It is not hard to earn a six-figure salary being a gym owner, you just need to plan out your strategies wisely and budget accordingly. The simple rule is that you can pay yourself when you are making a profit from your business and that is only possible when your expenses don’t exceed your revenues.
Your gym's revenue is determined by many factors and that means your salary as the owner will not be fixed. It is dependent on the location of your gym, hours worked, monthly expenses, and reinvestment. The more members your gym has the more profit you will have. Read more on how you can increase and retain gym memberships in our previous blog.
Location of your gym
The major factor that determines how much you will make as a gym owner is where you are located. Let’s suppose you are located in a high-income area, you might easily profit in that area. High-income areas mean that the facility will most probably be in a location that has high visibility and a greater footfall according to the target audience. But if your gym is in a low-income or ghetto area there is a probability that you would have to struggle.
Besides the location, your management style will also affects your salary. Member retention is directly impacted by the owner's management style. Happy and satisfied customers will mean a greater profit as they will refer their friends and family to your gym as well. But if you can’t effectively manage your gym then it might be a struggle to maintain your reputation and this can become a cause for your business's downfall.
Hours spent working
The salary of a gym owner also depends on the hours he is working at the gym and the staffing costs. On average, the time spent by owners working at their gym is about 40 hours per week. How much time the owner spends at their gym greatly affects the income he makes. Working more hours can reduce your staffing costs which will lead your income to increase. You need to manage your roles as both the gym owner and a trainer for reducing staffing costs.
The only drawback to this approach is that you might burn yourself out if you try and do almost everything around your gym yourself. You won’t find the time to plan and grow your gym if you keep giving coaching classes and managing the gym simultaneously. You need to find the perfect balance so that you can improve your gym and manage it as well without having to stress out your body.
The monthly expenses of a gym owner in the United States can vary from $8,000 to $10,000 per month without adding the salaries of their employees. You need to pay the utilities, insurance fees, marketing and advertising fees, and miscellaneous expenses. These are the recurring costs you would need to pay every month.
If we add the salaries of the gym trainers and staff working, for about 8 trainers and 5 staff members, it would cost around $20,000 per month. So you can expect to pay anywhere from $28,000 to $30,000 for your total monthly expenses as a gym owner.
Investing in your business
There are two types of investments that matter in your business. First are investments done in good quality fitness equipment and second in a good location with an attractive interior and exterior design.
Other than new investments, reinvesting back in your business is also very important. Reinvesting allows your business to grow, which leads to larger revenues and profits as there will be more members.
Let’s suppose you are earning $150,000 after taxes, this amount is your salary but if you are not reinvesting any percentage of this amount you probably will not increase your earnings. On the other hand, you might even see a decrease in your earnings with time. Even if you invest 20% of your profit you can spend that amount on various activities for improving your gym. Read more about how you can enhance your existing gym facility to boost your revenue in our previous blog.
You can reinvest back into your gym in two ways, one is through regularly maintaining your gym and the other is by purchasing gym equipment is more durable and safer. Maintaining your gym keeps your equipment and facility clean and lowers member churn. This maintenance cost also has an effect on the salary you will get as a gym owner. After deducting the expenses from your profit, the maintenance costs will be deducted next.
Cutting costs wisely
Investing in your business is important and on paper, the more you spend, the higher your profits. However, this might not be the case for everyone. Sometimes gym owners spend on their gym without any sort of check and balance. It is essential for gym owners to look over their monthly expenses and see if they can cut some of costs or not.
A simple example can be to monitor the hours of your gym and when it has the highest traffic versus when it has the lowest. Rather than having all of your lights and electricity-powered appliances running 24/7 you can only switch off unnecessary lights when there are fewer members at your gym. This can decrease your electricity bill by a lot.
Setting up a gym requires quite a lot of money and you need to finance your gym one way or another. You most probably will end up taking a loan from the bank that you would need to pay off. You can pay off your debt in two ways, either you can think of it as a fixed cost or you can try and pay it off as soon as you can.
If you treat it as a fixed cost you can enjoy a greater salary but it will cost you more in the long run as you would need to pay interest on the amount. While if you choose the second option, it will be cheaper as you can pay it off in a shorter time period. In case of the second option, you will have a lower salary as most of your profit will go toward repaying your debt.
So, how much does a gym owner make?
According to a report by ZipRecruiter, a Gym Owner in the USA can make anywhere from $17,000 to $187,500 per year depending on the above-mentioned factors. A good average would be $69,794 per year which makes $5,816 per month.
These figures can also vary due to the area or state in which the gym is operating in. For example, Green River, Wyoming gym owners have an annual salary of $89,577 whereas gym owners in Frankston, Texas make about $78,783 annually, which makes a difference of $10,000.
There are many factors that affect the salary you earn as a gym owner, from the location and layout to the management style. You need to be consistent, and agile and manage your finances well so that you do not put too much on your plate. To become a gym owner who has a six-figure salary you need to focus on your goals and work your way there steadily, growing your gym alongside you.