How to Start a CrossFit Gym

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Quick Reference

Are you a CrossFit fanatic and spend a copious amount of time at the gym? You may have paid your bill and wondered what it would be like to be on the receiving end of all those monthly payments the gym collects. If you have a passion for CrossFit and have some knowledge about it, opening your own CrossFit gym to utilize your skills may be a great new career choice and a way to be your own boss.

Business Overview

CrossFit is an intense style of working out, doing multiple types of exercise in a short amount of time. Exercises include various types of weight and strength training, cardio, and gymnastics. A CrossFit box has the facilities and equipment for CrossFit workouts, and members pay a monthly fee which is generally higher than fees for traditional types of gyms.

Industry Summary

According to Statista, the health and fitness club market in the United States reached over $96 billion in 2019, increasing at a steady rate previously year after year. According to the Global Health and Fitness Association IHRSA, there were over 41,000 fitness centers with over 73 million members in the U.S. as of January 1, 2020.

Industry Trends

The health and fitness club market suffered due to the pandemic and safety concerns and shutdowns, however, IHRSA reports that health clubs retained 7 out of 10 members in 2020. Health and fitness, however, continues to be a priority for many people and should continue to thrive and grow.

CrossFit gyms have been and continue to be a trend in the industry. According to a University of Tennessee report, there are over 14,000 CrossFit gyms (called boxes in the industry) worldwide with over $4 billion in revenue.

Target Market

Your target market will be people interested in health and fitness who follow trends in the industry and are willing to pay a premium membership fee for a CrossFit gym as opposed to a traditional gym.

Skills, Experience, and Education Useful in Running a CrossFit Box

There are several specific skills and education that you will need to open a CrossFit gym.

  • Certification. At a minimum, you will need to have a Level 1 CrossFit trainer certification.
  • Affiliation. You’ll need to be a CrossFit affiliate. You can’t just open a gym and call it a CrossFit gym.
  • Knowledge of your market. You need to know your target market in your area and how to market to them.
  • Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
  • Customer service. You’ll need to be able to build rapport with your customers so that you retain them as customers and gain repeat business and referrals.

Costs to Start a CrossFit Gym

Here are the typical costs you will face when you open a CrossFit gym.

  • Setting up a business name and corporation costs approximately $200.
  • Business cards, brochures, postcards for marketing $200 – $300
  • Website setup $100 –$200 for a basic, do it yourself website, $1,000 – $2,000 for a professional site
  • CrossFit certification (use of the CrossFit brand, logo, and marketing materials) $3,000 (annual fee)
  • Mortgage, lease or rent $750 – $6,000 per month
  • Utilities $150-$500 per month
  • CrossFit gym equipment such as barbells, bumper plates, dumbbells, kettlebells, rowing machines, medicine balls, jump ropes, climbing rings, gymnastics rings, and lots more $5,000 – $25,000
  • CrossFit affiliatefee $3,000
  • Liability insurance, worker’s comp, property-casualty insurance $600 – $1000
  • Initial marketing such as Facebook ads or search engine optimization for your website, $500 -$1000

Steps to Starting a CrossFit Gym

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your CrossFit gym should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.

Related:
How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect CrossFit gym name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

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 a 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.

RelatedComparison of Business Entities

Step 4: Select your Location

Your gym should be in a convenient location with easy access for your target customers. You should also avoid being near another gym so that there is less competition in your specific area.

Make sure you have adequate locker rooms with secure lockers, shelving, toilets, and shower facilities too.  If your existing facility doesn’t already have this, be sure to get a few quotes as it can be expensive to add.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Some common local, state, and federal registrations a CrossFit gym may need include a sales tax permit and an Employer Identification Number.

Related: Common business licenses, permits, and registrations by state

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 from lenders or investors to start a CrossFit gym is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs. Some entrepreneurs use their own funds, a home equity loan, or credit cards, but you are putting your funds at risk and will have payments that may or may not be more than those of a business loan.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

A CrossFit gym will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a CrossFit gym include social media marketing and online advertising. Developing a website can be a significant expense, but it can also give your CrossFit gym greater visibility online.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A CrossFit gym needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Property and casualty insurance protects you if your equipment is damaged.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hire Employees

You will need employees to help you run your CrossFit gym, and your coaches and trainers will need to have their CrossFit certification. You’ll have to decide if you want to pay for their training or have them do it on their own.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up Membership Software

Good software programs will make your box easier to manage. These specialty CrossFit systems help manage setting up memberships, getting paid each month automatically, social integration, and WOD tracking.

Two popular programs are WODIFY and ZenPlanner.

Step 12: Set up an Accounting System

Setting up an accounting system for your CrossFit 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 accounting for your business

How Much Can You Potentially Make Owning a CrossFit Gym?

The monthly membership fee for a CrossFit gym is $100 – $200, so the number of members that you can acquire will drive your revenue. If you charge $150 per month and have 200 members, you can make $30,000 per month in revenue. Keep in mind, though, that you will have significant ongoing expenses. The average CrossFit gym makes about $40,000 per year in profit.

Things to Consider Before Starting a CrossFit Gym

Running a CrossFit gym or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.

The costs to start and run a CrossFit gym are significant. You will need to calculate your ongoing monthly expenses and how many members you will need to at least break even every month. Acquiring customers will be a challenge and require ongoing marketing.

The other challenge is that a CrossFit gym is vulnerable to changes in the overall market. The membership is expensive, and when the economy takes a downturn, it’s an expense that some people will not be able to afford.

Finally, you will face competition, so you will have to make your business stand out and provide a high-quality experience.

All of these factors constitute the risks of starting a new CrossFit business. You will be putting your money on the line and risk losing it if you are not successful.

Before starting, consider talking to other CrossFit gym owners for tips on starting a business and see how they run their business, what equipment they have, and what services they offer.

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