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Economic Times

How to start a gym business and make it succeed: Here's a 6-step guide

Getty Images Visit every gym in your target area. Check the facilities they offer, how much they charge, and what their weak points are. Fifteen years ago, when Saif Malik joined Anytime Fitness as general manager, he had no designated seat and zero access to the owner. 'I saw how things worked and, more importantly, how they didn't,' says Malik, who had grown up observing his older brother run a gym. Since then, he had dreamt of owning one himself. 'I knew the gaps that needed to be plugged: poor amenities, angry members walking out, staff with no voice,' he says. So, when he opened his own gym, Component Fitness, in 2021, he set out to fix these drawbacks. The gym was launched along with a friend with an investment of Rs.1 crore. The biggest expenses were for the equipment and rent, which comprised Rs 7 lakh annually and accounted for 60% of the total capital. Another 30% went into space design, and the remaining 10% on marketing and advertising. 'We didn't cut corners on quality,' he says. Within a year, Malik had expanded the gym from 3,000 to 7,000 sq ft to accommodate the surge in footfall. The reason for this rapid growth, he says, was his 'consumer -first approach'. He offered premium amenities at affordable prices and supported members through personal challenges, waiving fees for accident victims and pregnant women. Empathy guided his decisions. After the Pahalgam attack, he extended free memberships to all army families. Malik tried various marketing channels—pamphlets, newspaper ads, billboards and online campaigns. At the outset, he spent Rs.20,000-25,000 a month on Instagram, which proved very effective. His priority was brand awareness over profits. 'I was okay about breaking even as long as people knew about us,' he gym now offers three-, six-, and 12-month plans priced at Rs.10,000, Rs.15,000, and Rs.24,000, respectively. The monthly revenue ranges from Rs.20-25 lakh, with profits of Rs.10-12 lakh. Challenges on the floor Malik faced teething troubles. 'The biggest challenge for gym owners is underinvesting in amenities due to tight budgets,' he says. Most people also overlook the opportunity cost. 'If you could earn Rs.20, but settle for Rs.10 by selling at Rs.12, that's not profit; it's an unseen Rs.8 loss,' he explains. His industry experience helped him avoid such the right location was also a challenge. 'If your rent is too high or you open a premium gym in a low-income area, you're setting yourself up for failure,' he says. Success depends on research, knowing the local demographic, and pricing to match purchasing power. Business at a glance Talent management Malik discovered that the largest operational expense wasn't marketing, but salaries. With a team of over 30, people management has been both fulfilling and demanding. 'Finding well-educated, professional trainers remains a challenge, and lack of formal education often reflects in their conduct,' he notes. To address this, Malik places a strong emphasis on training his staff in etiquette and professionalism, particularly to ensure a safe and welcoming environment for keep his team engaged and motivated, his company offers generous appraisals, subsidised meals, and regular team outings Malik has also implemented an Annual Maintenance Contract (AMC) to ensure the gym's equipment is well-maintained. One of the ongoing challenges for him is the demanding nature of work. He cautions against viewing the gym business as a passive income stream. 'This isn't a side hustle. You have to give it your all,' he says. In the early days, Malik clocked up to 20 hours a day; even now, he puts in 14-15 hours daily. Looking ahead, he is focused on scaling the business through franchise partnerships. His model is straightforward: 50:50 investment, with the brand contributing half the capital. 'It ensures that the partner knows we have skin in the game,' he explains. How to start a gym business STEP 1 Do your researchVisit every gym in your target area. Check the facilities they offer, how much they charge, and what their weak points are. Your goal should be to offer better services at the same or slightly higher price. That's how you create value. STEP 2 Understand your audience Don't assume what customers want; observe and ask. Is your target area price-sensitive or driven by quality? Avoid launching a premium facility in a low-income neighbourhood or a basic gym in an upscale area. Your offering must align with the local needs. STEP 3 Invest in marketing early Getting people through the door is the hardest part. Use Instagram, flyers, newspaper ads, and word of mouth to create brand awareness. Even if your initial revenue just covers your marketing spend, it's worth it. Conversion happens once people visit. STEP 4 Maintain your equipment This is where many gym owners go wrong. Invest in annual maintenance contracts and fix broken machines. Poorly maintained equipment leads to cancellations and bad reviews. Customers expect reliability. STEP 5 Hire a well-trained team Your trainers represent your brand. Look beyond certifications, check how they talk, behave, and treat people. Most trainers need to be trained in professionalism. Make sure female clients feel safe at all times. STEP 6 Service over profit Focus on building good reputation, not just revenue. Give discounts and help out members going through personal challenges. Such details go a long way and profits will automatically follow. DRIVEN BUILDERSaif Malik, owner of Component Fitness N.R. 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