Gyms Health Clubs

How Do Gyms And Health Clubs Work?

The title may sound like a silly question, but a little more thought begins to provoke all sorts of questions in your mind about the possibilities behind the running of a health club facility. In fact, running a health club is a lot more complex than people first conceive, however with some simple fundamentals explained, it's easy to make sense of the health club model.

A Business Plan

First of all, it's very important to remember that although a 'health club' sounds like a place where you go to exercise and relax, it's still very much a business at its core. This therefore means that in order to run a health club, its owner must first devise a business plan. The business plan for a health club consists of many factors that define how the business will run, but mainly outlines the fact that a health club offers a service to its members, of which they pay for the service on a monthly basis. These monthly payments can then be used to make projections about the financial future of the health club business.

A Franchise or a Chain?

Once a business plan has been established for the up and coming gyms or health clubs, the next step is to identify whether or not the business will create facilities for itself to run, or whether the business plan and health club brand will be sold out as part of a franchise. It is important to differentiate between a franchise or chain path for the health club business as early as possible, as the future of the business, and its scale, will be affected by such an enormous decision.

A franchise is useful for a start-up health club business that wishes to expand its brand as quickly as possible, with the lowest capital investment required. The investment will come from franchisees, who wish to buy-in to the business, and they will also bear the health club's branding and adopt its business plan.

If a corporation is expanding into the health club market, or a business is being created from a pool of investment, it is likely that the chain approach will be selected, as it offers the greatest return on investment if successful, as all assets and profits are owned by the health club business itself.

Marketing and Advertising

The marketing budget for a new health club chain or franchise should be large enough to fund extensive initial advertising campaigns. Promotions are run to attract new members to come and join the club, with the possibility of lower membership fees in order to undercut the competition and therefore spark interest in the health and fitness club being created.

A trend for zany and inventive ad campaigns has been seen over the past few years, as the supply of health club facilities increases, and so does the competition.

What Services Should be on Offer

The services that health clubs offer should be hospitable in their very nature. Customer service is at the forefront of any business that deals with, and provides services directly to, the customer. This includes health clubs, and especially start-up health clubs who need to keep their brand intact in order to retain continued custom.

Typical services include: a gym facility with cardio, circuit training and free weights sections; a spa area with rooms that offer treatment or specialist facilities, i.e. massage and sauna rooms; classes in a variety of different topics and skills; a personal training team that is dedicated to providing in-house support to the health club's members; a nutrition area (with an optional café).

The sheer amount of services provided within the facility requires a large number of staff, from the customer services, to a café if applicable, and to all of the personal training staff who have to provide help and fitness planning services to all of the members. As a result, staff costs are one of the biggest long run costs for the business.

Premises and Costing

Acquiring and/or building premises for a gym can be one of the biggest outlays for a health club business, however franchisees will normally receive financial support on their investment. Running costs of the facility have to be considered, along with the aforementioned staff costs.

The costs are made up for by memberships, individual and corporate, on a monthly payment basis. Because of the contract nature of the membership agreement with its customers, the health club is in an ideal position for financial planning.

Keeping the Customers

The biggest problem that gyms and health clubs face is retaining their customers once they are members. Minimum contracts may apply to membership, however it's all too easy for a customer to take their money elsewhere if the health club isn't providing them with a good deal. It's a case for the excellent customer service that's required to keep a health club business running.

Written by Witantra

 

 

 

 

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