The fitness industry in Germany is booming. The desire for a slim, well-toned body, for health and flexibility is driving more and more people to the gym. In 2018 over 10 million had a membership card in their pockets – and an end to the general sports enthusiasm is not in sight.
Why not benefit from this trend? If you are interested in fitness and sports and are looking for a way to start your own business, opening your own gym may be the answer.
Professional Requirements: What kind of education do I need?
In Germany, anyone can open a gym, certain qualifications or permits are not required. Nevertheless, it would not be very wise to enter the fitness industry without previous knowledge. Work experience, for example as a trainer or physiotherapist, combined with a sense of business would be an advantage.
Karsten Leypold, who started his own business a few years ago with a gym, also sees that. The trained sports teacher is convinced that his expertise was as important to his business start-up as his management skills. "That's why I attach so much importance to further education today and make sure to always be up to date in my field of expertise."
If you do not have a suitable education, you should quickly catch up on your coaching license and then spend some time working in a gym. So you learn from the bottom up, what matters in dealing with the customer and how the processes are organized in a gym.
Standard equipment in gyms: treadmills.
Finding the right positioning
The demand in the fitness area is great, but the same is true for the competition. The A & O of your success is a good positioning that sets you apart from the existing fitness and sports offerings. Think about what is special about your studio and what you want to inspire your customers.
Karsten Leypold can answer this question without hesitation: "We help our customers to stay healthy. The special thing about our gym is: We do not just put devices down, we advise our customers intensively during training and motivate them to stay on the ball. "This will counteract the motivation that many will experience as soon as they have signed their membership application and the first one Euphoria is gone.
To develop a suitable positioning like this, there are three things to consider:
- your vision of a good gym
- the existing fitness offer in your region
- the ideas of your target group
The last point is especially important. The more you know the needs of your target group, the more likely you are to convince them of your offer and to retain them in the long run.
To define your audience, ask yourself the following questions:
- What problem do you solve with your offer?
- Who usually has this problem?
- What do these people value?
- Is your target audience big enough?
- How financially strong is your target group?
- How can you reach your target audience to draw attention to your offer?
You can also focus on multiple audiences, increasing your workload. But be careful not to dilute your profile. People need to know what your gym stands for right away – otherwise they will not see any reason to sign up.
Write a business plan for your gym
Your business plan will show you if and when your gym will be profitable and how to reach that goal. You write it primarily for yourself, but also for your financiers and business partners.
In your business plan you deal with all the important aspects of your foundation. You outline your business idea and what is special about it, analyze the market and the competition and define your target group. You outline the measures that you want to use to win and retain customers, and how to handle the risks of starting up.
In the pay part, you are dealing in detail with the finances: you calculate how much starting capital you need and when you can repay it, you quantify the investments and the running costs (for staff, rent, energy etc.) and put them into the turnover across from. From this you derive the break-even point , ie the day on which the revenues cover the expenses for the first time.
All in all, the business plan offers you and all involved the opportunity to objectively assess the chances and risks of creating a gym. At best, it contains a worst-case scenario, a package of measures in the event that business does not start as planned. Because one thing is clear: You will never be able to predict 100% how your gym will evolve. But the more you think through your business idea and the more carefully you test your assumptions, the better prepared you are for the unforeseen. Karsten therefore compares the business plan with a parachute, which protects the parachutist from falling. "It can happen that the screen does not open. That's why you still have a rescue parachute with you. "A plan B, which limits the risk so much that the total catastrophe – the unbraked fall from 4,000 meters – can be prevented.
Multipurpose rooms offer the opportunity to offer guided courses and to do sports in larger groups.
Financing for funding
Presumably, your savings will not be enough to fully finance the start of self-employment. The initial investments in premises and equipment are significant when founding a gym. Add to that the running costs that you probably will not be able to cover with your earnings, at least in the first few months – it will take some time for your marketing efforts to take effect and your offer gets around the city.
In the projects that we looked after or advised on, several hundred thousand euros were usually needed to finance them . On average, around 100,000 euros were spent on investment and another as much on running costs in the first one and a half to three years, when membership was still insufficient to cover the costs. These losses, which start until break even, are called "bridging the start-up phase" in the financing.
This is where banks and savings banks come into play, providing start-up loans – provided that they are convinced of a business idea. In addition to bank credit, you can seek public funding. In particular, promotional loans from KfW and the Investitionsbank in your state are usually slightly cheaper than the bank loan – but are also applied for via a house bank. You have to talk to your bank about whether it recommends funding. Of course, since he always wants to sell his own product, it's not always easy.
There are also other ways of financing. The funding landscape in Germany is huge. Especially popular among founders are of course subsidies that do not have to be repaid. However, they are not easy to get and usually associated with bureaucratic effort ("funds use documents" etc.). Nevertheless, you should discuss this topic with the investment bank in your state and your house bank.
There are two things to consider when financing:
- The lower the risk your bank is judged to never see your money due to a corporate failure, the better the terms will be for you. A convincing business plan is worth a lot of money.
- In general, investment loans are cheaper than loans for working capital (ie the buffer for the start-up phase). This is because investments in real estate or machinery serve as collateral, while the money invested in salaries or rents is irrevocably gone. It is therefore important to determine the individual cost elements in your business plan as accurately as possible. It is very difficult to reallocate an investment loan later for the financing of operating resources and under no circumstances should it be done without consulting your bank.
Karsten advises all founders, who want to open a gym like him, not to be discouraged by any credit cancellations. "At that time, I had to audition at several banks until I found one that would finance my project," he recalls. "Stay tuned but worth it."
We'd like to add something to this tip: Take the concerns of your bankers seriously and revise your business plan if it fails the first time. Mostly they have a good eye for the flaws of a business concept.
Reasons in the team
One way to reduce the risk of start-up is to spread it across multiple shoulders. Have you ever considered bringing one or more business partners on board? In this way, you can simultaneously increase the equity ratio and improve your prospects for a loan.
However, a successful team formation is not a matter of course. Choose your partners wisely. As you complement each other in your strengths and balance your weaknesses, you have great prospects of bringing your company together on a successful course.
Karsten also went this way and with him it worked with the business partner. But he knows that many entrepreneurs are not doing well, "because there's always stress when it comes to making financial decisions. If a business partner or investor is necessary, the competences, rights and obligations must be clearly defined. "
The legal form determines, among other things, how your company is taxed, how far your liability, how much seed capital you need and how the company organization is regulated. Basically, almost all legal forms are open to you for the opening of a fitness studio.
Advice on this topic can not hurt, especially if you decide to start a team. But do not take this issue too hard: it is not a life choice, you can still revise it later.
What you should consider when choosing the location
If you do not want to open an online gym (which may well be an option that pays off), location is extremely important to your success. The catchment area should be big enough and the competition in the area should not be too strong.
For your gym you need enough space (for gymnasiums, equipment rooms, showers and changing rooms, cloakroom, entrance and bar area, wellness area with swimming pool and sauna etc.), and not every commercial area is suitable for this particular use. Apart from special requirements on the floors, attention must be paid to sound and heat insulation and a powerful ventilation system.
Since rent is a major cost factor, it is worthwhile to look for cheap areas. Of course, it does not bother you to rent a cheap property that nobody finds. Always keep an eye on the reachability of your target group when searching for a location. A very good traffic connection and sufficient parking in front of the door are important criteria.
To avoid annoyance, you should contact the construction department at an early stage, especially if major conversions are planned. The employees there are not only there to control compliance with legal requirements, but also to advise you.
Specialized gyms are sometimes aimed specifically at certain athletes, here possibly rowers.
Find good staff
A key role is played by the staff working in your gym. Your employees decide significantly whether your customers feel comfortable in your gym and like to come back. Make sure your staff is top motivated and well educated. All of your fitness coaches and instructors should also be able to identify with your mission statement.
Do not just think about a strategy on how to get good coaches for your business, but also how to tie them in the long run. What offers – beyond a fair salary – can you give them? Flexible working hours, opportunities for further education and a secure future perspective contribute a lot to job satisfaction. Another important point is the working environment. What can you do as a boss to ensure that the atmosphere in the workforce remains collegial and relaxed? How can you prevent or confront conflicts? If you can answer questions like these in your business plan, you'll be collecting valuable assets from your funders.
Franchising as an alternative?
A look at the market data from the fitness industry shows you that the big chains are playing an increasingly important role there. Often behind it are large franchise systems . This means that the individual locations are managed by independent entrepreneurs who pay a certain fee to the franchisor for the use of the naming rights.
If you choose this form of self-employment, you can benefit from brand awareness and a proven business model. In return, you commit to one-to-one implementation of your franchisor's standards.
Karsten's studio is also part of a large franchise community. He has chosen the franchise provider InJoy, which focuses on health-oriented training under professional guidance.
Whether franchising is right for you depends above all on your personal abilities and preferences. If you see yourself more as a doer who loves to get his store up and running on the frontline customer front and has his managerial strengths, then you can be very happy with it. If you're more of a creative guy who wants to implement your own ideas and values their entrepreneurial freedom, then this path may not be the best choice for you.
The formalities at the end: The registration of your gym
The financing has been clarified, the conversion is almost complete and the date for the opening of your gym is set? Then it's time to register your business with the Trades Licensing Office. The trade office will automatically forward your application to the tax office from which you will receive a questionnaire for tax collection. Among other things, you indicate which legal form your gym has, which revenue you count and how your company is organized. Once your data is verified, you will get a tax number that you will need to issue invoices. Uff, done. Now it can start!
Good luck with your gym wishes you Dr. Jan Evers
The Injoy-Studio by Karsten Leypold can be found on the internet: https://www.injoy-rudolstadt.de
In addition, Karsten is on Facebook: https://www.facebook.com/INJOYRudolstadt/
About the author Founding expert dr. Jan Evers is the owner of the consulting firm evers & jung in Hamburg. For ministries, banks and business development organizations, evers & jung GmbH has been developing concepts and solutions for entrepreneurs for more than 15 years that make entrepreneurship easier and more self-reliant.
Create a Nursing Service: Opportunities in a Growing Market
Choose the right business account: Traditional Banks vs. Digital banks
The capital requirement in the business plan: How is your start-up financed?
You dream of opening your own kiosk? We explain how it works
Try Catherine Morland today!
Without risk. No means of payment necessary.
Register without obligation!