5 Ideas to Build Your Gym Revenue
A profitable gym is a gym that is able to change more lives. So today we are going to share a full gym revenue breakdown as well as some simple profit levers that you can pull in order to increase your gym revenue.
HOW DO GYMS GENERATE REVENUE?
There are a number of ways gyms can create revenue in their gyms. The most common way is by selling membership packages, but there are actually many more ways to generate revenue in a gym.
For example, a gym can level multiple tiers of membership such as semi private and private training sessions.
Gyms can also boost their revenue by expanding into supplement sales, apparel sales, or tacking on nutrition guidance as well.
HOW DO YOU CALCULATE GYM REVENUE?
Revenue in a gym is the total income received for selling your products and services. Revenue differs from profit, as profit is the income left over after all business expenses are paid.
In order to determine your revenue, you would add up all income paid to the business including member dues, session packages purchased, income from supplements, apparel, etc.
According to industry reports, the average revenue of a gym is between $300k and $500k per year.
If you’re looking to increase your revenue and scale your gym, check out some of these profit levers you could be pulling in your gym in order to make more money, change more lives, and build a wildly profitable business.
#1 DECREASE NUMBER OF SESSIONS OFFERED
One of the most obvious gym revenue streams is through the sale of fitness classes. Many gyms offer an unlimited number of class sessions as their premium package offering. The reasoning for most Gym Owners to offer unlimited sessions is because they think it will be perceived as more valuable to their prospects. However, exclusivity creates value.
The most profitable model is to offer a maximum of 3 sessions per week. Not only does your service seem more valuable because of its exclusivity, but you’ve also doubled the capacity of your gym– which means you can sell more memberships.
#2 INCREASE YOUR PRICES
The thought of increasing prices is a scary thought for a lot of Gym Owners. However, most Gym Owners are pricing their services too low and hurting their overall gym revenue. Most Gym Owners offer two tiers of service in the ballpark of $99 for their lower tier option to $129 for their highest tier of service.
What this gym revenue model is missing is the chance for premium customers to pay a significantly higher price, and the meaning behind the extra cost.
What we have found to work the best is three tiers of service– $49/week for large group training, $149 for semi-private training, and $199 or more for private training.
#3 CHANGE YOUR BILLING CYCLE
This is the simplest and easiest way to increase your gym revenue, today. If you currently charge on a monthly basis, change your billing cycle to every 28 days, or every 4 weeks.
That will add an additional 13th billing cycle to your bottom line. For even more perspective, that’s an 8% increase in your revenue without having to teach a single extra class, or acquire a single new customer.
#4 CHANGE YOUR SESSION LENGTH
Another way to increase your gym revenue is to shorten the length of your sessions. Most gyms run 60 minute sessions with a 15 minute break in between them. The problem with that is first, you don’t really need 60 minutes, but also you’re limiting yourself on revenue per hour and revenue per square foot. Also it’s just plain exhausting.
Instead, we want to simplify it. We have seen zero difference in retention, or sales when we drop from 60 minutes to 45, and sometimes even 30 minutes per session.
So, even in a tiny facility, if you can do 30 minutes back to back, you can increase the capacity of your gym.
Think about it this way, if you have a 1200 square foot facility, and let’s say you can only fit 20 people in a class, at 30 minutes per session, you can train 40 people in an hour.
All of a sudden you’re making more money, and you’re able to still provide an exceptional experience.
#5 DECREASE SESSIONS OFFERED PER DAY
How many of us have had to deal with the discomfort of a barely full group exercise class? One reason classes end up having poor energy and bad reviews is because they lack the fullness and community of a packed class. It usually comes down to too many class times being offered.
Lowering the number of classes you offer per day will not only help you cut down on labor costs, but also create more engaging classes for your members. Instead of two empty classes at 4:30pm and 5:30pm, you should combine them into one, full class to increase your overall gym revenue.
BEFORE YOU GO… IS IT WORTH OPENING A GYM?
When done correctly gyms can be an extremely profitable and rewarding venture. There is plenty of money to be made if you follow the recommended business practices found on our page.
We hope you found the information in this article helpful. If you own a gym and would like to simplify how you track your data, check out GymDash.
GymDash is an all in one gym management system that not only tracks your metrics but notifies when the health of your gym is low. Check it out by clicking the button below.