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What Is The Average Gym Owner Salary In The USA?

By Tracey Heinz

What is the Average Gym Owner Salary in the USA?

Gym ownership doesn’t normally come with a fixed salary. Your earnings are dependent on your profit, how many hours you’re willing to put in to keep staffing costs down and how much cash you want to reinvest in your business. The good news is, if you run a profitable gym, your salary is really up to you.

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But first, let’s have a look at the three key factors that will influence your ability to pay yourself a good salary.

1.   Profit

Put simply, you can only pay yourself a salary if you’re making a profit. And you will only make a profit once revenues exceed expenses. In the world of gym ownership, there are three surefire ways to boost profit:

  •      Introduce new revenue streams - Offer new classes, start selling products on-site, introduce premium memberships for existing members. The downside of this is that you’ll have to invest before you see the profit.
  •      Increase membership revenues - If membership at your gym is $1,000 per year, you only need 100 members to turn over $100,000 in annual revenue. But adding just one new member every week puts annual revenues at $152,000. Adding two new members per week puts it at $204,000.

You could increase revenues another way...put membership prices up. Even a 5% increase in membership prices would mean that you’re turning over an extra $10,400. But you’re likely to upset your existing customers doing this. If you can’t find any new members, far better to keep the ones you do have.

  •      Reduce costs - Let’s assume - using the profit and turnover examples above - that your staffing costs are $70,000 per year and other costs of running your gym add up to $25,000, that leaves you with $109,000 before corporate taxes of approximately 40%. So after tax, you can expect to be left with $65,400. But if you cut your running costs by 50%, your salary looks more like $73,000.

So how can I cut costs?

  •      Work more hours - This will reduce staffing costs. But there’s a drawback to this approach which we’ll cover later.
  •      Reduce fixed overheads - Let’s look at the cost savings you can make for free. Switch insurance provider if you find a cheaper deal, change the settings on the air conditioning so it’s less expensive to run, switch to a different security contractor. There are plenty of ways you can make small changes that add up to quite significant savings.

2. Debt

All of the above figures assume you have no business debts that you need to pay back. However, it’s quite possible that setting up your gym cost you quite a lot of money and unless you came into this venture cash rich, there’s a good chance you have some levels of debt.

In a previous article, we explored the example of William Hurst, owner of Spark CrossFit in East Phoenix, Arizona. It cost William $100,000 to get his gym up and running. That’s the equivalent of 100 members at $1,000 a year.

There are two ways to deal with debt. You can treat it like a fixed overhead that will eventually go away, or you can plough all of your resources into clearing it as soon as possible.

The first approach will cost you more in the long run, but means you’ll be able to take a larger salary while you do it. The second approach will be cheaper in the long run as you’ll pay less interest, but your profits will also be lower as you’ll be directing a larger portion of revenue towards debt.

3. Reinvestment

Here’s where’s your business planning skills come in. Let’s assume you’re on track to turn an annual profit after tax of $150,000. Potentially, that could mean you’ve got a salary $150,000 if you take it all out of the business to pay yourself.

But you’ll have no capital left to invest in things like marketing, advertising, staffing, repairs and maintenance. This means you won’t be getting many new customers, your equipment will start to fail, meaning the customers you do have will probably join other gyms with better equipment.

Reinvesting profits into your business means you can help it grow, leading to higher profits in the future. There’s also the added tax benefit of investing into your business. Those investments become costs and they’re tax deductible.

Even if you reinvest 25% of your profits into the business, that’s $37,500 you could spend on marketing. Not to be sniffed at when you consider that a well executed email marketing campaign for your gym could get you one new member for every $6.40 you spend!

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There’s also the matter of time investment. Earlier on we talked about working more hours to reduce staffing costs. Mathematically that’s a smart thing to do. But if you’re spending all of your time giving classes and managing the gym, how are you going to find time to put grow your business, even if you have the revenue to fund your expansion?

So what is the average gym owner salary?

The answer is, there is no average.

But let’s look at an achievable example. William Albritton owns CrossFit Alexandria in Louisiana, which has three locations. He told Web Marketing Today that his annual income was around $500,000, which equates to $166,000 per location.

So using this example and the calculations above, we can assume someone owning one gym could feasibly earn $166,000 a year.

William Hurst, who owns Spark CrossFit and set his gym up for $100,000, said in an interview with Quora that he earned $120,000 in his most recent year of trading.

So let’s take an average of the two Williams to see what sort of salary is achievable for an owner of one gym - $143,000.

When you factor in that these are both relatively new gyms with growing membership rates, you should be expecting to earn more as your business grows, providing you keep costs in check. And don’t forget about economies of scale boosting your profit margins as you expand, should you decide to.

The fitness industry is growing rapidly. It was worth £3.1 billion in 2016  and 70 cents in every dollar came from memberships. If you can boost your memberships, invest some of your profits wisely and keep on top of costs, you can expect to earn a healthy salary from owning your own gym.

Learn more by downloading our Gym Owners Salary Report below. 

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Gym Owner Salary Report

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Gym Owner Salary Report