Richard Ashe ⋅ Houston, TX Veteran Franchise Advisers ⋅ 30 years experience

Hi India,

You picked an excellent market. According to The Gym, Health & Fitness Clubs market research; " Gym membership has grown rapidly in the past five years as consumers have become increasingly health conscious, bolstering revenue for the Gym, Health and Fitness Clubs industry. Over the next five years, demographic changes are expected to expand the industry's potential market, and increased consumer spending will boost sales of higher-value services. As a result, industry revenue growth is projected to accelerate through 2020..."

One of the challenges you'll face is determining how you'll differentiate you fitness/gym. Gym competition tends to be local so if you have a compelling product for your target demographics you'll be able to compete with the big box gyms fairly well. A fitness clothing line will be a little more challenging with the likes of Nike, Under Amour, Adidas, Reebok, etc. that you'll go up against.

As you conduct your research and contemplate your options to build you business plan, I'd recommend you also take a look at franchising. The ascent of Anytime Fitness to the top of Entrepreneur’s Franchise 500 list in 2014 provides weighty argument for you to explore this model. The franchise hit No. 1 with nearly 2,500 units and 1.9 million members. Anytime is just one of many fitness franchises available there are many more opportunities at a range of investment levels. Franchising can have a distinct advantage with a wider reach of marketing and name recognition. Perhaps you can tie your fitness clothing line into the franchise brand?!?

Another advantage of franchising is it provides a structured, proven system for you to follow. Veterans make great franchisees as well, discipline, teamwork, ability to follow a SOP, etc.** Best of all; franchisors covet the training and skill set that veterans possess and some offer financial incentives for veterans to join their brand.

I hope this info was helpful to you and wish you the best of luck on your quest to be a Vetrepreneur!

**READ: http://www.veteranfranchiseadvisers.com/veterans-make-great-franchisees

Anastasios Handrinos ⋅ Port Richey, FL Handrinos Management: A Consulting Services ⋅ 4 years experience

If you need help with mentoring and coaching to start your own business, check out micromentor.org. This site will assist you with someone who can help.

Jeremy Serwer ⋅ Woodstock, CT The Serwer Company, LLC ⋅ 30 years experience

Hello India,

Two great answers so far, so I'll go in a different direction . . .

Since opening a gym seems first, location and knowing your competition will be very important. While a good location needs to be easily accessible, have good parking, be in a safe area, etc., the rent you'll pay on a lease will be a major ongoing expense you'll have to consider. The one-time expenses of build-out, equipment purchases, permits, etc., have to be added to your up-front capital budget.

I suggest spending some time at other gyms in the area/market you want to operate. Join one or two and go there as a customer. Look for the holes in their operation that you can competitively fill: latest and best equipment, better customer service, personal training, private showers -- whatever it is, you'll want to best it.

I've been in retailing and retail real estate for many years: it doesn't mean I'm a genius, just that I've been around the block a few times and experience has its benefits. Feel free to contact me back through ACP and I can expand further if you wish.

Good luck, and yes, I am truly grateful for your 7 (to be 9) years of service!

JS

Neil Serafin ⋅ Easthampton, MA Telecommunications ⋅ 40 years experience

Figure not paying yourself for at least 6 months. Your employees get paid first, unless you want to put in 3500 hours the first year and you do everything yourself. Start an accounting/tax computer trail as soon as you spend the first dollar. My wife and I borrowed against our house to start a business. It was scary. Lucky for us we made a profit in the first year. Good luck....keep your eye on the prize.

James Watters ⋅ Norman, OK Business Consultant, retired ⋅ 17 years experience

I Hall:
Let's talk about the start-up money questions. How much do you need to "open the doors" and how much do you need to operate the business until your monthly revenue pays all company costs (including profit)? Undercapitalization is a major reason why companies fail. Very often business success doesn't happen as fast as you had planned.

Look at the start-up money as (1) One Time Expenses and (2) Monthly Expenses. Will the company need: space, furniture, equipment, fixtures, inventory, advertising, supplies, deposits, professional fees, permits, grand opening costs, and "other" expenses? There are always "other" costs. What did I leave out?

Next, what are the estimated monthly costs? Payroll and benefits, advertising, postage & freight, communications (phone, fax, computer), maintenance/repairs, taxes, loan payments, utilities, insurance, rental costs, rent/mortgage, supplies (office, store, shop), and "other". For the "other" costs, pick a number, e.g., $1,000 for start-up costs and $500/month.

Relax, best guesses are permitted. But you need to spend some quiet time and think about all of your company's costs. The next estimate you make is very important. How many months will it take to get the company on its feet paying for all costs? Six months, nine months, a year, how long? Be conservative here. It' better to over estimate than to under estimate.

So add your one time costs to the monthly expenses x number of months to get established. For example, one time costs @ $8,000 + $35,000 monthly expense ( $5,000 x 7 months) = $43K. Now where are your sources of money? Equity, Debt & Sales.

Remember, being forewarned is critical for a new business. Good luck