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How to Start a Climbing Gym

How to Start a Climbing Gym

There’s something captivating about the challenge of rock climbing – it’s a combination of thrilling adrenaline, the endless creativity and precise thinking that the sport demands, and the thrill of pushing your body to its limits. But heading out to climb a mountain isn’t always feasible, and that’s where indoor rock climbing has become popular. Climbing gyms give athletes the chance to rock climb in a more convenient, supervised setting. If you have a passion for climbing, starting a climbing gym can allow you to share that passion with others while helping them train and learn to become better, stronger climbers.

Business Overview

Unlike most gyms, which offer a wide variety of exercise equipment, climbing gyms take a much more specific approach. Catering to rock climbers, these facilities use rock walls and climbing equipment to deliver athletes a full-body workout. Some of these gyms may focus entirely on rock walls, offering a variety of walls suitable for climbers of different experience levels. Other gyms take a more comprehensive approach, offering not only rock walls but also exercise equipment that helps climbers develop their strength and refine their skills.

Climbing gyms are often more expensive than traditional gyms, but they’re also popular and deliver some benefits that justify their higher prices. These gyms offer valuable supervised instruction and training in a controlled environment, which is essential to helping climbers safely develop their skills. Climbing is also an excellent cross-training activity for athletes, so while athletes may not head to the climbing gym daily as a part of their core exercise routine, they may seek this type of gym out regularly for cross-training.

Because climbing is a high-risk activity, be sure to enlist the help of a lawyer when developing your rock climbing gym. Your lawyer can advise you about choosing appropriate insurance coverage and can help you create a liability waiver that all climbers must sign before using the gym. Your lawyer will also be a valuable resource when ensuring that the gym holds appropriate business permits and may advise you about what legal signage you need to install in the facility.

Industry Summary

According to IBIS World, the climbing gym industry experienced significant growth from 2014 through 2019. The industry grew by 5.6% during that time, with gyms bringing in $660.2 million in revenue in 2019. As of 2019, 548 climbing gyms were in business, employing 9,865 staff.

The industry’s growth is due to an increased interest in climbing both as a primary activity and as a cross-training opportunity. That interest has been paired with an increase in per capita disposable income that allows athletes to afford gym memberships. IBIS World predicts that an increased interest in climbing will continue to drive industry growth through 2023.

Industry Trends

Many trends shape the rock climbing gym industry. According to the Climbing Business Journal, the 2020 Tokyo Olympics were expected to drive interest in climbing, potentially resulting in more gyms opening and increased revenue. While the Olympics won’t occur during the 2020 summer as planned, the rescheduled Olympic Games may still increase awareness and interest in climbing.

It’s also possible that a recession may negatively impact the industry. Some economists have predicted a 2020 recession, and the climbing industry is easily affected by drops in per capita disposable income.

ISPO notes that indoor climbing setups are increasingly departing from the style of natural climbing opportunities. When indoor climbing began, designers tried to replicate the look and feel of outdoor climbing settings. Today, gyms are creating unique, distinctive climbing opportunities. Artificial climbing walls are installed in malls, shopping centers, and even old factories. These setups may resemble Parcours’ experiences or Ninja Warrior setups.

The indoor climbing industry is increasingly catering to new climbers and families with children, but this requires a shift in marketing and business structure. With most new climbers being friends, family, or partners of current climbers, gyms need to find ways to make these climbers feel welcome and offer easy admittance like guest passes or day passes.

Target Market

Most climbing gyms will primarily market to climbers, but general athletes looking for fun cross-training opportunities are a valuable secondary target market. In addition to marketing to experienced climbers, gyms must also market to new climbers looking to try the sport. Most gyms’ target market consists of athletic adults, though some gyms also have setups specifically for kids, too.

Skills, experience, and education useful in running a rock climbing gym

Starting a climbing gym doesn’t require a business degree, but certain skills and experiences are valuable in both starting and running this type of business.

Climbing experience and knowledge. Experience as a climber and knowledge of the industry are some of the most important and beneficial skills for a climbing gym owner. A gym owner who has not only climbed but who also loves the sport brings insight and enthusiasm to the business that you can’t replace.

Previous experience working in a gym. Experience working in a gym or coaching climbers gives the real-world experience of the operations and challenges of being a gym owner. If you don’t have this direct experience, consider checking out the articles and events from Climbing Business Journal and Climbing Wall Association.

Interpersonal skills. A climbing gym owner needs strong interpersonal skills, which can help to make connections with and build relationships with new clients and current gym members.

Attention to detail. Attention to detail is incredibly important in this business, especially when it comes to monitoring safety.

Creativity. Climbing gyms can face plenty of competition, but a creative gym owner who can develop unique programs, classes, and opportunities can help develop a unique business model and make that gym stand out from others.

Management experience. Experience in hiring, training, and managing employees is important for gym owners since employee management will be a standard aspect of daily gym operations.

Checklist for Starting a Climbing Gym

If you’re thinking about starting your own climbing gym, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your business should be to write a clothing line business plan. Not only will a bank and potential investors require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

Related: How to write a business plan

Step 2: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a climbing gym, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 4: Select your Location

Some gyms operate out of rented properties, while other gyms run out of properties that are purchased. Each option has its advantages. Buying or building an entire facility allows for more customization, though it’s possible to renovate existing rental properties with some patience, too.

Indoor climbing wall operators will need to be aware of OSHA Compliance for Indoor Climbing Gyms (Occupational Safety and Health Administration). In addition, the Climbing Wall Association (CWA) has guidelines and best practices for the building the operation of indoor climbing gyms.

The challenge in finding a location for a climbing gym is to find a facility with ceilings that are tall enough for the walls and boulders. Most climbing gyms will also need space for a retail shop, weight lifting gym, and locker room with showers.
Rent or mortgage costs will vary depending on the property’s size and value, and location. Properties in high-traffic retail areas will have higher costs, but they can also increase awareness of the gym, and their convenience may help drive memberships.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

Each state has different requirements regarding licensing for a gym. Most commonly, there are specific requirements for what can be included in a membership contract. There are additional state requirements if your gym offers personal trainers to be aware of as well.

At the local level, some cities will need to obtain special permits and follow certain requirements.

Last, there are some general business licenses needed such as a local business license, sales tax number, and Employer Identification Number.

Related: What licenses do climbing gyms need?

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a climbing gym is another. Funding to start a climbing gym business can be difficult due to the costs involved. To get a loan, the borrower(s) will need to have good credit and personally invest 15-25% of their money towards the total start-up costs. Due to the high cost, a Small Business Administration (SBA) guarantee may be needed.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get your Marketing Plan in Place

Most climbing gyms kick off with a well-promoted grand opening and then utilize online marketing tactics to bring in new climbers continuously. Common marketing activities include hosting special events, social media outreach, online advertising, print advertising, radio advertising, and even direct mail offers.

Related: Low-cost ideas to market a new business

Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.

Step 9: Get Business Insurance

There are several types of insurance to consider when starting a climbing gym. A few of these include:
General liability insurance protects the gym if a climber is ever injured while on the business’ property. This type of insurance can help to cover resulting expenses like medical bills and legal fees.
Commercial property insurance protects the gym if its equipment or building is destroyed or destroyed in an event like a fire.
Worker’s comp insurance protects the business if an employee is ever injured while on the job. This type of policy can cover expenses like lost wages and medical bills.

The cost to insure a climbing gym depends on many factors, like the gym’s location, the value of its equipment and building, and the number of employees on staff. To get an accurate idea of insurance costs, request quotes from multiple companies. When comparing the quotes, look beyond how the premiums compare and consider other factors like coverage limits, exclusions, and deductibles.

Related: What types of insurance does a climbing gym need?

Step 10: Hire Employees

Even a small climbing gym will need multiple employees. According to Zip Recruiter, gym staff earns an average salary of $32,657 per year. Salaries can range from as little as $16,500 all the way up to $66,000 per year.

Besides covering employee salary costs, a gym also needs to budget for other expenses like paid time off, health insurance contributions, and worker’s comp insurance.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your climbing gym is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a climbing gym?

Starting a climbing gym does carry significant initial costs, so gym owners may seek out investors or take out small business loans to make these upfront payments. Plan to spend anywhere from $200,000 to $300,000 to start a smaller gym. Most of those costs center around the expense of remodeling and constructing the gym’s interior structures. Larger gyms can cost $500,000 and more to start.

Some common startup costs for an indoor climbing gym include:
– Building acquisition or rental deposit
– Building renovation costs
– Climbing equipment, walls, climbing holds, crash pads, and gym equipment
– Supplies like protective gear, belay, rope, chalk bags, harnesses, and cleaning supplies
– Furniture
– Signage

How much can a climbing gym owner make?

Climbing gym profits are affected by many factors, including the gym’s size, profit margins, target market, number of memberships, and more. Current data about the profitability of climbing gyms isn’t available, but gym owners can increase their chances of high profits by identifying unmet needs in the market and delivering unique experiences that climbers can’t find elsewhere.

While gyms dedicated entirely to climbing are successful, additional revenue can come through branching out by offering other training services. In addition to climbing opportunities, consider adding weight training or yoga to appeal to more potential members and to give gym members a broader range of options. Keep in mind that while you can add additional exercise facilities, traditional gyms can add climbing walls, which adds to the competition.

Are there grants to start a climbing gym?

It’s extremely rare to find a grant to start a climbing gym. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.

What is the NAICS code for a climbing gym?

The NAICS code for a climbing gym is 713940, which is categorized under Fitness and Recreational Sports Centers

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Resources:
Association of Fitness Studios
International Climbing and Mountaineering Federation
International Federation of Sport Climbing
International Rock Climbing Research Association
National Association for Health and Fitness
National Gym Association
USA Climbing

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