energy costs.
4. Gym Equipment
Gym equipment is an often overlooked monthly expense, but clearly, you wouldn’t manage to offer the services and programs your members rely on if you didn’t have the necessary equipment. The monthly cost of gym equipment will depend on the size and scope of your facility.
A small gym with a limited equipment selection will have lower monthly equipment costs than a large gym with a comprehensive selection of state-of-the-art equipment. High-quality gym equipment will also command a higher price tag but will meet the professional standards your members expect.
5. Gym Management Software
Gym management software helps you run your business more efficiently by automating membership management, billing, and scheduling tasks. It also streamlines marketing, giving you more time to focus on other aspects of your business.
Gym management software will cost you between $100 and $250 per month, depending on the features and functionality you need. Research different gym management software options to find the best fit for your business.
Gym marketing expenses are essential for attracting new members and retaining existing ones. You can leverage several marketing strategies to promote your gym, including social media marketing, email marketing, and content marketing. Each strategy incorporates different tactics and requires a different monthly budget.
For example, social media marketing may require hiring a part-time social media manager, while email marketing can be done in-house with little to no monthly cost. Evaluate different marketing strategies and tactics to find the best fit for your gym and budget.
These monthly expenses are vital to your success, and tracking them will help you stay on top of your budget.
Run a Profitable and Affordable Gym with Loud Rumor
Gym growth pros at Loud Rumor can help you assess your monthly gym expenses and develop a customized marketing and management plan to ensure your gym runs smoothly and efficiently. Our profitable advertising campaigns and professional business consulting services are designed to help you gain a competitive edge, tap into new markets, and boost your bottom line. Schedule your FREE call so we can learn more about your studio.