I have received many emails from reader who are looking to invest in a gym. Following are some of the factors to include in your decision-making.

Supply and Demand

Having studied economics for 4 years in college, everything from property prices, stocks, businesses etc all depend on supply and demand. Whether you are opening a gym in bustling Kuala Lumpur or Nilai, it is important to gauge the demand and supply for gyms, fitness or yoga centers.

Yes demand for gyms may be high in KL but so is the supply. Same goes for niche gym setups and other forms of fitness centers, as the business owner, you need to gauge and forecast the demand and supply in your area. Ask yourself the following questions:

1. Is the surrounding community health cautious? (Influences Demand)
2. Are there other gyms or centers in the area? (Supply)
3. Are there any rumors of potential competitors moving into the area? (Affects supply)?

Location

Just like buying a property, location is everything. Study potential business lots and calculate rent, costs, overhead, traffic, flow of people in the vicinity, other crowd pulling businesses etc. The location could make or break your business.

Competition

Most of you reading this are probably entrepreneurs looking to start your first gym or fitness center. Yes you may have covered the location and business model but be aware of your competition. Ask yourself:

1. What makes your gym different from others?
2. Can you survive if another (perhaps bigger) competitor moves in next door?

Business Model

This is something you need to draw up based on how you foresee the fitness center to operate. For me I always look at:

1. How many members would I need in order to turn a profit? This will also help to determine the membership costs.
3. What is my operational (OPEX) and capital (CAPEX) expenditures? I always over budget just to be sure.
4. How much is my initial investment and when can I start to see returns? If it takes too long, it probably is not worth the risk?
5. What is the worst case scenario? And am I able to survive it? Am I ok with that scenario?
6. Am I passionate about the business or am I doing it “just” for the potential return of investment?

Why I dont run/own a gym?

Despite of what some people assume, I dont actually run, own or work at any gym or fitness centre. Never have and never will. Why not?

1. High investment: For me I feel the initial investment for quality equipment, facilities etc are too high (you probably need at least RM500,000 to start).
2. Competition: It will be very hard or near impossible to compete with bigger international gym chains as they have economy of scales that a single gym can never compete with.
3. I dont have the patience or time to spend my days at the gym. If at all, I would hire someone else to run it but what would be the point of starting one in the first place.
4. Complacency. Ah yes, this is a problem I have. I am pretty happy with my current life and work. Hence don’t see the need to open my own gym.