business plan basic fit

💡JC's Newsletter

business plan basic fit

Basic-Fit: building a gym business and a lightweight job-to-be-done framework

💡jc's newsletter #117.

business plan basic fit

Dear friends, 

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👉 Jonathan Abenaim - Basic-Fit: Increasing Returns to Scale ( Join Colossus )

Overview: Basic-Fit. The Netherlands based, operates over a thousand clubs across five countries and has 2 million combined members in their system. If you walk into a Basic-Fit gym, all you see is essentially the showers, social corner and the weight and cardio equipment. They have about 2.2 million members across a network of a thousand clubs in the Netherlands, Belgium, Spain, and France. The business today does about 800 million euro of revenue , and is by far the largest operator on the entire continent.

➡️ Interesting overview of their scale. Their markets are a perfect overlap with ours (except the Netherlands, it will be interesting to understand why).

Market: About 1 in 10 people in Europe go to the gym, and the US is about one in five people.

​​➡️ So, building services around the gym would be for 10% of our members (maybe slightly more given our populations) with the potential to go to 20% if we become similar to the US.

To the average person going to gym is under 30 years old. At Basic-Fit, it's younger. Unit economics: We could walk through the economies of gym openings for Basic-Fit. They're very simple. There's about 1.2 million euros in upfront CapEx , which includes the fitness equip plus any structural building reinforcement, the showers, AC, wiring, Samsung TVs, the clubs then break even at about 1600 members. And that's a level they reach within five months, and then clubs mature at about 3,300 members within 24 months. At which point they will generate 420,000 euros of EBITDA.

➡️ 3.3k members is not that big. 

Basic-Fit that runs their locations with about two and a half full-time employees , which costs them about 130,000 euros per year in personnel costs.

➡️ Very impressive.

The average independent gym will run their locations with about six full-time employees . So personnel costs are much higher, and those gyms are only able to offer a membership at 39 euros a month. So Basic-Fit basically cuts down that membership to 20 euros a month and earns a 50% margin.

➡️ Even 20€ a month is huge compared to our coverage and what people pay for health insurance. 

Type of members: 20% to 30% of Basic-Fit members are what I call sleepers. They're members that have joined Basic-Fit because just like Netflix, if they're in the mood to watch a movie that is available to them. So about 20% to 30% are members that come once a month, the rest are members that really benefit from having a low cost gym in their town, which is close to their home or close to their office. If you look at Basic-Fit, the average length of stay is 24 months. And for an independence, it's about 12 months. Density: So if you look at Bordeaux, which is a great example of how powerful the Basic-Fit model is, Basic-Fit has 13 gems. If you look at the average gym, which has 3,300 members, you multiply that by the amount of gyms they have in Bordeaux, that would equal about 43,000 members in the Bordeaux area. There's about 300,000 residents in total and the greater Bordeaux area. So if you pencil out 20% penetration, that would mean that basic has 70% member share. Content: Basic-Fit also provides access to its mobile app and its vast content library for at home workouts. All their content is catered to the local language and local culture. So in Spain, for example, people are more attracted to the idea of working out in a class environment. So you have more live classes in Spain. There's an important local aspect to low cost fitness.

🏯 Building a company

👉 Niantic CEO John Hanke talked to Decoder about, among other things, deciding to shut down its Harry Potter game that it was making with Warner Bros. ( The Verge )

“You’ve been around the tech industry for a long time, you know that every time two companies are trying to do something in a cooperative way, that process is just harder . I mean, I’m sure you see that even inside your own organization: when trying to make decisions — and when more and more people join the table — it becomes harder and harder to move quickly. We just didn’t think we’re going to be able to get it done.” 

➡️ About how hard it is to do a partnership.

👉 Brain Food: Why Expensive is Cheap, Setbacks, and Influence ( Newsletterest )

"Steam, electricity, aviation, the automobile, the telephone, the computer, the microchip, the Internet, and many more in the future. These innovations tend to follow patterns, have similar growth rates, similar obstacles to growth, and so on . Cars at first had no highways and gas stations, the Internet had no broadband, telegraphs had no poles and wires.

➡️ Every new innovation/invention starts ugly. 

👉 Build Products That Solve Real Problems With This Lightweight JTBD Framework ( Review FirstRound )

Just because something is proven to be healthy or lead to good outcomes doesn’t ensure people will be motivated to try it out. The idea is that innovators win by resolving a consumer’s struggle and satisfying their unmet aspiration. "People don't simply buy products or services, they 'hire' them to make progress in specific circumstances." A jobs to be done statement concisely describes the way a particular product or service fits into a person's life to help them achieve a particular task, goal, or outcome that was previously unachievable. Jobs describe the underlying human needs , not the features of the product. Jobs illuminate consumer insights on underlying motivations and struggles, not business objectives. Example of Discord:  Core audience: initially PC gamers Motivations: communicate synchronously while playing a game, find others and organize enough people to get a game going Barriers: split attention while playing a game makes it hard to use chat only, connecting with others who share your gaming interests and skill level  What else are they hiring/firing: other social media, messaging apps Discord JTBD: When I want to jump into my favorite game, but I don’t know if there are people around to play, help me safely coordinate with a group of like-minded gamers, so I can easily find a way to enjoy my favorite multiplayer game. This suggests features like making it easy to find people through public or private servers and switching easily from text to voice chat as you organize and jump into a game.

🗞In the news


👉 DALL-E, the Metaverse, and Zero Marginal Content ( Stratechery )

Dall-E 2 is a new AI system from OpenAI that can take simple text descriptions like “A koala dunking a basketball” and turn them into photorealistic images that have never existed before. DALL-E 2 can also realistically edit and re-touch photos...

➡️ The results are really impressive. 

👉 What the press could learn from Discord ( Platformer )

Discord now claims 150 million monthly users, who log into 19 million active servers a week.

👉 The Future of Crowdfunding Creative Projects ( Kickstarter )

As a first step, we’re supporting the development of an open source protocol that will essentially create a decentralized version of Kickstarter’s core functionality. This will live on a public blockchain, and be available for collaborators, independent contributors, and even Kickstarter competitors, from all over the world to build upon, connect to, or use.

➡️ Should we open up Alan even more?

We’ve chosen Celo , an open source and carbon negative blockchain platform, as the best technology and community on which to build the protocol.

👉 German Tech Unicorn Personio Creates $66 Million Charity Fund ( Forbes )

Munich-based HR startup Personio has joined a growing number of startups like Twilio , Atlassian and Canva that have pledged to donate 1% of the company’s equity to charity. Unusually the Personio’s 1% equity commitment is non-dilutive and any new investors who join later rounds will also need to contribute. “So all our new investors have to live with slightly lower returns on their investments given that part of their returns will flow into the foundations and everyone has to sign on to that,” says Renner. “Initially this caused some confusion with many investors seeing this clause for the first time, especially their lawyers, because it reduces their economic upside but it was nice to see over time they saw why it was an important part of our culture.”

​​➡️ Interesting. Would you be interested in Alan giving 1% of our equity to our most active members? Do you think it would be a good idea to explore?

🏥 Healthcare

👉 Weekly Health Tech Reads 4/10 ( Health Tech Nerds )

Oura, makers of the consumer wearable Oura ring, raised a "meaningful amount of capital" at a $2.55 billion valuation. Link, an AI imaging platform, raised $100 million at a $1.2 billion valuation. Link German startup Avi Medical raised 50 million euros as it seeks to build 10 new primary care clinics in Germany. Although note the funding will be to build out the tech platform, as Avi uses debt to finance clinic build-outs. Avi is free to patients, as its covered by the German healthcare system, and it now has over 20,000 patients. Link  

👉 Two More Startups Cease Operations As VC Investors Step Back ( Bloomberg )

Ahead, which sold medication for treating ADHD onine, is shutting down, the company announced on its website. Founded in 2019, the San Francisco-based startup had raised $9 million in funding from telehealth company Truepill, according to financial data firm PitchBook. News of Ahead’s shut down was first reported by Bloomberg. The company is the second behavioral health startup to fold this week. New York-based Halcyon Health, which offered virtual addiction treatment, shut down after struggling to raise additional capital, Axios reported on Friday. Halcyon had previously raised $2.5 million in seed funding from Notation Capital, Version One Ventures and others. More than a dozen other startups have shut down so far this year, according to technology data provider CB Insights, as venture capitalists become less generous with their capital amid rising inflation rates, an ongoing war in Ukraine and a rout in tech stocks.

➡️ There might be some M&A opportunities in the coming months.

👉 Télémédecine: le Cnom s’inquiète d’un “mésusage” et cible les plateformes ( tic santé )

Renouvelle son appel aux pouvoirs publics à réglementer le secteur, en visant au premier chef les plateformes commerciales, et fait état de remontées des conseils départementaux sur l'implantation de "télécabines". L'avenant n°9 à la convention médicale de 2016, qu'il conteste devant le Conseil d'Etat, s'agissant de la suppression du principe de connaissance préalable du patient. L'ordre s'inquiète d'une prise en charge du patient "exclusivement en télémédecine", et s'oppose à une pratique exclusive de la télémédecine par le médecin , susceptible d'entraîner une perte d'expérience en le plaçant en situation d'insuffisance professionnelle. Le Cnom observe que "si le médecin téléconsultant n'exerce pas en présentiel dans le même territoire que le patient, la méconnaissance de la réalité du terrain par le médecin posera difficulté". Il juge inacceptable qu'un médecin prenne en charge un patient "sans possibilité de procéder à un examen clinique chaque fois que cela est souhaitable , sans aucun ancrage territorial ni aucune connaissance du tissu sanitaire et médico-social, sans se préoccuper de son parcours de soins [et] sans apporter une garantie que la continuité des soins pourra être assurée".

➡️ It would be great to spend time thinking about what would be the new “parcours de soin” in the world of technology and digital medicine, and unlock even more the power of geographic distribution.  

Il renouvelle ensuite ses critiques à l'égard des plateformes commerciales "se présentant en 'offreurs de soins' en dehors de toute organisation territoriale reconnue et de tout parcours de soins", en violation des stipulations conventionnelles. Il rappelle la fermeture d'un site internet promettant la délivrance d'arrêts maladie, ainsi que celle d'une plateforme de téléconsultations à laquelle il s'était adossé, dans un jugement rendu en novembre 2020 et actuellement frappé d'appel. Il rappelle qu'en amont de la téléconsultation, le patient et le médecin doivent être respectivement informés en parallèle "par l'interface fournie par le prestataire/plateforme commerciale" de l'identité et de la localisation de son interlocuteur. Le téléconsultant doit par ailleurs "s'assurer de la traçabilité de l'acte" et transmettre un compte rendu au médecin traitant. Le Cnom avertit contre le caractère illégal, retenu en première instance dans un jugement rendu fin 2020 contre une mutuelle, d'une campagne nationale de promotion de ces plateformes , qui "procurent aux médecins exerçant par l'intermédiaire de leurs sites" un avantage interdit aux autres médecins qui respectent le cadre de la télémédecine.

👉 Pursuit of value-based care brings potential significant pay-off, setup attractive for 2022; Initiate Managed Care ( Goldman Sachs )

Position the MCOs well to begin to bend the medical cost curve and capitalize on new profit streams. We see OSCR as most at risk given new competition in its key markets , its 2022 premium growth in its largest market FL is expected to be below cost trend, and its limited progress with per-member profitability per state insurance filings. UNH (Buy, $535 12-month price target): We are bullish on the near and long term opportunity for already-dominant UNH as the company drives earnings power through OptumCare. OSCR (Sell, $6.50 12-month price target): OSCR faces risk to its multi-year path to profitability given its exposure to the competitive IFP end-market and limited progress with profitability. The company has been successful in growing its IFP member base, and while plan members are usually less profitable in Year 1 and t hat improves over time, the company has not demonstrated improvement in per-member profitability in states like CA, TX, and NY. We would become more positive on the stock if the company demonstrated the ability to profitably scale or saw more traction with health plan partnerships as indication of the monetization of its technology platform investments. A look at 2021: COVID spikes drove higher cost trend than initially expected. In 2020, OSCR operated the cheapest EPO network plan in Florida, with its premiums priced 9% below the average for this plan type. While it took a low-single digit rate increase in 2021, it has applied for a rate decrease in 2022 and is poised to be the second lowest cost plan out of all the insurers. OSCR’s attractive pricing resulted in meaningful membership gains, and we estimate Florida now represents over 40% of OSCR’s HIX membership in 2021. OSCR priced aggressively in Florida, which resulted in membership gains but a significant net loss per member . It appears that OSCR is maintaining its low-price positioning for 2022. It is not clear that profitability of the business will improve significantly despite the increased scale of its member base. The company has been successful in growing its IFP member base, more than doubling membership in two years. We think this growth has benefited from attractive plan pricing below market averages. As a result, we see risk to OSCR achieving its goal of profitability for the insurance business by 2023. Three large states (FL, CA, TX) account for ~75% of OSCR’s membership, and OSCR will face additional competition in those markets in 2022. Despite being in the CA market for several years, OSCR appears to operate at a net loss per member, and this loss has been increasing. New York, OSCR’s first state, an example of what may be to come: New York is OSCR’s 4th largest state and one of its founding markets. OSCR has experienced declining enrollment in NY as it pulled back on its efforts in the state. While net loss per member has improved since 2016-2017, it has come at the expense of membership, and the improvement stalled a bit in 2019-2020. Despite over five years in the state, the company’s NY subsidiary is still not profitable. Faster than expected member growth, improvements in MLR/medical cost management, and growth in member profitability could represent upside to our estimates and importantly build confidence in the longer term model. 12-month price target: We apply an EV/NTM Sales multiple of 0.25x, given OSCR’s lack of profitability through our forecast period , an increasingly competitive end-market, and high rate of cash burn. Our 12-month price target of $6.50 is based 100% on EV/Sales of 0.25x on NTM estimates 12 months out. Tech platform opportunity a unique upside area though still early days: OSCR sees an opportunity to license its technology platform to various players healthcare system (i.e. other health plans) that may lack the capital and/or sophistication to build out certain insurance functions with high degrees of user experience, integration, or automation. A key customer win was HealthFirst, which will go live on 1/1/22 and could deliver $50mn of incremental revenue in 2022. Increased traction with the +Oscar offering could drive upside to revenue.

➡️ A bit of an old analysis of Oscar that shows how they are perceived. It is interesting to see the multiple of 0.25x EV/NTM Sales because of no path to profitability (we have a clear one), competition (we are in a better position) and their high rate of cash burn (we are significantly better). Still, I sincerely believe and hope they will prove everyone wrong :) 

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business plan basic fit

Ready for more?

Basic Fit Stock Analysis – Very Risky Business Model

Basic Fit (AMS: BFIT ) went public 5 years ago, did really well up till the Covid situation when there was a bankruptcy scare like stock crash there but things soon rebounded. The market capitalization is 2.23 billion EUR.

Basic Fit stock price historical chart

Let us look at the business, fundamentals and conclude with an investment thesis. I have included it into my stocks to short video that you can watch here:

Basic Fit Stock Analysis – Business Overview

Basic Fit is a fast-growing European gym chain focusing on the Benelux, France and Spain.

Basic Fit stock analysis – Source: Basic Fit IR

Then below chart shows the upside from the growth story ahead but also the risk. The previous brand the management started did not do really well, despite the growth it had up to 2012.

Basic Fit stock analysis – Source: Basic Fit IR

At first look, the company has found a good business model and it is scaling it across Europe.

Basic Fit stock analysis – Source: Basic Fit IR

The business model thesis is that Europe should reach the same gym membership penetration as the US has.

Basic Fit stock analysis – Source: Basic Fit IR

The growth strategy is based on being the low-cost provider of fitness services with value added sales on top.

Basic Fit stock analysis – Source: Basic Fit IR

The growth plan is to grow 50% in Benelux and France and scale to 450 clubs in Spain. The current number of clubs is below 1,000 and their goal is to have 2,000.

Basic Fit stock analysis – Source: Basic Fit IR

When a club reaches maturity, it is profitable according to the company.

Basic Fit stock analysis – Source: Basic Fit IR

My issue with these businesses is that you must constantly find new customers. Length of stay is 22 months on average.

Basic Fit stock analysis – Source: Basic Fit IR

As the gym trend gets replaced by something else, things might not look as stellar. Nevertheless, they have nice targets when it comes to investing. Return on invested capital is expected to be above 30% per year. If it is necessary to invest around 1.2 million for a club, that is net income of 400 million which is a great result. But wait, they don’t calculate net income, they use EBITDA for ROIC calculation ?!?!?!?!!

Text Description automatically generated

ROIC formula – Source: Investopedia

When management uses financial metrics wrongly, this is a big red warning flag because EBTIDA used in such way is usually ‘bullshit’ earnings as would Charlie Munger call this. You will see later how the ‘manipulate’ that number. Nothing illegal, but not really something to count on as an investor.

Basic Fit stock analysis – Source: Basic Fit IR

Therefore, I really would be careful in looking at these stories.

Basic Fit stock analysis – Source: Basic Fit IR

Let’s take a look at the financials and see what the reality behind the above ‘stellar’ metrics is.

Basic Fit Stock Analysis – Financials

I have looked at 2019 cash flows to have a stable year eliminating Covid impact. The biggest factor impacting profits is depreciation.

Basic fit financials – 2019 Results

Then you have to look at what is calculated there, and the biggest factor is leases, which is not for equipment and for me is an operating cost, not depreciation.

Basic fit 2020 annual report

On top of the second accounting divergence of opinion I have with them, debt on the balance sheet is almost at revenue level or even higher when adding the latest bridge facility.

Basic fit stock analysis

When you cannot make money in a normal accounting way, you must constantly adjust things to make your business look better.

Basic fit stock analysis

I thought there might be some value in the equipment depreciation, but after 8 years you must refurbish your gym, so not much value left.

Basic fit stock analysis

Or you can sell it to your even cheaper competitor to get some value – haha.

Growth ahead could be 10 to 15% as they hope to double their market and number of clubs, but I wonder if the same economics for gyms hold in Spain and the Netherlands (Think weather).

Basic fit stock analysis

Anyway, these guys are burning cash for business as usual even if they call it growth and investment, they depreciate assets that is just a cost called rent so the operating cash flow they use to calculate EBITDA and ROIC is just smoke for naïve investors.

Basic Fit Stock Analysis – Investment Conclusion

Even if I take 2019 numbers and assume a best-case scenario, the stock is trading at 5 times sales, net income has been minimal and capex spending is 50% of revenue. That is an extremely risky business model for me especially as there is no moat, competitors can enter the market freely and thus this is just a numbers game, a speed game. My point being, that when the numbers turn, and those will sooner or later for various reasons, the following happens.

Basic fit stock analysis

If I would discuss a best-case scenario, they should go to 2 billion in revenue, reach $200 million in pure profits to justify the current valuation.

Too risky for me!

Is this a short?

Going short something implies knowing the direction of where the stock will go, which is something I have no idea about. If they double the number of clubs and the market is happy about that, the stock can triple easily. Going short gives me unlimited downside and limited upside as I can only make 100%.

Plus, I might be right on the business model and it might collapse, but I can’t know when that will happen. Thus again, holding a short for years is also extremely costly, just ask all the ‘smart’ people that have been short Tesla over the last decade. More discussion on shorting in the video .

I am not really working on a newsletter anymore, if you want to contact me, check my Research Platform above or send me an email through the contact form.

Email address:

Basic-Fit: Buying The Largest European Fitness Operator On A Deep Coronavirus Discount

The Millennial Investor profile picture

Basic-Fit ( OTCPK:BSFFF ) is a fitness company that operates mostly in Western Europe. The company is listed on the Euronext Amsterdam. With just shy of 800 clubs and more than 2.2 million members in FY19 , it is the largest gym operator in Europe. Unlike many peers, Basic-Fit operates all its clubs itself. It presides mostly in France and The Netherlands, but also has clubs in Spain, Belgium and Luxembourg. The company targets everyday people with its low prices. Basic-Fit wants to appeal to the broader population, roughly 80% of the population over 14, who think gyms are too expensive. Basic-Fit offers a comfort or premium membership. The comfort gives you access to all Basic-Fit gyms, while the premium membership lets you take a friend with you and is shareable with your housemate. The prices of the comfort and premium are, respectively, €19.99 and €29.99.

business plan basic fit

(Source: Google Images )

Business model

Unlike most other gym operators, such as Planet Fitness ( PLNT ), Basic-Fit does not use the franchise model. Franchising has the advantage that it is less of a hassle to open a new store. The franchisee leads the gym and pays x% of its revenue to the franchiser. However, we often see that revenues and margins are higher on self-operated stores. We also see this with Planet Fitness. An advantage of franchising is that franchisers often also (partly) pay for the building and the equipment. It takes Basic-Fit on average 1.1 million to open a new gym. As a result, Basic-Fit is not able to open as many clubs as Planet Fitness. This can be a negative thing because there are huge economies of scale in the gym market - think of bargaining power for equipment, or new members joining because a friend is also going to the same gym operator. However, since Basic-Fit is already the largest gym operator in Europe, I think the company made a good decision to keep margins high by operating the gyms itself.

Income statement

The company generates revenue in multiple ways. It earns money from (I) membership fees, (II) joining fees, (III) fees received from personal trainers and physical therapists who offer their services in their clubs, and (IV) sports water subscriptions. Membership fees are by far the largest revenue source, but the smaller segments have great potential and have lower marginal costs.

In FY19, revenue grew year over year from €402 million to €515 million, or 28%. Adjusted net earnings increased by 20% to €32.8 million, while EBITDA increased 26% to €152.8 million. Adjusted earnings grew by a smaller percentage because of higher financing cost. Total memberships increased by 21% to 2.211 million. These growth numbers make Basic-Fit the largest and fastest-growing fitness chain in Europe.

Management stated earlier that it plans to open 2,000 more stores in Europe. Currently, the company has 784 clubs. Almost half of them are located in France. Furthermore, it has 199 clubs in The Netherlands and 183 clubs in Belgium. The company has "only" 36 clubs in Spain; however, management plans to open 150 clubs a year, most of which will be opened in Spain. Management plans to have a total of 450 clubs in Spain. Since Spain does not have a lot of big fitness chains, the company expects to penetrate the market pretty easily with its economies of scale. Furthermore, it wants to more than double its presence in France to 900 clubs.

Because of the (mandatory) closure of all Basic-Fit’s gyms in Europe, the company will make a lot less money this fiscal year. As a result, opening of new clubs will get delayed. This will not only hurt profits right now, but also decrease long-term growth rates. I am still waiting on management’s comments about the situation.

Cash Flow Statement and Balance Sheet

In FY19, total long-term liabilities were €1.4 billion. With an adjusted EBITDA of €155 million, this resulted in a debt-to-EBITDA ratio of 9, which is very high. Remember, however, that IFRS 16 requires that lease liabilities are included on the balance sheet. If we do not take leases into account, the debt-to-EBITDA ratio is equal to 3.44. Net cash flow from operating activities amounted to €150 million, compared to €118 million in 2018. Management uses the following two terms in its cash flow statement: "maintenance capex" and "expansion capex". Because of the coronavirus outbreak, cash flow will decline. It is hard to cut back on maintenance capex, therefore club expansion will likely decrease a lot. This will free up a maximum of €229 million in cash flow. In addition, the company secured another loan of €150 million. This should leave Basic-Fit with enough cash for at least one year.

ING, the largest bank of The Netherlands, also released a report stating that even if all clubs stay closed for 2 months, it will not result in a liquidity problem. In addition, European governments are likely to pay part of the salary expenses of businesses that completely shut down because of the coronavirus crisis. Salary expenses amounted to €89 million in FY19, which was 19% of total operating costs. If these costs decrease, I think Basic-Fit can safely sit out the pandemic. We have to remember that in the long term, fitness will only increase in popularity. Smaller fitness operators are likely to get hit harder than Basic-Fit because they have less cash and borrowing options. When the smaller operators go bankrupt, this could actually benefit Basic-Fit in the long run.

Since the outbreak of coronavirus, Basic-Fit stock price dropped from €35.2 to €11.72, or 66%. As a result, the P/E ratio is now sitting at 58.6. The free cash flow per stock is currently 4.21. Price-to-sales is 3.33, which is higher than the sector median of 0.42 . However, other companies in the sector are not growing as much as Basic-Fit. Many competitors operate less than 100 gyms, and are therefore not considered growth stocks. When we compare it to Planet Fitness’ price-to-sales of 3.58, Basic-Fit’s valuation seems far more reasonable. Basic-Fit currently does not pay a dividend, and management does not expect this to change in the short to medium term. It is better to open more clubs than to already reward shareholders. The European market is currently not dominated by a large fitness chain. Winning this race is far more important than paying a dividend.

Concluding thoughts

Basic-Fit is operating in a fast-growing, future-proof market. The European shutdown has created a nice entry point. While the company looks expensive at a P/E of nearly 60, the long-term revenue growth rate of 25% seems sustainable. In addition, the company’s economies of scale will only benefit it further in the future. Being the largest fitness operator in Europe creates better bargaining power. The company can safely survive the coronavirus crisis with enough cash on hand, and will likely come stronger out of the crisis. With a debt-to-EBITDA ratio of 3.44, the company is better-positioned than Planet Fitness with a ratio of 8.41 . I am buying the stock on this coronavirus discount.

Planet Fitness

If you enjoyed this article and would like to get more exposure to fitness operators, I suggest you also check out Planet Fitness. Click here to read my article about the second largest US gym operator (written prior to the coronavirus outbreak).

This article provides information about Basic-Fit. I would like to point out that Basic-Fit is a Dutch company, and thus reports its earnings in euros. Currently, the EUR/dollar exchange rate swings between 1.07 and 1.14. You should realize that by investing in Basic-Fit as a U.S. investor, you are exposed to (unwanted) exchange rate wins or losses.

Additional Remark : I am a 22-year-old student, who started investing four years ago. I write about stocks that fit a millennial portfolio. If you want to be kept up to date, please follow me by clicking on the orange button at the top of this article.

This article was written by

The Millennial Investor profile picture

Disclosure: I am/we are long BSFFF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

How to Create a Fitness Studio Business Plan

Whether you are starting a studio, or already run one, a well-crafted fitness studio business plan is essential for building a profitable fitness business. A solid gym business plan helps you stay on track by identifying key market dynamics, illuminating opportunities for competitive advantage, and giving you key performance metrics to focus on. 

Your fitness studio business plan may drive such critical decisions as where to locate your gym, how large a space to buy or lease, how many staff members you hire, what their pay rates should be, how many fitness classes and what type of classes and training programs you’ll offer, and the most effective ways to promote your fitness business. 

If you own and operate an already established fitness business, revising your business plan – or creating one if you never have – can make a huge difference in boosting your bottom line and helping you to grow, especially if your gym’s growth has plateaued. A business plan is a constantly evolving blueprint that should reflect where your fitness business is in the moment, and let stakeholders know where you’re going and how you plan to get there. 

In this post, we’ll review the elements of a solid small gym fitness plan, give you some gym business plan examples and links to gym business plan templates.

Here are the key elements of any good fitness studio business plan:

Executive summary.

In this section of your gym’s business plan get down on paper your “why.” What is the purpose of your fitness business plan? What elements will you include in your gym’s business plan and why? How will this business plan demonstrate the viability of your fitness studio over time? What are your long term goals and how will you define success? Consider this section your “elevator pitch.” 

Starting a fitness business is no small feat. Doing your homework up front will not only give you confidence to weather the ups and downs of running your own business, but show potential investors that you’re prepared. Imagine being an investor who is reading your business plan, and whom you want to assure that you’ve got a solid vision backed up by well researched facts and figures. Add a few lines about your fitness business’s “why” that inspire and demonstrate your passion and commitment as a small gym or fitness business entrepreneur. 

Company Overview

This is the place to give all the details about who, what, where, when and why your fitness business exists. Include your mission and vision plus a detailed description of the type of services your fitness business offers and to whom. How is your gym or fitness studio structured? Is it independently owned by one or more people? Is it a franchise? Is there more than one location? What is the ownership structure? Are there shares? How are important business decisions made and by whom? 

This is the place to give clear, concise information about the products and services you offer, why you started your fitness business and what differentiates you in your local market. 

Industry Analysis

Taking time to research your market, understand trends and map the competitive landscape can make or break a fitness business, whether you’re in start-up mode, or an established player. 

What is your population size? How far are the people living in your area willing to travel to work out? What is your target demographic in terms of age, gender, income and other lifestyle factors? Pinpoint your major competitors. Get to know their pricing and promotions. Is there an unmet need in your area that your fitness business can tap into? You may want to consider using a SWOT format, outlining the strengths, weaknesses, opportunities and threats for competing gyms and your fitness studio. 

Also, make sure you’re on top of the latest national and global fitness industry trends like online workouts and gym-goers' preference for small boutique fitness experiences versus big box gyms. What innovative programs and services are top companies offering? Why? 

Marketing Strategy

Many small fitness business plans rely solely on word of mouth to promote their gym. While getting great recommendations through your community is an essential step in building a thriving fitness community, long-term, your fitness studio needs to have a solid, multi-channel marketing strategy to maximize your brand’s exposure to potential new customers. 

In today’s competitive fitness industry landscape, it’s essential to understand how to efficiently use digital marketing platforms like social media, local search and email. To effectively run promotional programs, having a fitness business software platform that tracks your customer’s engagement and includes email, web and social media integrations is essential. 

List all the key members of your fitness studio’s leadership team and include professional, biographical information that highlights their skills and experience. Your gym’s leadership team could include owners, board members, investors, lead instructors, sales and customer service representative and any business advisors you may have brought on board. 

Describe how each person on the team will guide your fitness business to success. Consider including compensation structures and information about performance bonuses. Plan ahead for an eventual sale of your fitness business and formalize how owners and/or investors will be paid. 

This is the section where many new business owners are overly optimistic. Base your financial projections on fact and always over-estimate expenses and under-estimate revenues. This includes being realistic about membership sales, seasonal fluctuations, attendance and staff turn-over. Calculate your gym’s monthly expenses and then figure out what your revenue per class or training session needs to be to cover your expenses plus owners’ compensation. From here you can determine how many class passes and/or monthly membership’s your fitness business will need to be profitable. 

There can be a high turn-over rate in the gym business, so you’ll need a steady stream of potential new students coming through your doors each month, and know at what rate they will convert into long-term customers. Know your fitness niche’s average new student conversion rate. 

Build out at least five years of financial profit and loss estimates. Be sure to take into account any rent increases in your lease, taxes, increases in instructor pay and get granular with your expenses, from phone and internet to Facebook ads to the toilet paper in the bathroom, and don’t forget all those new cleaning products you’ll need to operate safely and courteously in a post-pandemic world. 

Gym Business Plan Templates This site offers a free outline of all the core content you’ll need to include in a fitness studio business plan. You can purchase a step-by-step business plan builder, including access to customer service and expert advise for $97. Business Plan is rated A+ by the Better Business Bureau and has strong, positive ratings from satisfied customers. 

Bplans If you need a bit of inspiration check out or Bplans DIY gym sample plans for fitness centers, corporate fitness, gyms, health clubs, as well as martial arts studios, gymnastics schools, and a number of other athletics businesses.

For those who want a higher level of support in creating a full fleged, modern business plan, Bplans offers a paid option called LivePlan . It contains the same templates and information you can access for free on the company’s website, plus additional guidance to help you develop a complete plan. Pricing starts at $12/mo. for a year subscription or $18/mo for a 6 mo. plan.

Institute of Personal Trainers This well-respected trade organization offers personal trainers a free business plan that includes step-by-step instructions. You can download the guide using the link on the association’s website. The institute understand that during the process of writing a business plan you will be presented with questions, ideas or challenges that you might not have thought of before. According to the organization, this alone makes it worth doing.

Remember, it’s better to start the process of creating a gym business plan, even if you feel intimidated, than to procrastinate until you feel you’ll get it perfectly right. There is a wealth of knowledge to be gained simply by going through the process. Writing out your fitness studio business plan may open your eyes to blind spots in your business strategy or long-term performance goals and shift your business into a whole new realm of growth opportunity in the coming year. 

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Personal Trainer Business Plan – Free Download

personal trainer business plan - free download

Use this personal trainer business plan as your template to create the best personal fitness facility in town that’s also a thriving, profitable fitness business! This personal trainer business plan includes market analysis, strategy, more.

Download this Personal Trainer Business Plan free for easy editing in Google Docs, Microsoft Word or Apple Pages:

Download Now

Table of Contents

1.0 Executive Summary


BuffUp Lake Oswego is a franchise of BuffUp, Inc. BuffUp is the principal strength and conditioning program for people of all shapes and sizes, from the highly specialized combat warrior to the grandmother trying to build enough strength to pick herself up after a fall. This is a fitness program that is, by design, broad, general and inclusive. Our franchise is a limited liability company located in Lake Oswego, Oregon. This personal trainer business plan describes the business opportunity, strategy and tactics to build a thriving business.


BuffUp Lake Oswego provides individuals the opportunity to exceed their fitness expectations.  This is delivered through expert coaching, high-quality equipment, convenient scheduling and exceptional exercise programs.

When a person exercises in a group, has fun and uses everyday functional movements; he or she is far more likely to exercise more often, eat better, have less injuries and lose weight while gaining muscle mass. Our program is provides all of the elements necessary for participants to achieve their fitness goals.


As this personal trainer business plan shows, the market for fitness training reflects the demographics and standard of living in much the same way that the major gyms and personal training facilities are segmented. In general, BuffUp attracts adults in the 30 to 60 year old range, who either live or work in the area.  Lake Oswego has roughly 96,000 people that fall into that range. Of course, BuffUp will appeal to many persons beyond this group, but this is our strongest market segment.


BuffUp Lake Oswego will leverage its alliance with BuffUp Inc. to help gain early customer traction. Prior to opening the facility, a free training program in a local park will be offered, which will help spark interest and will illustrate the type of training that is available. The company will have a heavy web presence, led by an online blog that will form a community among the members of the club, as well as attract new members.


Brian Ortiz and Jake Austin are the founding partners of BuffUp Lake Oswego. They have participated in other BuffUp franchises for several years, and both are certified as BuffUp trainers. They also have business backgrounds, as well as a strong network of clients that are interested in the service.

workout training partners


BuffUp will acquire 85 customers in the first year, which will generate approximately $125,000 in revenue. Our projections for this personal trainer business plan is that the client base will continue to grow by 100 customers each year until the maximum capacity is met in year 5. Recurring revenue is a critical part of the business model. The company will be cash flow positive in the first year.


BuffUp Lake Oswego is seeking $45,000 through a line of credit that will be used to secure a facility, equipment and for marketing expenses. This line of credit will be paid off within the three years.

2.0 Company Summary


BuffUp Lake Oswego is a franchise of BuffUp, Inc. BuffUp is the principal strength and conditioning program for people of all shapes and sizes, from the highly specialized combat warrior to the grandmother trying to build enough strength to pick herself up after a fall. This is a fitness program that is, by design, broad, general and inclusive. We do not specialize. We generalize. Sports, combat, survival and life reward are just a few of the accomplished goals of our program.  Our program utilizes the ten standards of fitness; cardiovascular/respiratory endurance, stamina, strength, flexibility, power, speed, coordination, agility, balance and accuracy.  It’s very hard exercise that works!


BuffUp Lake Oswego is currently registered with the Secretary of State (Oregon ) as a limited liability company under the name “The BOJT Company, LLC”.  We plan on operating as “The BOJT Company, LLC DBA BuffUp Lake Oswego”.


BuffUp Lake Oswego is located in Lake Oswego, Oregon.  We will be occupying roughly 2,200 to 3,000 square feet of light industrial space. Service and sales area: 200 square feet.  Workout space: 1500 to 2000 square feet.  Office: 200 square feet.  Restrooms: 300 to 600 square feet.

3.0 Products and Services



One-on-one coaching (Fundamentals): Each client must attend five one-on-one sessions with our BuffUp Level 1 certified coach. Within those five sessions, the client will learn the basic techniques to successfully complete a group WOD (workout of the day). These basic techniques include:

Cost: $250 (one-time fee)

Group WOD’s: After clients go through one-on-one training, and have shown that they are proficient in the basic moves, they can join our group WOD’s. These workouts include some, if not all, of the aspects of the fundamentals class. Each workout will be varied in intensity and in the techniques used. Clients will be timed and expected to push their mental and physical limits every time they enter the facility.

Cost: $150 per month or $1800 per year.

personal fitness business plan


While there are many fitness alternatives, such as gyms, biking, hiking, organized sports and personal trainers, BuffUp has few competitors. We offer the benefits of private training at a cost comparable to gym memberships.

There are several national chain gyms in Lake Oswego, but only 24 Hour Fitness is within our immediate area. BuffUp Lake Oswego will open its doors close to a 24 Hour Fitness location with the intention of attracting some of its customers.

Additionally, as described in the Marketing Strategy of this personal trainer business plan, no other competitors are actively engaging with their clients and prospects daily through educational content via social media. Most of the posts by the competition revolves around self-promotion. Our focus is on the client, who is the center of BuffUp’s brand development strategy, so our structured and automated approach to educational and inspirational coaching content can overshadow our competitor’s marketing efforts.


BuffUp Lake Oswego will eventually shift the way society views fitness.  People buy our services because we capitalize on every flaw a “global gym” has to offer.  BuffUp offers real one-on-one coaching each and every time a person comes into the facility at a fraction of the cost of a “global gym”.  Most gyms offer personal training for $50-$100 a session.  Our gym charges $150 per month for unlimited sessions.

Our facility creates workouts that compound full body movements.  These workouts are fun, very intense and can be scaled to all ages and experience levels.  The typical “global gym” caters to the bodybuilder types that have no functionality to what life can throw at you.  Our gym doesn’t use expensive, useless machines that isolate each muscle, thereby creating uneven muscle balance.  BuffUp gives each individual an opportunity to lose weight, gain muscle mass and regain the agility and balance once enjoyed a child.

BuffUp Lake Oswego will establish the first BuffUp facility in our city, and we acquired exclusive rights to open future BuffUp locations in the area.


In the future, BuffUp Lake Oswego will open additional locations to meet the needs of our area.

We are also studying the possibility of expanding into physical education programs and sports programs in area schools.  This would be done as a consulting business or a contract for services.

We also plan to build an online store featuring the merchandise offered at our facility and other items.  We will also host specialty seminars on nutrition, Olympic lifting, etc. These additional revenues will add to our bottom line.

4.0 Market Analysis Summary


The market for fitness training reflects the demographics and standard of living in much the same way that the major gyms and personal training facilities are segmented. Below are listed market segments based on the usual demographics seen in today’s fitness industry:


BuffUp appeals to adults in the 30 to 60 year old range, who either live or work in the area.  Lake Oswego has roughly 96,000 people that fall into that range. Of course, BuffUp will attract people outside this group, but this is our strongest market segment, which is why all of the tactics in this personal trainer business plan are targeted at this demographic. As stated above, our minimum required population within 5 miles should be 50,000 people.

Our population within 5 miles is 232,647. Average household income should be $75,000 or higher.  43.6% of the population either meet or exceed $75,000. More than 15% of the US population has a gym membership, and more than 67% of those with memberships aren’t satisfied with what they have and don’t go on a regular basis. BuffUp Lake Oswego realizes that with quality services and exciting workouts, we can capture at least 1% of the 34,897 people with gym memberships within a 5-mile radius of our location. This equates to 348 new members, which exceeds our goal of 200 members.

market size

When doing research on the fitness industry, we’ve found that there is a definite shift from the ordinary workout session (weights and running) to the increasingly popular group sessions. These workouts have proven to be more effective and enjoyable for participants.


The SWOT analysis provides us with an opportunity to examine the strengths and weaknesses BuffUp Lake Oswego must address. It also allows us to examine the opportunities presented to BuffUp Lake Oswego as well as potential threats.


5.0 Strategy & Implementation


BuffUp Lake Oswego will build and provide the only fitness facility truly dedicated to solving the fitness needs of our customers.  This will be done through providing the highest quality equipment available, constantly keeping our staff up to date on certifications, providing a clean and crowd-free gym.

personal fitness plan


Our website gives our customers an opportunity view current information on special events, schedule training, buy products and participate in an online fitness community. will be promoted on all of our flyers, business cards and promo pieces.  We are linked to (main site) and to over 750 franchises around the world. is nearing its completion date.  We will maintain a simple and classy site.  The website logos and graphics share the same artwork found on our signage and marketing materials.  Our managers will maintain the website. MindBody will provide the programming for all the billing and scheduling done through our website.  As part of our package with MindBody, technical support will be included.


Our marketing activities include the following:


For the gym goers that aren’t satisfied with their fitness routine, BuffUp Lake Oswego provides high intensity exercise that WORKS! Unlike 24 Hour Fitness or Bally’s Total Fitness, BuffUp is fast, fun and extremely effective.

Client Engagement:

As with many businesses today, our social media activity is a fast and efficient way to stay top-of-mind with our clients. Since creating social media posts, including blog articles and guides that our customers will find useful can be time-consuming, we will license private-label rights content, PLR Coaching Content , that is designed specifically for our market.

This will save time and money while allowing us to stay engaged daily with our audience. We will use a WordPress content autoloader to pre-load several months of motivational quotes, inspirational articles, nutritional guidance and more onto our website to free up our team’s time to focus on supporting our customers and still maintain online engagement.


BuffUp Lake Oswego’s promotion strategy consists of word of mouth, email promotions and local advertising (newspaper, school flyers and non-profit organizations). We will also do regular lead-generating exercises in local parks.

We will make presentations to athletic directors and coaches of the local high schools and colleges. Since our background is in public safety, we will also present this program to our local public safety officers, such as police and fire personnel. We will actively participate in the local Chamber of Commerce and enter our members in local fitness events.

Our biggest promotional tool besides word of mouth comes from our website. Our website is linked to the main BuffUp website that generates millions of hits throughout the year. When customers are looking for fitness programs, they will usually find themselves going through the BuffUp main page and then searching for a gym near them. If they live in Lake Oswego or nearby, the site will recommend our website, which gives the customer everything they need to join our club.


To acquire customers regularly, this personal trainer business plan outlines our unique marketing strategies that focus on awareness and personal touch.

Every Saturday, BuffUp Lake Oswego will meet at a park and invite all current members to bring friends and family to participate in a workout.  They will learn the basic moves and complete a WOD or Work Out of the Day.  This gives new individuals a chance to experience what BuffUp is about and shows them how effective the program is.

Guests will fill out a contact card and will be followed up on at a later date with invites to come down to our facility and a link to our website where they can find videos and blogs that support our fitness community.

This marketing strategy allows us to generate many leads and gives potential customers a chance to actually try something before they buy. This strategy will continue for the live of our business. Most current BuffUp businesses have done this and have found great success doing so.


BuffUp Lake Oswego is affiliated with BuffUp Inc.  BuffUp Inc. promotes the fitness programs of all franchisees.  Since 2001, this company has grown tremendously.  As a franchise, we are tied into over 720 like-minded facilities throughout the world that are becoming increasingly popular.  This internet community allows thousands of people to become exposed to our program.

group fitness classes


Our team will focus on marketing, leading classes and continued education. All staff members will hold a BuffUp Level 1 certification.  This instructor/trainer course insures that all employees have demonstrated the ability to teach the BuffUp Method. We will constantly improve our teaching methods through continual participation in certification courses in all aspects of fitness training and nutrition.

Our primary goal is to create a community committed to elite functional fitness.  Our monthly objective is to generate at least 20 new members. This will allow us to become a profitable fitness business.

We aim to open and run a facility at full capacity within the first two years with 150 to 200 members.


The owners of BuffUp Lake Oswego are establishing this business as a cash flow company for themselves and as a vehicle to pursue their passion for fitness. BuffUp will provide adequate dividends to the owners, as well as generate enough revenue to pay off the initial loan in the first three years. The owners may exit the business through an acquisition by another BuffUp affiliate or a larger fitness chain.

6.0 Management Summary


The company will follow a hierarchical structure with Brian Ortiz and Jake Austin at the top as co-presidents and Mrs. Hannah Ortiz and Mrs. Miranda Austin as facility heads.  The sales, advertising, workouts, expenditures and Q&A will consist of only those individuals until such time as growth of the company will require more people.  This is anticipated to occur in year two to four.


BuffUp Lake Oswego must have a level 1 BuffUp certification to train all members.  Both owners/presidents hold this minimum requirement, and our management team will be fully certified within the next six months.  All potential employees will be required to hold that certificate.  Payroll and accounting issues will be completed by our managers and cleared by a co-owner.

Brian Ortiz and Jake Austin have participated in other BuffUp franchises for several years, and both are certified as BuffUp trainers. They also have business backgrounds, as well as a strong network of clients that are interested in the service.

7.0 Financial Plan


BuffUp Lake Oswego requires $45,000 to begin operations. This will be in the form of a line of credit secured from a bank and personally guaranteed by the owners.


The funds requested in this personal trainer business plan will be used to lease a commercial space and buy necessary exercise equipment. Marketing expenses and initial accounting software will also be purchased with these funds. A portion of the funds will be used for operating expenses until profits are realized.


BuffUp will officially open in January 2009. First year revenues are projected to be $129,375. Revenues will grow to $382,800 in year 5. During the same period, net profit will grow from $36,700 to $186,460.

Details are provided in the attached income statement.

The business will reach break-even once it generates 36 monthly members. BuffUp will become profitable before the end of its first full year.


The business will maintain primary assets of equipment and cash. The business will work hard to reduce liabilities with the goal of paying off all liabilities by the end of our third year.


These projections are based on the assumption that fitness trends will continue and competition will remain relatively the same.

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Writing a Gym Business Plan? 10 Step Guide To Gym Business Strategy

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If you’re reading this, you’re probably the type of person who takes exercising seriously.

Has the idea of starting a gym suddenly sparked your interest? Or perhaps it’s a lifelong ambition of yours, and you are now ready to make a move.

Either way, what’s brilliant is that you’ve picked the right door. Because the first step you need to take is creating a gym business plan .

As the notorious American football coach, Paul “Bear” Bryant, once said, “It’s not the will to win that matters—everyone has that. It’s the will to prepare to win that matters.”

Knowing the structure of your business, understanding your target market and Unique Selling Point (USP), forecasting your financials, and hashing out any other details about your future gym: these are the vital components needed to create a valuable business plan.

Are you ready to make a name for yourself in a £4.7 billion industry which is steadily growing? Then let’s get started.

But before we get on the treadmill….

Ask yourself: can you afford to run a gym? This venture could see you outlay on equipment, personal trainers, class instructors, insurance policies, property fees, and more, depending on the scope of your gym.

If you’re comfortable financially, think about how much personal time you are willing to sacrifice, especially in the beginning. Maintaining that work/life balance is one of the greatest challenges of starting any business; you’ll probably need extra working hours to become fully operational.

Remember, though, that money and time won’t be enough to pass ‘Go’ if you don’t have good people skills, a savvy head for marketing and sales, or the ability to manage your finances (unless you have extra cash to splash out on skilled people …).

But here’s the good news: it will be worth the money and the hard work if this is your passion. And a big or small gym business plan is a reliable way to make that dream a reality.

Your Gym Business Plan Template

gym business plan

The latter group is crucial as Score, an entrepreneur mentoring enterprise, explains: in order to raise the capital you need for your gym to grow, “individuals or banks want a realistic forecast for when they will be reaping on their capital” to confidently invest in your gym.

Below is a comprehensive template for your business plan. Include all ten stages and you’ll fly. Miss one and you’ll fall. Because they are all equally relevant to your future as a gym owner.

Step 1: Executive Summary

Your executive summary needs to shout:

The what – your goals

The why – your mission

The how – what’s going to make you a success story

The bigger picture – your vision

It has to be attention-grabbing, to the point and clarifying. Which is why you need to keep it short. But that doesn’t mean you should rush this part of your business plan. It is your business pitch after all, as the Telegraph explains:

“The fact of the matter is that decision makers can only read so much in the course of a day. So if authors want their work to be paid attention, they must first sell it with a convincing pitch. To this end, executive summaries are a necessary and essential part of running a business, from start to finish.”

If you’re itching to say more on your goals and vision, don’t panic. You can flesh out these points in your company overview.

Step 2: Company Overview

gym business overview

This is where you put passion onto paper.

In your executive summary, you briefly outlined your vision and mission statement. In your company overview, you can elaborate on these points for further insight. Think of your vision statement as if it were a tagline on your future website. Cover:

Your mission statement can be more personal. Talk about your desired outcome for the business. Here’s an example from Nike :

“To bring inspiration and innovation to every athlete in the world. If you have a body, you have an athlete”

Consider the main reason you decided to go into this industry and share it. Is there something you want to change about the fitness world? Or make it better?

Then give your readers a brief word on your history:

Again, this is useful for your investors and partners in understanding your journey and future plans. The more they know, the more they trust you.

Then you need to outline your strategy: discuss what services you plan to offer in the beginning, and how you might approach development and new offerings. Perhaps you’ll need to hire an instructor or build a new facility like a spa or studio. This will be a valuable resource for helping you realise when or where you might need funding or extra staff.

Get another green tick for thinking about ways to increase your market share. You could set up pro bono services with workplaces and schools, for instance. Then you might start to introduce a fee gradually: an efficient way to convert big target customers.

Whether you want to create a gym and spa business plan or any other kind of blueprint, an overview should communicate your planning objectives to potential bankers, partners, employees and financial backers.

Step 3: Management

Consider the positions you’ll need to fill and how these people are going to help your gym succeed..

What’s your employee ladder going to look like? What or who will they be responsible for? What incentives can you offer?

Follow this through into a summary that emphasises how their skills and management experience will solidify your business’s success.

Go back and read this section as if you are an outsider considering becoming a partner to this gym. Does the management structure make you feel satisfied and excited, or concerned?

If it’s the latter, explore how you can change this by making your chain of command stronger.

Step 4: Market Research and Marketing

gym and spa business plan

If marketing isn’t your thing, motivate yourself with the knowledge that solid research and marketing strategies will help you map out a plan for growth.

Your first goal is to summarise your market research. Not quite there with your findings? Think about your location, existing gyms in the area, and your local demographic.

When you are ready, use this space to define your target market. It might be:

Or even a specific group, like cyclists. Then explore why this specific demographic would join a gym – i.e. for cardio.

Having done your market research, you should have a better understanding of your target audience. Now ask yourself:

Answer these in your plan and define your Unique Selling Point (USP). This should communicate what makes your enterprise a valuable investment opportunity.

Identify your marketing strategies here and you’ll feel more secure about raising your business’s income in the future.

Your marketing strategy might include niche services such as:

And any other ideas you have to build your customer base and increase your revenue.

Step 5: Services and Amenities

fitness gym business

Here are some examples of products you might buy:

And services:

For bonus points: describe the benefits of your products and services. Perhaps this is a gym and spa business plan ; look to demonstrate why this added facility would be a valuable asset to your customers.

Next, you want to create a pricing list. The easiest way to do this is to bullet point the costs for specific products and services. This will lead you to your financial forecasting.

Step 6: Financial Projections

Create a menu for your gym. What do you need to spend your capital on? Leave no table unturned, and make sure you put an estimate next to each purchase.

Here are some key areas to get the ball rolling:

Then it’s time to get real. Get out your calculator and write down how much you will need to successfully launch your gym. This will give you a clear indication of what you can achieve with your budget, and what you might need funding for.

Your next step in this part of your gym business plan is to highlight potential sources of income.

The idea is to reassure your investors, stakeholders and potential employees that you have a solid plan for your return on investment. Think about how much your services will bring in i.e. classes, a cafe, services, a spa and jot down your educated guess here.

You could also explore opportunities to sell products , such as health foods. You could produce your own protein shakes or energy bars, for example. Just ensure that if you do plan to sell food you keep in check with food hygiene standards.

Step 7: Financial forecasting:

financial forecasting

“Your sales forecast is the backbone of your business plan. People measure a business and its growth by sales, and your sales forecast sets the standard for expenses, profits and growth.”

Outline your sales forecast for the first, second and third year of your business. It might also be a good idea to detail your active members predictions for your first year.

Make an educated guess based on:

Step 8: Financial Strategy

How will you use your fees to increase enrolment? Perhaps you discovered that all the gyms in your area have higher prices than average. This would be a golden opportunity to add value to your business by being financially sensitive (you could lower your membership fees or have better offers than the competition).

You could also think about rewards for loyal customers, discounts for group registrations, and pro bonos (as we previously discussed).

Additionally, if you’re creating a gym and spa business plan , compliment your gym with discounts for the spa facilities (jumping in the jacuzzi after a workout session is a gym-goer’s dream come true).

Putting your pricing strategy on paper will make you feel more secure about the future of your gym. The Balance contributor, Darrell Zahorsky , agrees:

“The pricing strategy of your small business can ultimately determine your fate. Small business owners can ensure profitability and longevity by paying close attention to their pricing strategy.”

Step 9: Payment Options

How a customer pays for their gym membership or other fees is important. Use clunky, out of date and unregulated systems for processing payments and you’ll repel your customers.

If you do have a quick and painless booking system or banking platform in mind, make it known in this section of your gym business plan .This will instil confidence in your potential investors: with a seamless buyer experience in operation, your customers have an extra reason to be loyal to you.

Your most obvious choice is a managed direct debit service .

Because having automated payments in place ensures that bills are never forgotten, delayed or lost, allowing you to maintain a solid cash flow.

And the easiest way to integrate this into your business is to use a third-party to operate any direct debits on your behalf.

Take FastPay, for instance. Its simple user interface does wonders for user experience.

And since FastPay independently processes your payments, you’ll never have to chase down customers, giving you more time to focus on developing other areas of customer service. It’s also secure: customers are protected by the Direct Debit guarantee.

With a Direct Debit solution like FastPay in place, your customer retention level will rise. Why would they move to a competitor if paying for a class or gym membership through you is so effortless?

Step 10: Funding

gym business funding

Here are the key external resources you might consider to get funded:

Detail exactly where you plan to get your funding from and how much you are going to gain. And if you’ve previously made loan applications, make a note of them here for any potential investor to consider.

You’re One Step Closer to Cutting the Red Ribbon

With a big or small gym business plan that details everything you have learnt today, you’ll be unstoppable in your new venture. Because you now have a solid roadmap that:

Your Personal Checklist:

Before you leave, here’s a personal checklist to guide you through the next stages of running your own gym. Refer to it throughout the development of your business to ensure you don’t miss a thing.

Starting any business is not without its challenges, but the rewards are more than worth it in the end. Sign up to a Direct Debit bureau and make collecting recurring payments from your fitness suite members a reliable, secure and pain-free process. It’ll be a weight off your mind.

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