Fitness centers in the US have been growing in popularity for the last couple decades. This has led to a mature industry that is now enjoying moderate growth. Specifically, our business plan writers have found that the fitness center industry is growing at approximately 2.8% per year, based on information found at IBISWorld.
Unfortunately, just because an industry is growing does not mean all competitors are enjoying success. Quite frankly, the opposite is often true. If the industry is growing, much like the fitness center industry, then competitors are much more likely to enter the industry. This means that there will be more competitors competing for the same number of members. From this, fitness center competitors need to have a solid foundation if they wish to be successful in the industry. In other words, make sure to have a well-prepared business plan by a professional business plan writer.
When writing a business plan for a new or existing fitness center, our business plan writers have found that there are four important components that each fitness center business plan should include in their document.
1) Business Model - Make sure to identify and discuss differentiated services.
As previously stated, the fitness center industry has a multitude of competitors and there are always new competitors entering the market on a continuous basis. When faced with stiff competition, our business plan writer strongly recommends that fitness center business owners create and market differentiated services. From this, a critical component in any fitness center business plan is a section discussing differentiated services.
Differentiated services is simply defined as, based on research from our business plan writers, actions or processes that are different from the industry or other local competitors. For example, a common differentiated service for a fitness centers may include a children’s gym within a fitness center, segregated personal fitness training sections or lounges available for members to relax after working out. Regardless of the differentiated service, make sure to have it documented and well thought out.
2) Competitors – Research other fitness centers in your area.
Competition in the fitness center industry is extremely tough for a multitude of reasons. One reason is that there are numerous types of fitness centers, such as gyms, yoga classes, CrossFit and other trendy fitness center type activities. Competitors may even include local retail stores specializing in selling fitness equipment. If you really think about it, if people can work out at home, they are not going to need a gym membership. Because of the various types of competition, a competitor analysis is the second most important segment of the business plan, based on feedback from our business plan writers.
When conducting a competitor analysis for a fitness center, make sure to include specific components. The first important component of the competitor analysis for fitness center is fitness center membership prices charged by competitors. This information is easily found on the competitor’s website or even just by picking up the phone and calling. A second important component to include in your business plan is a map showing the various competitor locations. The visual aspect will allow the reader and also yourself to identify specific areas that are saturated with centers or areas that would be good to start one.
3) Pricing Strategy – Create a pricing strategy before you even start asking for funding.
The unfortunate reality in the fitness center market is that pricing is a critical factor when customers make decisions to join a fitness center. Because of the importance of a pricing strategy, our business plan writers recommend deciding on a strategy before you even start to seek out funding opportunities.
When deciding on a pricing strategy, examine your overall business concept and determine whether your services, as compared to your competitors, are more likely to entice customers. If your services and amenities far outpace competitors in the area, then a premium pricing strategy may be acceptable. With this type of strategy, profits per membership often far exceed competitors. In contrast, if your operations are streamlined and bare-bones, then a low-cost pricing strategy may be effective. Regardless of the strategy, make sure to support it with sound reasoning and include it in a will written business plan.
4) SWOT Analysis – Start your business plan with a SWOT analysis.
A final component that should be in every fitness center business plan, based on a consensus from our business plan writers, is a SWOT analysis. A SWOT analysis is when a business plan writer examines the interior and exterior of a business and succinctly describes the information found and places that information into four segments, using bullet points, which are labeled strength, weaknesses, opportunities and threats. By following this practice, business owners are able to quickly ascertain opportunities in the marketplace and then align strengths within a business to best exploit those opportunities. For full explanation of the benefits of this type of analysis, make sure to contact a professional business plan writer.
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Author: Paul Borosky, Doctoral Candidate, MBA.