- Gym World
- What sets the most profitable gyms apart?
What sets the most profitable gyms apart?
5 key takeaways from the BFU 2023 Gym Owner Benchmarks Report
What’s up Gym World?
‘Tis the season for fitness industry insights.
I recently talked to Michael Keeler from Business For Unicorns (BFU), a gym mentorship company that helps gym owners run a better business.
We broke down their 2023 Gym Owner Benchmarks Report, which surveyed over 100 gym owners that run small group training gyms. Like Two-Brain’s State of the Industry, this report can help you make smarter decisions for your gym and avoid common pitfalls.
BFU looked at the top 10% most profitable gyms in their study to see what they all had in common. Here are 5 key traits they share:
1. Fewer clients, less revenue & more profit
Most gyms sell small group or 1:1 personal training and charge higher rates per session. Michael says they have better margins following a lean and simple model than gyms that primarily offer large group training.
2. Know how to manage expenses well
Many gym owners don’t pay enough attention to numbers, yet one of the highest ROI things any entrepreneur can do is get financially literate.
Every gym owner should know their way around these three reports:
Profit and Loss (P&L) Statement - This shows how much you spent (expenses) and earned (revenue) over time.
Cash Flow Statement - This tracks cash coming in and out of your gym, so you know if you’re generating enough to cover bills.
Balance Sheet - This lists your assets, liabilities, and owner’s equity, showing the business's ability to pay for operating costs, meet debt obligations, or make distributions to the owner.
3. Lower staff pay
Overpaying staff makes it harder to run a profitable location. To prevent this, carefully look at your compensation package and re-evaluate if necessary:
Are you providing benefits?
Is there a retirement plan like a 401(k)?
Do you fund continuing education?
What about paid time off or sick leave?
BFU suggests keeping Total People Expenses between 25-40% of your Total Revenue.
So if you charge $100 for a training session, a fair starting wage for a trainer would be $25/hr but shouldn’t exceed $40/hr.
4. Grow via referrals
Smaller gyms with under 100 clients see more referrals than larger ones with 300+ members because it’s easier to build relationships and be more personable.
Most leads came from client referrals, word of mouth, or organic social media.
To boost your referral rates, try this:
Identify what drives your members to stay motivated
Mix up your offers to attract different kinds of people
Rotate your strategies every quarter to keep things interesting
Data also tells us that referred customers stick around longer and are more profitable.
Most gyms from the survey retained 97% of members each month. High retention means they spend less to find new people.
5. Prioritize soft skills
The gym can be an overwhelming place, especially for beginners. That’s why the best gyms prioritize making everyone feel welcomed and valued, which encourages clients to keep coming back.
Members value friendliness & knowledge of staff, as well as cleanliness of facilities the most, and training certifications the least.
TL;DR: BFU’s 2023 Wrapped
The top 10% of profitable gyms were smaller and had fewer clients with less revenue.
They focused on 5 key areas of their business:
Competitive staff pay
Strong client retention
P.P.S. If Gym World is your top podcast on Spotify, tag me in your Spotify Wrapped and I’ll send you some merch.