Business plan for a sports hall: WHAT TO AVOID AT ALL COSTS!
Whether you are passionate about fitness or it represents a good business opportunity, you have plans to open your own gym. Here you are at the stage of the famous business model. The business plan has several objectives:
- Define the commercial and financial strategies of your fitness business.
- Demonstrate the feasibility of your project
- Giving credibility to the company
- Convincing banks/investors to give you a loan
"The success of your business plan is paramount
Here are the mistakes not to be made when drawing up a business plan for your gym:
- Do not present the team and the origin of the project
- Doing a poor job of market research
- Neglecting the importance of digital marketing
- Minimising investments and costs
- Forget additional sales
Mistake #1: Not presenting the team and the origin of the project
Before being about numbers, business is a human adventure. You won't raise money if you don't give a context to your approach.
Your creditors want to know what motivates you to undertake the project. They also want to know about the driver(s) and the rest of the team that will surround you.
During this stage, it is important to highlight the skills and personalities of those involved in the project. Do not forget that investors (banks, funds or individuals) are betting on a project but also on people.
Mistake #2: Doing a poor job of researching the market for your gym
The study of your market is the beating heart of your business plan. Its objective is, above all, to validate the commercial feasibility of your gym.
This study is an analysis of the sector in which your fitness business operates. Gather figures, take an interest in the dynamics of the sports market in France.
The right questions to ask yourself:
Is the environment favourable to this activity?
List the positive and negative elements. The idea is to have an objective knowledge of the market in which you will operate.
Policy = Promotion of sport by public authorities
Economic = Declining purchasing power after the COVID-19 crisis
Social = Welfare trend +
Technological = Home sport application -
Green = New green trends in gyms
Legislative = Safety in ERP
What are the key elements for a successful business in a specific sector (Key Success Factors)?
Here, you need to ask yourself what consumers expect and how your competitors behave.
Develop highly targeted marketing questionnaires to get to know your potential customers inside out. Try to gather as much useful information as possible during this phase.
Questions such as: age, gender, purchasing power are essential but not sufficient. Try to understand the environment in which consumers live, their motivations, their needs.
Moreover, it is essential that you also take an interest in your competitors. The analysis of their strategy and positioning will give you the keys to imagine what your fitness will be.
This work will allow you to begin to imagine :
- Geographical location (definition of your catchment area)
- Positioning (Price + Quality of Service)
- Business model and commercial offers (session booking, subscriptions...)
Be aware that the gym market is extremely competitive and places are expensive. At the end of this study, you must understand what advantages you have over your competitors. This is a prerequisite for launching your business.
For example, you want to launch your fitness room 7 days a week from 6am to 11pm in Nice. After studying the competitors, you realise that this model is also that of the large low-cost chains which have prices that you cannot offer. These low prices are, in part, due to the absence of coaches in the gym.
Your consumer research has shown that a significant proportion of respondents want on-site coaching. You therefore choose to offer personalised coaching to all members of your gym. You are the only one to offer this service in your catchment area: this represents a competitive advantage, exploit it!
Mistake #3: Neglecting the importance of digital marketing for your gym
You can now see more clearly. The viability of your gym 's market has been validated. Now you have to think about your customer acquisition.
This stage is essential, as it will subsequently define your projected turnover.
Here you will need to establish the channels that will allow you to :
- Develop the reputation of your establishment
- Generate interest in your services
- Generating the desire to buy
- Encouraging the act of buying
- Retain your customers and turn them into influencers
A volume of leads is associated with each stage of this funnel. You should be aware that passing between two stages systematically leads to the loss of a part of the prospects recorded at the next stage. This is why it is called a funnel system.
Your task, if you accept it, is to define the volume of prospects expected at each stage. You will ultimately deduce the total volume of sales.
Multiplied by the estimated average basket, you will have an idea, in broad outline, of the turnover that your fitness centre can generate.
- For example, you decide to launch a radio campaign. You choose your station and estimate that the population that will hear your campaign is 10,000 people.
- After researching, you realise that only 50% will be interested in listening, or 5000 prospects.
- Of these 5000 people, 10% will call you for information, i.e. 500 calls received.
- Finally, let's consider a conversion rate of 15% which brings us to a number of 75 signed customers.
(This is an example to illustrate a pathway. The data is not based on research. You will have to do it yourself)
What about digital marketing?
Traditional physical channels such as print, radio and billboards have been losing ground for many years.
This is primarily due to new means of communication such as websites, social networks and mobile applications.
You should take these acquisition channels into account in your strategy, they are essential!
We have prepared a special report on new marketing trends in sports facilities.
For example, a free SEO strategy on your website can be incredibly powerful but will take a lot of time.
In contrast, paid advertising on social platforms such as Facebook or Instagram will give you quick but expensive exposure with an uncertain return on investment.
Furthermore, acquiring customers is important, but keeping them loyal is even more so. The rate of re-subscription in gyms is, on average, only 20%. However, digital tools can boost this ratio.
This is the case of a dedicated application for your gym. Formerly expensive, solutions exist at a lower cost with an outstanding design and integration!
Customers of Doinsport, the most successful software company for gyms, show unequivocal figures. Customers who have opted for a dedicated application see a subscription renewal rate 32% higher than those on a marketplace.
It is important to show that you understand the mechanisms of digital marketing. You must be able to anticipate the volume of members you will be able to convince to join your gym via the channels you choose.
Above all, do not overestimate these figures.
Mistake #4: Underestimating the costs of your gym
The most common mistake made by people seeking finance is to build a forecast with derisory costs.
Let us be clear about this:
! YOU WILL NOT REACH PROFITABILITY IN THE FIRST YEAR!
Therefore, you need to be rigorous about the costs of running your sports complex.
Don't overestimate them either, because the banks don't judge you on the amount of money you are granted, but on your ability to repay the sum.
Thus, by staying as close to reality as possible, but also by considering your expenses as investments, you will be able to convince the financier facing you.
For example, a gym application costing several thousand euros may seem like an unnecessary expense.
But when you know that it allows you to renew 30% more subscriptions or to generate between 5 and 10% additional turnover via an online shop and cross-selling; these thousands of euros spent create value. And that, believe me, will please your banker 🙂
Conversely, machines that are twice as expensive as the market price will generate unjustified costs. Such equipment will prove to be value-destroying...
It is necessary to understand this concept when preparing your projected income statement.
Mistake #5: Forgetting about upselling
Which brings us to our last mistake: forget additional sales.
More than sport, your members are looking for a place to live. This is how you will differentiate yourself from the franchises.
The big brands have focused on low prices by cutting off, among other things, all human contact.
The concept of the " third place " developed by the sociologist Ray Oldenberg has made the fortune of brands such as "Starbucks" or "McDonald's": why not yours?
In a few words, a third place is a space that is neither your working nor your living environment.
It is very popular because it is a neutral place conducive to relaxation. It is also a space that allows certain "nomadic" workers to come and work while consuming.
We can easily imagine a company executive, seeking to clean up his lifestyle, coming to do a sports session and eating on the spot during his lunch break.
The bar/restaurant and a "boutique" service can constitute up to 30% of your gym's turnover. Neglecting this aspect means missing out on an extremely important source of income.
Discover how to develop your turnover with Doinsport!