The Economics of Opening a CrossFit Gym

by Greg DePersio

2 min read

It may have been written off as a fad when it first hit the scene, but CrossFit has proven it is here to stay. The number of people who follow the exercise program increases each year. CrossFit gyms exist in six continents. The annual CrossFit Open, an online challenge in which athletes complete workouts and rank their results against the rest of the world, is expected to have over 250,000 participants in 2017. For an ambitious entrepreneur, there is money to be made in CrossFit.

Securing a Location

With a CrossFit gym, you don’t need a fancy location. Many successful CrossFit gyms have started in warehouses or garages and then worked their way into bigger spaces as their membership rolls increased. Rarely do CrossFit gyms feature the fancy trappings regular gyms install to entice new customers – saunas, steam rooms, televisions, and so forth. Most don’t even have mirrors on the walls. Air conditioning, particularly in Canada, is an even bigger rarity. Exact figures depend on location, but it’s possible to secure a starter space for a CrossFit gym for less than $1,500 per month. This amount probably gets you warehouse or industrial space, but most CrossFit members don’t care for frills, just a good workout. Plan to budget for more if you want a storefront in a location with higher visibility.

Purchasing Equipment

A CrossFit gym’s overhead is much less than that of a traditional gym. You don’t need fancy cardio equipment with heart rate monitors. You need barbells and plates, a rig for performing pullups and gymnastics movements, kettle bells, medicine balls, plyometric boxes, and protective flooring so members can drop weights from overhead. As little as $5,000 can set you up with a nice stock of equipment to get started. Once your doors are open, try to budget $1,000 per month for repairing and replacing equipment; using business expense software can help with your budgeting.

Operating Expenses

Operating costs of running a CrossFit gym include salaries, utilities, liability insurance, and marketing costs. Most CrossFit coaches earn between $15 and $25 per hour. You can also hire additional staff, such as a front desk receptionist. Utility costs vary based on location and gym size, but try to budget at least several hundred dollars per month. Liability insurance is a must, as CrossFit features high-intensity weightlifting and gymnastics movements that inevitably lead to injury from time to time. Several insurers in Canada offer specific policies for gym owners.

Revenue from Membership Sales

The typical monthly membership cost at a CrossFit gym is $150. If you can maintain roughly 200 members – you’ll gain some and lose some from month to month – that’s $30,000 in monthly revenue. Unless you’re vastly overspending on overhead, you should easily be profitable at that revenue level. A good goal is to reach 100 members by the end of your first year in business and 200 members by the end of your second. A CrossFit gym isn’t a guaranteed ticket to financial freedom, but if you run it properly, it represents a fantastic opportunity to capitalize on a fitness trend that is growing in popularity.

References & Resources

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