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Did you know that around 20% of businesses in the UK fail within their first year, and 60% fail within their first three?

It’s no secret that starting a business in the fitness industry is tough. You have to raise capital, find premises, get the doors open and attract paying customers. It’s rewarding, but it doesn’t come without hard work. 

We speak to fitness startups like yours every day, so we’ve put together five reasons why fitness startups fail and what you can do to avoid these mistakes.

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Lack of business knowledge. 

If this is your first time starting a business, it’s okay to figure it out as you go along. Most of us do. However, a big reason why gyms fail is due to a lack of general business knowledge. Financial management, leadership, networking and problem solving are all required skills for running a business.

When hurdles arise, don’t bury your head in the sand. Use the resources around you to your advantage and consider taking additional courses to boost your business skills. You can also speak to advisors or even people that have once been in your position of opening a new gym and get their take on what to do versus what not to do.

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Not enough focus on marketing.

It’s common for new gym owners to dip in and out of marketing; mainly because they have so many other responsibilities to attend to. Posting on Facebook or sending out prospect email campaigns are low on the list of priorities since more reactive tasks often take precedent.

Another common mistake is treating marketing as a one-off campaign when in reality it’s a culmination of many different tactics to constantly drive new leads and attract the right type of people to your fitness business. Great marketing makes it easier to close a sale, so it’s worth carving out time to create a strategy. Create buyer personas, experiment with different strategies, and then analyse and adapt based on the results. You can read more on creating a marketing strategy for your gym startup here.

Neglecting finances.

It’s completely natural to have a little panic when faced with a financial challenge (i.e. not selling enough, funding falling through, rent increases etc.). Some of these things you simply can’t control… but you can control how you respond to them.

Don’t bury your head in the sand. Make a plan.

Ensure you have clear visibility over your finances and business performance so that you can identify any issues before they happen. Give yourself a revenue target that you need to hit monthly/annually to cover your expenses and concentrate on doing everything you can to hit that break-even point in your first year. Get an accountant to help you forecast and plan for future investments or potential challenges.

Lack of adaptability

The pandemic is a perfect example of how life can change almost overnight. The fitness industry ground to a halt and businesses were forced to adapt to lockdowns and restrictions or face permanent closure. So what can we learn from this experience?

Thankfully, we’re well on our way out of the pandemic at the time of writing and we’re returning to a near-normal way of living again, but that doesn’t mean you can relax entirely. Always be ready to pivot.

For example, you might have invested in a new route to market that hasn’t been as popular as you predicted. People’s buying habits and circumstances could change overnight – which is more likely than ever due to the rising cost of living and the great resignation – so make sure you have an armoury of ideas that you can implement.

ClubRight has first-hand experience on how important it is to adapt to the circumstances you’re presented with. Back in 2020 when gyms were told they had to close their doors, we were inundated with rightfully frantic gym owners reaching out to us unsure of what to do next. So, in a matter of days, we introduced a free integration with Zoom so that clubs could still hold virtual classes and sessions to generate some revenue.

ClubRight & Zoom Integration

Overpromise and underdeliver.

Finally, gym startups that overpromise and underdeliver encounter problems from the get-go because of disappointment. Your overestimated, inaccurate forecasting will disappoint you and your investors when your takings are significantly lower than you projected. Promising a groundbreaking member experience and failing to meet high customer expectations (that you’ve set for them) means they’re more likely to cancel their membership and go elsewhere.

It’s always better to underpromise and overdeliver, but remember to sell yourself and manage expectations. Most importantly, your customers will value honesty and transparency over poor communication and unsatisfactory service. If you know there’s a barrier that will prevent you from delivering your usual service level, don’t be afraid to communicate that with your members. They’ll appreciate being kept in the loop.

To conclude, gym startups fail because of the owner(s) lack of know-how and lack of planning. Always have contingency plans in place for when things go wrong and most of all, be prepared to move through the ups and downs of owning a business in the fitness industry. It’s challenging, but it’ll be a highly rewarding experience!

ClubRight is proud to be the go-to club management software for new startups in the fitness industry. Our founder and CEO, Wayne Heath, is no stranger to the highs and lows of opening a gym and founded ClubRight intending to create software that allows new fitness businesses to thrive from day one. Learn more about what ClubRight can do for your new venture by giving us a call on +44 (0)203 884 9777 or book a free online demo to see the software in action.

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